Investing in Individual Shares Vs. an Index

Is it better to invest in individual shares (a big stock on the SMI, for example) or in products which track an index (like ETFs)?

Hi there,

Index-based investments are often a better choice over the long term because risk is spread over a broader base than that of individual shares. Many investors find it easier to make rational and non-emotional decisions when investing through index-based vehicles.

Individual shares can outperform indexes over the short term. However, they are also more likely to experience radical price fluctuations.

If you are convinced that a specific company is a good investment, then there is no reason not to invest in their shares. Just make sure you understand that the fate of your investment as a shareholder is directly linked to that of the company.

if you have high risk tolerance and risk capacity, then investing in individual stocks can potentially be profitable. If you are looking for long-term, low-risk investments, index-based products are often a better choice.

Best regards from Moneyguru

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