Diversification is good, but you probably don't need 100s of stocks.

I can’t say I’ve tried this but the thought just came to me that generating such trades would be trivial to do monthly now.

What is the problem? If you buys a SP500 ETF you're effectively buying 500 stocks. You don't need that much, but if that is your wish it is still better than using ETFs.

Direct indexing is a thing.

It is very true what they said. In an ETF you get both bad stocks and good. You have no choice. If you diversify manually you can pick and choose only the crème de la creme But… people love to be lazy or just aren’t knowledgeable enough to pick their stocks themselves and thus it is safer for them to just stick to broad strokes of an index fund. For starters as basic portfolio, you could 1:1 an index fund but take out all the garbage from it and keep only the strong, bright future companies.

ETF are just noob introduction to the stock market and great one at that but to maximize returns you want to be more specific and intentional about your picks.

Where etfs are great even after you learn a lot, is exposure to whole sectors of the industry. That’s how I treat them: one - etf - an index of how a particular industry fares.

Source: I basically live solely from investments at 30