Why would an investor pick one stock, when he or she could instead pick 75 in an exchange traded fund (ETF)? Beats us.
Sector investing has become the norm with the advent of the mutual fund and ETFs.
While some stocks might outperform an ETF, you didn’t know this would be the case when you bought the stock. It can be a tough call, and ETFs take the difficulty in choosing out of the equation.
Take a look at the technology sector, for example. Who are you going to pick? How do know who the winners are and who the dogs will be?