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Today, we're comparing SPIDRs to sector stocks. 

This week we are taking a look at some more of our friend's portfolio:

Stock	Pros	Cons	Good/Bad
GLD (a gold ETF)	It is shiny and people like it. This makes it a good hedge for our portfolio.	A $500 buy of gold is a large amount for a hedge, given our small size.	Ultimately, it would be around 15% of our portfolio right now. This may be something to consider in the future when it would be a much smaller portion of our portfolio. Additionally, there may be too many people using gold as a hedge. “I remember when gold used to be hip, now it’s like going to Starbucks.”
FTR (a telecommunications company)	Obscenely high dividend (>9%).	We already have a lot of telecom.	Since we already own ATT for its dividend, this might be redundant in our portfolio.
GSK (Big Pharma)	GSK is healthcare, which we don’t own a lot of. High dividend.	This is not doing as well as XLV, the healthcare SPDR ETF.	This would require more research to see what they’re up to.
GILD (Biotech)	They seem to be on the upswing. It is more healthcare, which we need.	Jim Kramer ranked it as a buy—screw that guy. Not doing as well as its corresponding SPIDR.  It may be too high up at this point.	Research is needed to see if the uptick in prices is justified or just hype.

We kept coming back to the idea that most of these stocks is underperforming compared to their respective sector ETF. GILD is the exception. That is the point of investing in specific stocks, however namely that you are hoping to pick something that will perform better than something else. Since ETFs hedge, you lose out on growth for the benefit of having a safer investment. The big gamble with stocks is believing you can actually predict the future better than everyone else.