I’ve seen a considerable amount of people suggest that buying an index and then buying a individual component of that index, to be redundant. I disagree with this.
Example:
I buy the S&P and I also buy Apple. I have too different reasons for buying each. I want the diversification of the S&P (within sectors) and capture the general American economy. I buy Apple to have exposure to a great company with a good brand . Individually Apple is not one of my top 5 largest stocks in my portfolio precisely because I have extra exposure from the index.
I understand Apple is the largest component of the S&P. Why do you think that is? It has steadily out performed many other components of the S&P. To have extra exposure to Apple comes with greater risk but potentially greater reward.
What do y’all think?
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