Quote:
Originally Posted by CoachKandSportsguy
Passive investing dominates, but are there risks?
since passive investing in index fund now account for more than active funds and more than 50% of the index, the market is getting distorted, and the advantages of a market diversified portfolio is being diluted. .
most will dismiss the article, but the disadvantages are the pieces which john bogle didn't want to touch as he had no data to prove/disprove any thesis. .
I don't have any passive index funds in my retirement account, all individual stocks.. .
good luck to us
|
Thanks, Coach! That is a really good article. Indexing has become such a huge percentage of the market that their buying/selling actions move it. Very interesting about the lead dogging, too.
This post caused me to review the investments I made in my Schwab account during 2022 and 2023 when I came into significant cash to invest via sales of RE investments. Prior to that I just held the Schwab account for its ATM card which I primarily used for foreign travel. It only held a low five figure amount.
Schwab lists holdings in individual stocks separately from ETFs. What I put into individual stocks on my own hook has more than doubled. What I put into ETFs has gone up 37%. Velly, velly intelesting... OK, I did buy Nvidia at a small fraction of its price now which tipped the scales. In any case, securities prices have jumped, even leapt in the last two or three years.
The Shiller PE ratio is now 38.97. Its median is 16.05 and its mean 17.26 so it is currently extremely high by historical standards. That is why I retain enough in T bills and money market funds to pass my sleep at night test.