Recently, i replied to a reader who asked me if i hold so many counters, might as well i go buy index? At one glance and perhaps to a lot of people, it might make sense. However, in reality, its not quite the same. In index, we only get dividend 2x a year. this makes compounding a lot (and i say it again) a lot slower. The bigger difference and actually dangerous difference is when one takes out a fixed amount say 4% from this portfolio. In bull times, it can be done without much fear as there's a lot to take out anyway and we are only removing 4%. However, in cases of bear, and here were are talking about prolonged bear of perhaps 10year or longer, market drops, and we are still liquidating 4% pa. As we go into the bear years, with inflation doing its job, now ......