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The article says that this solution has unintended consequences too, since you are now transferring voting rights from the share owner, who cares about the long
by lifeformed 8y ago
The article says that this solution has unintended consequences too, since you are now transferring voting rights from the share owner, who cares about the long term performance of the company, to share renters, who generally just care about the short term, which is counterproductive.
Although I'm not sure I get that - I don't quite see how the renter's would be especially more short sighted - it's not like the fund is obligated to hold the stocks any longer than anyone else.
- cimmanom 8y agoAlso, what percentage of index fund investors hold those shares only in the short term? I thought much of the point of index fund investing is that it's great for a relatively low-effort, reasonably-diversified buy-and-hold strategy on the part of anyone from individual investors planning for retirement to institutional investors managing pensions?
- chimeracoder 8y ago> you are now transferring voting rights from the share owner, who cares about the long term performance of the company, to share renters, who generally just care about the short term, which is counterproductive. This logic is backwards; index fund holders are more likely to hold their shares for a longer period of time, compared to day traders. The whole point of index fund investing is to avoid short holds.
- randyrand 8y agoA share owner can sell at any time. As can a renter. Not sure I see a difference.