And remember too, that B&H, while a diversified company, is still a company. They own a lot of assets, but that doesn't make THEM a diversified INVESTMENT.
There are many ways to look at investing. You can look at "Sectors" such as technology, energy, healthcare, retail, etc. You can invest in the sector and make money even with competing companies. E.g. owning BOTH Coke and Pepsi; or Ford and GM. On the other hand, some people invest in a Sector and try to play BOTH sides of a technology. This will reduce your risk, but also your profit potential. E.g. Investing in both fossil fuels and green energy at the same time. That's like playing Roulette and putting $10 on Red and $10 on Black. You can play indefinitely, but you're not going to gain anything.
That's where actively managed mutual funds make their mark. They are diverse enough where winners out pace losers and you'll profit. But they also watch those losers and sell/buy based on the market and forecasts. Hopefully with the result of INCREASING the winners and reducing the losers. But if not, there will still be more winners than losers. Matter of fact; if held for 10 years or more, NO MUTUAL FUND has ever lost money.
Buying individual stocks; or even in a company that has multiple holdings; has a greater potential for loss. Yes, it also has a greater potential for gain, but you have to be very active with your management. And if you buy something like BRK and don't touch it often, the costs are indeed low. But if you trade it a lot, those costs will surpass the fees on a mutual fund. Especially considering that most mutual funds also deal in holdings that pay dividends and such.
So, i know that Badfinger has mentioned a number of times that he prefers investing in individual stocks over a mutual fund. All I'm saying is you can't make a blanket statement that one is better than another. For instance, in the last 5 years, BRK had returns of:
2012 2013 2014 2015 2016 YTD
BRK.B 17.56 32.17 26.64 (-12.06) 23.43 1.41
The Vanguard S&P500 fund as well as similar, had similar returns. The highs may not have when exactly as high, but the low (2015) wasn't nearly as low as BRK. (1.25% vs -12.06).
Bottom line: Mutual funds, won't experience the volatility of the market like stocks will. Including a company with numerous holdings. But in return for some higher safety, there will be some less profits.
And don't get me wrong. I invest in a very large variety of things. Some things I don't even call investments. Such as Silver and Gold. I only have physical silver and gold. And while it doesn't pay dividends, it preserves wealth extremely well. E.g. in 1964 the median average house cost approximately $19,000 or the equivalent in Silver of 15,000 ounces. Let's say 2 people; one had $19,000 in cash and the other had 15,000 ounces of silver, and BOTH were going to go buy a new house. They get in a car accident and are in a coma for 50 years. They wake up OK and said.... "What was I doing?" Oh yea, I was on my way to buy a house. Could the guy with $19,000 in cash buy a house today? No way. But the guy with the 15,000 ounces of silver could, because today, it's the same as $266,000.
The point is; everything is relative. You need to be truly diversified in your HOLDINGS. (Holdings include investments, real estate, cash, belongings, etc. ) FWIW: I consider silver and gold CASH. It's just a DIFFERENT CURRENCY. No different than the dollar, yen, euro, etc. Except, it's been around as a currency for about 6,000 YEARS. Anyway; even your investments need to be diversified. It's up to the individual to determine their balance and risk level. You CAN BE OVER DIVERSIFIED. Back to betting BOTH RED and BLACK on a Roulette table. Or no risk and having ALL CASH in your home safe. No interest and it loses value every year because of inflation.
My suggestion for the new officers: Look at my original post in this thread. I list the 4 types of savings you need.
#1 should be CASH. I recommend half dollars and half silver
#2 is your checking/savings account to pay all your bills and spending money
#3 should be in money markets, CD's, savings bonds, silver/gold, etc. Money you don't need tomorrow, but you don't want to tie up for 30-40 years like an IRA.
#4 Should be diversified around TSP/401K/IRA/529/etc. Diversified with mainly equities; both mutual funds and stock funds; some bond funds; etc.
You will find, that as time goes on and you have less expenditures and some of these 4 savings group outgrow themselves, you can move stuff around. E.g. #1 is an emergency fund. 3-6 months of income. But if your house is paid off and you don't have a lot of expenses, you may only need 2-3 months of emergency funds. You can move some into #3. Or, if you're taking in a lot more than you're spending, and #2 (Bank account) is getting too big, you can increase the amount going into #4. If you realize what EACH of those 4 savings are for, and realize how flexible or firm each can be, then it becomes very easy to diversify around those.
Have to disagree with your statement about trading fees surpassing mutual fund fees.
If you invest $25k in a MF that has a 0.4% annual fee, you will be paying $100 a year in fees. Fidelity only charges $4.95 per stock trade. You could make 20 trades a year and still not be to the fees of a MF. But it would be highly unlikely to make 20 trades if you only had an account balance of $25k. Now say your MF account balance is $500k, that would be 400 trades a year. Unless you are the absolute definition of a day trader, no way would you come close to incurring the same fees that MF companies charge. And that would hold true even if MF fees are only 0.2%. Obviously I am a person who prefers holding individual stocks (you would be shocked at what I do).
No doubt you are a conservative investor. Curious why you prefer silver over gold. Gold is so much easier to store (I can easily hold a pound in my hand..and you can buy coins less than one ounce). Your car crash example is all about timing...silver was over $100 an ounce in 1980. Today it is under $20 per ounce.
Bottom line, pay yourself first (save) and live within your means, and you will be ok.