I often see people dishing out investment ‘advice’ on here telling people just to put their savings into a S&P 500 ETF and leave it there.
I understand that if you can sit on the investment for long enough you can generally overcome any downturns and it probably is a good idea if you don’t need the money and are strong enough not to wimp out at the slightest hint of a drop.
However, this has got me thinking. Why use an investment manager at all if you can just open an execution only account? What’s the benefit in having a manager invest your money for you for 10+ years when the performance is lessened by their fees? How do managers sell themselves to customers who have a long enough investment horizon? Do managers just rely on people wanting the perceived security of someone else doing the investing for them? Very few managers outperform these ETFs long term and then some is taken by fees.