6 ms·
where did you pull that from?
by maaku 11y ago
where did you pull that from?
- paganel 11y agoAs far as I've read "index tracking" is seen as this wonderful thing that cannot go wrong. Until it does. It's another way of saying "this time is different". The last part of my comment is related to the fact that "index tracking" and all the related "investment strategies" rely on the assumption that, over all, things will only go up, i.e. ROI will always be positive. I questioned that assumption. We cannot guarantee that in 30 years' time (let's say) we will still be able to return 3-5% on our huge piles of pension funds' money, no matter the strategy. What I'm saying is that we should be prepared for a stagnating or even deflationary world, financially and economically speaking
- kspaans 11y agoIt's almost entirely about paying less in fund fees and aiming to be 'average'. I.E. get the return of the market rather than trying to beat it. Think of it as 'passive' investing rather than index investing. EDIT: But yes, we don't know whether one can assume "The S&P500 will average 10% per year for EVARRRRR!!!1".
- gburt 11y agoI'm not the OP or the grandparent post, but I wonder what happens if a significant portion of the market starts indexing? My gut is that there are strong incentives against that: as more people start indexing, the gains from not indexing become more diverse.
- debacle 11y agoOn the same token, more indexing will insulate losses by creating an implicit demand based on market cap.
- mcguire 11y agoYou realize that the scenario you describe is equivalent to "the entire collapse of global civilization that will make previous dark ages look like candy and unicorns." I'm serious. If the overall economy is "stagnating or even deflationary" for any significant period of time, all of the wheels are going to come off. (Really want a dark thought? You realize that we've dug up and used all of the easily-available oil, right? When Some Later Generation Gets Its Act Together, they aren't going to have a convenient, cheap source of energy.)
- JoeAltmaier 11y agoInformation can no longer die - CDs, DVDs, libraries - a new dark age will be mercifully short. And as for cheap energy - there are plenty more, better sources than oil.
- angersock 11y agoDigitized data is replacing physical storage, and that makes it ephemeral. How would you read a DVD without a player? Can you rebuild the player, without specs? Can you rebuild the filesystem, or the decoding? There is plenty of cheap energy that isn't oil--unfortunately, the exploitation of it without oil reserves to bootstrap with may prove impossible. That's the point being made here.
- Dylan16807 11y agoWith a microscope and a few pages of spec I think you can read text off a DVD. But yes that's not a disaster-friendly method.
- supster 11y agoLike @kspaans says it's more about buying a representation of the market i.e. passive investing. Though, in the case of the S&P500, 500 large cap US stocks is hardly buying the market, so a keen investor would try to create a truly diversified portfolio including domestic, international, equities, bonds, real estate, commodities, etc.