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The $SNAP price isn't being driven by index funds. Index funds also aren't about blindly investing ("we don't really care what...") - it's about delegating that

The $SNAP price isn't being driven by index funds. Index funds also aren't about blindly investing ("we don't really care what...") - it's about delegating that trust. For example, SPY is delegating that to a trusted entity (you're trusting that the S&P 500 will remain a meaningful measure of the US stock market).

darkerside 10y ago
"Delegating to a trusted entity" isn't different from "blindly investing"/"buy at any price". jmharvey's point stands.
- chimeracoder 10y ago
  > "Delegating to a trusted entity" isn't different from "blindly investing"/"buy at any price". Those are incredibly different things. If I put $5000 in SPY, even if the S&P 500 index contains $FOO today I'm not telling my brokerage firm to "buy and hold $FOO at any price", because that's not how the SPY index works, and it's also not how index fund investing works a strategy either. In addition, most indices are based on fundamentals like market cap, earnings, and price - either directly or indirectly. Putting money in an index fund is delegating the work of that research to a trusted entity, in exchange for a fee (which is usually bundled into the trading prices). Actual "blind investing" or "buy at any price" would be someone who trades on individual stocks without doing any systematic research, either directly or through a delegate.
  - darkerside 10y ago
    > If I put $5000 in SPY, even if the S&P 500 index contains $FOO today I'm not telling my brokerage firm to "buy and hold $FOO at any price", because that's not how the SPY index works, and it's also not how index fund investing works a strategy either. Unless you can educate me as to what you mean here, I understand that this is exactly what is happening. As long as $FOO remains in the S&P 500, buying and holding SPY is financially (roughly) equivalent to buying and holding equity in $FOO in proportion.

darkerside 10y ago

"Delegating to a trusted entity" isn't different from "blindly investing"/"buy at any price". jmharvey's point stands.

chimeracoder 10y ago
> "Delegating to a trusted entity" isn't different from "blindly investing"/"buy at any price". Those are incredibly different things. If I put $5000 in SPY, even if the S&P 500 index contains $FOO today I'm not telling my brokerage firm to "buy and hold $FOO at any price", because that's not how the SPY index works, and it's also not how index fund investing works a strategy either. In addition, most indices are based on fundamentals like market cap, earnings, and price - either directly or indirectly. Putting money in an index fund is delegating the work of that research to a trusted entity, in exchange for a fee (which is usually bundled into the trading prices). Actual "blind investing" or "buy at any price" would be someone who trades on individual stocks without doing any systematic research, either directly or through a delegate.
- darkerside 10y ago
  > If I put $5000 in SPY, even if the S&P 500 index contains $FOO today I'm not telling my brokerage firm to "buy and hold $FOO at any price", because that's not how the SPY index works, and it's also not how index fund investing works a strategy either. Unless you can educate me as to what you mean here, I understand that this is exactly what is happening. As long as $FOO remains in the S&P 500, buying and holding SPY is financially (roughly) equivalent to buying and holding equity in $FOO in proportion.