Stock Picking Versus Indexing

This is a debate that has been going on since the invention of index funds and is likely to remain unresolved. An article in last weekend’s Wall Street Journal suggested that this is no stock pickers market. Perhaps, perhaps not. There is probably no right answer and, even if a strong argument can be made for one strategy or the other based on current market conditions, things change.

At Sigma, we provide investors with a choice. We offer a managed portfolio of common stocks across a broad range of industries and we also offer a portfolio based on a selection of broadly traded ETFs. Both portfolios include an indexed approach to selected markets, such as international, where it is difficult to attain a desirable level of diversification through individual stock investments.

Either approach makes sense. The real issue is maintaining an account appropriate balance between fixed income and equities. Like the argument between boxers and briefs, it’s not which but whether.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA