VTI: A Diversification, Perhaps

Index funds, in their apparent simplicity, offer a temporary respite from this relentless scrutiny. The exchange-traded fund, or ETF, a construct that allows for the fluid transfer of ownership, presents itself as a solution. To invest in a fund tracking the S&P 500, for example, is to become a fractional owner of 500 of the most prominent American corporations. A comforting thought, perhaps, until one considers the arbitrary nature of such an index, its reliance on a selection process dictated by committees and algorithms. The reported average annual gains of nearly 10% over decades are, of course, historical data, and offer no guarantee of future performance. The past, as everyone knows, is a foreign country, and its inhabitants rarely offer useful advice.







