Derf, Yes, zero commissions make it easy to build your own custom ETF. I figure there are so many great stocks, why limit it to a handful or a few dozen. Some brokerages also have fractional shares with no commission, which comes in handy for buying high priced stocks like AZO, AVGO, etc.
Before the days of zero commissions, there was a site where you could create your own quasi ETFs and buy the entire thing for a single commission. Other investors could also buy your ETF if they liked it, and pay you a modest fee. I built a bunch of custom ETFs over there for several years, but once zero commissions took off, you could do the same thing for no cost at all. So now it's 'hog heaven' for us stock collectors. lol.
In addition to the diversification, part of the rationale for so many positions is that it's just too cumbersome to sell, so you are forced to 'stay the course' and hold long term. With the longer term mentality reinforced, the tendency then is to gravitate toward solid long term stocks, and these are relatively easy to identify based on their 10-15 year charts. So this gets around some basic investing problems - 1) staying the course, 2) having a short term mindset, 3) drifting into crappy stocks, 4) having to accurately micro-analyze individual stocks. None of us are a Buffett or Peter Lynch, but in my system you don't need to be.
The other side of this system is the large S+P 500 allocation. I figure this should be at least as large as the individual stock portion, and if another 2008 debacle or Covid crash is looming, you can quickly exit the S+P 500. Then with this safely in cash, you have reduced your market exposure by half, and also have the ability to hedge the remaining individual stock exposure, up to 100%, by buying an inverse ETF like SH. I've never done it, but the option is available. Anyway, that's the basic system I came up with. But everyone is different, so whatever works :o)
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