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Your comment still assumes active investors who are looking for value stocks. Index funds don't discriminate, they just buy stocks in the entire market.
by scott_s 8y ago
Your comment still assumes active investors who are looking for value stocks. Index funds don't discriminate, they just buy stocks in the entire market.
- jandrese 8y agoRight. In fact index funds should be better for management since they won't be rocking the boat so much.
- whack 8y agoIndex funds don't discriminate against stocks, but they can discriminate against directors and executives who don't deliver their desired profits and returns. Ie, by voting them out. This is already starting to happen. See: https://www.barrons.com/articles/passive-investors-are-the-new-shareholder-activists-1499491673 https://www.barrons.com/articles/passive-investors-are-the-n...
- scott_s 8y agoI mostly read about passive firms voting more on special issues like climate change or good governance. Where did they they talk about voting out directors who didn’t deliver profits? (Honest question, I mostly read the article, then came back to it and hit a paywall.)
- whack 8y ago> Michelle Edkins, BlackRock’s global head of investment stewardship. “It’s not just about climate. It comes back to the point of governance as a lens, and when it’s not serving shareholder interests, it’s a flag.”