It can be hard to pick winners and really easy to pick losers. By buying the entire market, you're not trying to pick individual stocks—you're essentially betting that the overall economy will perform better in the future than it does today. This has historically been a very strong bet.
In fact, over the time periods we've been tracking, it's uncommon for any actively managed fund to outperform the S&P 500 for multiple years in a row.
By buying the entire market, you get exposure across all industries that make up our economy—whether that's home builders, energy companies, or tech giants like Microsoft and Meta. This ensures you're exposed to the whole economy, not just specific sectors that can experience short-term or long-term performance swings.
Diversification protects you from putting all your eggs in one basket while still capturing the overall growth of the American economy.