Index Funds vs. Stock Picking

In this episode, Cody and Justin discuss one of the most heated investing arguments.

Should you hand-select the "best" companies, or invest in the total stock market?

Some topics include:

Individual stocks are often investors' first exposure to the stock market
The mental drag of stress from volatility
How individual stocks can scratch the itch
Setting non-negotiable limits
More certain path to FI vs the potential for a home run
Bad bets we've made on individual stocks

As part of this discussion, we compared several individual stocks against VTSAX.

VTSAX is an index fund Vanguard offers and tracks the total stock market.

List of stocks including present-day value and annualized return if you invested $1,000 on Aug 9, 2004, and reinvested dividends:

VTSAX

$5,807
9.19% average annual return

Intel

$1,623
2.45% average annual return
7th Market Cap

Abercrombie and Fitch

$4,679
8.02% average annual return
Couple of years after Hollister's launch

Apple

$396,562
34.85% average annual return
Released iPod Mini
If you bought on July 6, 1994 (Forrest Gump release date) -> $1.1M (26%)

Coca Cola

$6,007
9.37% average annual return
Released C2

General Electric

$1,243
1.09% average annual return
5th Market Cap

Wells Fargo

$2,627
4.95%
15th largest market cap

TI

$11,496
12.98% average annual return
Year TI-89 was released

Sony

$2,691
5.07% average annual return
PSP release date

Nokia

$730
-1.56% average annual return
9 phone releases

We cover all of this and more.

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Links from The Episode

Stoculator

YouTube Interview
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