As more and more people buy passive investing products (like ETFs), by definition those ETF will be some of the best market performers, very often better than active funds. However it creates distortion in the market, for example both S&P and Nasdaq are heavily unbalanced towards the top companies by market cap (AAPL, AMZN, MSFT, FB, etc). So there is little actual diversification if 25% of the index is made of 6 companies. During normal times of growth this is not a problem, but during gyrations times (when the market heavily shifts between asset classes), it can be a big problem. Also, if anything bad happens to few of those top companies, the index becomes very vulnerable. I'm not saying "don't buy ETFs", I'm just poiting out some hidden problem that may or may not play a role in the future.
@@mr_rip Funny how everybody else is always wrong, and you're always right. Maybe "distort" was the wrong word that triggered you, as every single trade "distort" the market. Passive investing makes an impact on the market, whether that's good or bad it's irrelevant, we're not looking for culprits here. The Grossman Stiglitz Paradox just argues that perfectly informationally efficient markets are an impossibility. It has nothing to do with the fact that the top 5 companies of the S&P500 makes 20% of the index, and a top-heavy market has been historically associated with an overpriced/risky market.
Ciao Rip, che strategia consiglieresti per uscire da mutual fund e passare a ETF? Al momento, il mio portafoglio di mutual funds è al momento in perdita e inoltre costano sopra al'1%
io leggendo l'ultimo capitolo di sapiens di harari non sono convinto nell'unlimited Market growth perchè come si dice post 2000 tutto sale per i qe ma se gli scienziati o ingegneri non soddisfano nuove scoperte eccezionali potremmo andare in periodi simil 29 in piena stagflazione. Per me ora i mercati scontano già tantissimo hype (vivere su marte, biotecnologia....) bho sarò pessimista io tu che ne pensi rip?
@@mr_rip si ma qui siamo in situazione nuova tutto sale perché stampanò soldi che finisco nel circuito finanziario ma l’economia reale stagna da anni oramai. Si fatica a soffrire in silenzio ed essere una mosca bianca
