Done correctly, the selection of individual common stocks requires rigorous effort. Investors, however, often seek a way to shortcut this process.

Approximately 26 years ago, the advent of exchange-traded-funds (ETFs) provided a new way for investors to participate in the equity market through a basket of stocks that can be bought and sold like an individual security. This left the impression that investors could forgo the intensive process of individual stock selection, but too often, it also meant skipping the due diligence any investment selection demands.

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