Where's the shame in owning a fund? There's some interesting quality and/or value factor ETFs out there. Pay 15-25 basis points and let someone else do the work. It's a reasonable option.

Make sense. For the average fellow over a decent time horizon there is no need to beat the market, and little chance to do so even if you wanted to, so there is no need to put in the work to try.

Since it doesn't increase the work, I'd tend to pick a fund that isn't cap weighted.
And perhaps a tiny skew towards better firms, if you could find one that wasn't cap weighted?

My only concern:
If there are companies you would not invest in for ethical reasons, index investing is out. And most funds.

Of course it's pretty easy these days to simply do it yourself.
Find a list of tickers you like, S&P 500 or whatever.
Delete the few you won't touch. (e.g., the ticker which matches your evil step-sister's initials)
Upload the list to your broker's site, assign a list of weights, enable fractional shares if you want precision, use "one click" rebalancing if desired.
Other than the hour to figure it all out the first time, it's not appreciably harder than putting your money in an index fund.


The only pitfall with doing the "index except odious" yourself is probably the temptation to start doing individual picks that you're not qualified to make.
A very slippery slope indeed.

An equally weighted portfolio of the 200 highest ROE firms in the S&P 1500, rebalanced quarterly, beat the S&P 500 by 4.0%/year in the last 30 years after trading costs, with vastly lower single-company risk.
(actually I tested the 1500 biggest by market cap in the Value Line database, which is almost but not quite the same thing)
One step in that direction of stock selection may actually be sensible, but five steps in that direction leads to madness.

Jim