A short lecture by Ndubuisi 'Andy' Egwim arguing that individual stock picking is risky for most people and advocating investing in baskets of stocks (index funds/ETFs). He uses an English Premier League football-club analogy: betting on a single club (individual stock) is high-risk, while investing across all clubs (index funds) raises the probability of capturing winners and reduces risk.
Now what that means is that rather trying to. Rather than trying to buy one share or two shares or three or four or five. Like someone like me who has been investing for years, you can decide. I don't know which share is going to do well. So I'm going to buy a basket of shares. I say basket, but some people will call it index funds, some people will call it etf. Exchange Traded fund. How many of us are football fans here? Any Chelsea fans? United. Man United. Okay. Chelsea. Chelsea is going down. Any Liverpool fans or Baka fans? Okay. I mean there's anybody who is a fan of any club in the Premiership. Arsenal. Thank you, Roslyn. Right. Okay. I'm going to demonstrate investing through index fund with Premiership. Okay. Maybe the rest of us are cricket fans. That's fine. So. So now let's go to the Premiership is a number of clubs. You can say, I don't know who's going to win the Premiership, but I'm going to put all my money on Chelsea or my United. Anthony put all his money on my United. Now if my United wins, he's going to make a lot of money because he was right. But the chances of my United losing is also very high, even if they're a good team. So there's more risk. But what if Anthony says, I'm not going to only invest in my United, I'm going to invest in all the clubs, the premier. Now what does that do? You invest in all the clubs in the Premiership. The chances of one of those clubs winning the championship, not Premiership. The chances of one of those clubs in Premiership winning the championship is much higher than only the chance of Man United winning the championship, okay?
