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Why did students first invest in index funds, and then progress to choosing individual stocks?

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Why did students first invest in index funds, and then progress to choosing individual stocks?

0
10

The first part of the course was a broad economic discussion on stocks vs. bonds. The second part was drilling down into choosing what sectors they are interested in; the last part of the course will be the students researching specific stocks, and investing up to 10 percent of the (original 50 percent) allocation in up to 10 stocks. You want to make sure that (first) you have a good foundation and an understanding of the marketplace. You want some tension in the process. They debate in the class, and come to a consensus. They will be researching stocks in teams of two. This fund goes on past this first semester; the fall class will pick it up and evaluate what the students have done, and make any changes. I thought that it was better to slowly build the number of individual stocks. It’s a much higher hurdle to make an individual stock investment than a broad-based sector allocation. The students will have to work harder to convince me and those on the committee that their investments

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