What are the reasons why people still buy individual stocks and not invest in the S&P500 even though there has been alot of praise on it?

Hi!

People still choose stocks over ETFs because they believe that they have the potential to beat the market by stock picking. Some individuals actually have the capability of choosing the correct scrips and can also determine the correct time to enter and exit the market. This allows them to beat the market, but this is associated with a higher risk of the selection going wrong. However, it is rare for a fund a fund manager to beat the market and thus, investing in ETFs is the safer choice as they follow the market and the returns are linked to market returns.
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Other answers focus on index vs stocks but I want to touch on S&P500 vs other indicies.
Things do go in cycles and while S&P500 getting a lot of airtime recently due to record highs and 10 years of outstanding performance.

However, it wasn't always like this, a historical recap: pre subprime crisis (so 2007 and before) - US market was steady but not outstanding. At that time the hot area was the so-called BRIC economies (Brazil, Russia, India, China).

Amazing marketing aside, they did have an amazing record and were a particular subset of emerging markets which were all providing the same strong returns you see from S&P500 (US Market) in last 10 years. Since the crisis; emerging markets have been so-so; pockets of strong performance but nothing sustained.

My point is - Indexing has strong theorectical basis but then choice of index is still up for consideration. Who knows how long the latest tech boom may last; maybe can consider world wide index tracker (eg VT) for long term portfolio