Investing everything in a single ETF (especially at a single brokerage) is possibly fine, but seems difficult to justify. When something looks rock solid in theory, in practice there might be all sorts of black swans, especially over decades (where you lose at least a significant portion of the value held in a particular ETF at a particular brokerage, compared to its underlying basket of securities, because something has gone wrong with the brokerage, the ETF provider, the infrastructure that makes it impossible for anything to go wrong with an ETF, or something else you aren’t even aware of). Since there are many similar brokerages and ETF providers, I think it makes sense to diversify across several, which should only cost a bit of additional paperwork.
Even if in fact this activity is completely useless, obtaining knowledge of this fact at an actionable level of certainty (that outweighs the paperwork in the expected utility calculation) looks like a lot of work, much more than the paperwork. Experts might enjoy having to do less paperwork.
(For example, there’s theft by malware, a particular risk that would be a subjective black swan for many people, which is more likely to affect only some of the accounts held by a given person. The damage can be further reduced by segregating access between multiple devices running different systems, so that they won’t be compromised at the same time, but the risk can’t be completely eliminated. Theoretically, malware can be slipped even into security updates to benign software by hacking its developers, if they are not implausibly careful. And in 20 years this might get worse. This is merely an example of a risk reduced by diversification between brokerages that I’m aware of, the point is that there might be other risks that I have no idea about.)
Investing everything in a single ETF (especially at a single brokerage) is possibly fine, but seems difficult to justify. When something looks rock solid in theory, in practice there might be all sorts of black swans, especially over decades (where you lose at least a significant portion of the value held in a particular ETF at a particular brokerage, compared to its underlying basket of securities, because something has gone wrong with the brokerage, the ETF provider, the infrastructure that makes it impossible for anything to go wrong with an ETF, or something else you aren’t even aware of). Since there are many similar brokerages and ETF providers, I think it makes sense to diversify across several, which should only cost a bit of additional paperwork.
Even if in fact this activity is completely useless, obtaining knowledge of this fact at an actionable level of certainty (that outweighs the paperwork in the expected utility calculation) looks like a lot of work, much more than the paperwork. Experts might enjoy having to do less paperwork.
(For example, there’s theft by malware, a particular risk that would be a subjective black swan for many people, which is more likely to affect only some of the accounts held by a given person. The damage can be further reduced by segregating access between multiple devices running different systems, so that they won’t be compromised at the same time, but the risk can’t be completely eliminated. Theoretically, malware can be slipped even into security updates to benign software by hacking its developers, if they are not implausibly careful. And in 20 years this might get worse. This is merely an example of a risk reduced by diversification between brokerages that I’m aware of, the point is that there might be other risks that I have no idea about.)