McMurtry Investment Report & Model Portfolios

Buying individual stocks vs buying an equity index fund or ETF

May 6, 2024

There are many differences between purchasing individual stocks compared to equity index funds and ETFs..

In an ETF or fund, trying to time your purchase is not an easy task. You are solely at the mercy of the market at that time. Determining intrinsic value in a fund or ETF is not really possible with the lack of transparency in exactly what the fund’s actual holdings are at a point of time.

On the other hand, buying individual stocks is much easier to know exactly what the value of the company is at a point of time. Plenty of stats are available to come up with the fair value of a company. This gives the investor an opportunity to be more value conscious when investing in individual companies.

The second major difference is that in a bear market there is nowhere to hide in an equity index fund or ETF.

I reman a believer in actively managed portfolios that can control the amount of portfolio risk in a bear market by raising more cash, purchasing more short term bonds and better value stocks.


The best portfolio managers are most evident in a bear market, not in a bull market. Controlling the amount of risk is what it is all about.

Leave a comment

Your email address will not be published. Required fields are marked *