> Then why do people say "invest in the stock market for the long run by buying an index fund?"

Because the American economy has historically grown. Buying an index of Austrian stocks on the eve of WWI would have been about as effective as buying cryptocurrencies.

Considering that US is getting into debt on an accelerated schedule and runs wars all over the world non-stop since WW2, and has biggest military budget, and otherwise resembles the roman empire at its peak, do you think that musical chairs game will never end?

IOW, taking past performance as indicative of future returns.

Because of minimizing risk, and minimizing transaction fees.

If you buy 100 stocks and 10 of them go to 0 you are out 10%. However, if the other 90 stocks are up more than 15% then you have gained a little money.

But, if you buy 100 different stocks by hand then you pay 100 different transaction fees and have to keep track of them independently for tax etc.

I'm pretty sure you still need to pay taxes on the dividends even if you're reinvesting them.

Sorry, your right.

There are tax advantages, but it's more complex than simply not paying short term capital gains on dividends.

If it's an IRA, there's no tax unless withdrawing.

Because over time, stocks tend to increase in value, because you are investing in a company that is producing something of value. You have a reason to believe that stocks will increase in value over a long period of time, other than just historical information.

Because the fees are the lowest and it's been proven over and over again that the number 1 headwind against long-term equity growth is the fee structure.

Index funds require no special knowledge to build...just buy the S&P100 stocks in equal amounts and boom, so the fees for such a fund can be super low.

Amazingly only one of the three replies you got so far understood the point of your comparison.