The Stress of Individual Stock Picking: Why Passive Investing is Gaining Popularity

Reddit investors are questioning the worth of holding individual stocks due to stress and uncertainty caused by earnings, macro shocks, and hype cycles. Many are switching to passive index funds like Vanguard Total Stock Market Index Fund ETF (VTI) and Vanguard Total World Stock Index Fund ETF (VT). Despite the stress, some still believe in stock picking for fun and potential gains.

Reddit investors are increasingly questioning the value of holding individual stocks due to the stress and uncertainty brought on by earnings reports, macroeconomic shocks, and hype cycles. In response, many are turning to passive index funds like the Vanguard Total Stock Market Index Fund ETF (VTI) and the Vanguard Total World Stock Index Fund ETF (VT). Despite the stress, some investors still enjoy stock picking for potential gains and the thrill of the market.

The Vanguard Total World Stock ETF (VT) offers a compelling alternative for investors seeking diversification and low-cost exposure to global markets. Managed by The Vanguard Group, one of the largest providers of mutual funds and ETFs, the VT ETF tracks the FTSE Global All Cap Index, which covers about 98% of global investable market capitalization and includes approximately 9,800 holdings in more than 47 countries [1].

The VT ETF features a low expense ratio of 0.07%, significantly lower than the average for global funds, which is around 1% [1]. This means that investors keep more of the returns generated by the ETF. As of mid-2025, the ETF's top 10 holdings include Microsoft (MSFT), Nvidia (NVDA), Apple (AAPL), Amazon (AMZN), Meta Platforms (META), Broadcom (AVGO), Alphabet (GOOGL), Tesla (TSLA), and Berkshire Hathaway (BRK.B) [1]. These holdings provide exposure to various sectors, including technology, financials, industrials, consumer discretionary, healthcare, and more.

The VT ETF offers a dividend yield of approximately 1.89% as of mid-2024, with a payout ratio of about 37% [1]. This steady income stream can be attractive to investors seeking passive income. The fund is passively managed, aiming to match the performance of its benchmark index, the FTSE Global All Cap Index.

Investors can buy shares of the VT ETF through Vanguard or their preferred brokerage platform. The process involves opening a brokerage account, searching for the ticker symbol (VT), deciding how many shares to buy, selecting an order type, and submitting the order [1]. The VT ETF's historical performance has closely tracked the FTSE Global All Cap Index, with cumulative returns of around 16.34% over the past year and 17.03% over the past three years [1].

In conclusion, the Vanguard Total World Stock ETF offers a low-cost, passive investment option for investors seeking diversification and exposure to global markets. Despite the stress and uncertainty in the stock market, the VT ETF provides a reliable way to gain exposure to a wide range of companies and sectors. As always, investors should carefully consider their risk tolerance and investment goals before making any investment decisions.

References:
[1] https://www.fool.com/investing/how-to-invest/etfs/how-to-invest-in-vt-etf/