Passive investing is creating a problem that nobody wants to talk about. Millions of investors keep buying $VOO, $QQQM, and $VFV, putting more money into the same big companies regardless of how expensive they get. The bigger these companies become, the more weight they carry in the indexes. To me that raises the question of whether we’re investing based on value or just buying what’s already popular. Cough* AI ! Obviously these companies have real growth behind them, and I still think index funds are great investments. But I do wonder if passive investing could eventually become its own worst enemy. Are index funds making investing easier or helping create the next bubble?
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2 Comments
Nate
@hoodnate · 5m
This made me pause too. I mostly use index funds, so I wonder where the line is.
Isomad
@madiso · 1h
definitely easier, the Funds auto rebalance it for you, so you can do LIFE. Sleep Well at night.
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