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A comment on A Professor Who Was Right About Index Funds All Along. Parent comment

Re:A Professor Who Was Right About Index Funds All Along by ikeboy on Saturday October 22, 2016 @09:56AM (#12768677)
So your strategy isn't, "buy the whole market", it's "buy the market as it existed in $current-year", which misses all the new stocks that come out. (Also it assumes you have a fixed amount to invest and never want to invest more)
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Re:A Professor Who Was Right About Index Funds All Along by grondilu on Saturday October 22, 2016 @09:59AM (#12768687)
I don't get what you mean. You can buy and hold, and keep buying.
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Re:A Professor Who Was Right About Index Funds All Along by ikeboy on Saturday October 22, 2016 @10:02AM (#12768705)
But then it's not a one time-fee. More generally, your strategy only works if you're investing a large amount every time, it doesn't scale down. You can't put 10k into 5000 stocks, and even 500 stocks would be difficult.
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Re:A Professor Who Was Right About Index Funds All Along by grondilu on Saturday October 22, 2016 @10:10AM (#12768735)
> But then it's not a one time-fee.

I meant one time per line, not per portfolio.

> it doesn't scale down.

It scales down just fine if you're willing to accept that you're going to pay a lot in broker fees, with the only consolation that you'll pay them only once per line in your portfolio.

If you have say 500 stocks and pay like $10 in broker fees per stock, in the end you'll pay $5000. That's not the end of the world for a long term investment.

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Re:A Professor Who Was Right About Index Funds All Along by icebraining on Saturday October 22, 2016 @11:02AM (#12768928)
At a 0.05% expense ratio, you need to hold $250k for 40 years to pay $5000, not to mention the extra fees if you want to rebalance as the market changes. It doesn't seem to make sense for lower-end investors, which are many of us.
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Re:A Professor Who Was Right About Index Funds All Along by jonknee on Saturday October 22, 2016 @01:55PM (#12769729)
> If you have say 500 stocks and pay like $10 in broker fees per stock, in the end you'll pay $5000. That's not the end of the world for a long term investment.

If you only buy each stock one time. Which is absurd if you want a balanced portfolio you would need to buy a little bit of all 500 stocks a lot of times. A ETF lets you do this cheaply.

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