3 ms·
>> if I had to choose between putting a large sum of money, say, $200,000 into a small business, which has a 90% chance of failing within 5 years, or the S&P 50
by jondubois 8y ago
>> if I had to choose between putting a large sum of money, say, $200,000 into a small business, which has a 90% chance of failing within 5 years, or the S&P 500, the choice is obvious..
Unfortunately, I've come to think that investing in the stock market (especially index funds) is unethical because it gives more power to corporations to lobby for regulations which will further distort the market, increase centralization and increase failure rates for small businesses. It's a vicious cycle, a self-fulfilling prophecy. Without mega-corporations, small businesses would have a much better success rate and consumers would benefit.
Blindly investing in the S&P500 is just feeding the corporate machine. You're giving real money to real companies and you don't know what they're doing with it. In my view, large index funds should be outlawed completely.
- Mikeb85 8y ago> You're giving real money to real companies and you don't know what they're doing with it. You're really not. You're more than likely buying some other investor's shares. Companies aren't constantly raising money on markets, if they did, shares would get incredibly diluted. Almost all volume is between investors.
- fulafel 8y agoMost of those sellers are stock market specialized institutional investors who have mostly those same problematic motives.
- zwkrt 8y agoUsing your money to create a business you believe in is the most direct form of "voting with your wallet".
- Green_man 8y agoAlternatively, investing in the stock market, when feasible for working class people is a very important way for them to improve their financial health. Index Funds and ETFs, while blind, have allowed a lot of people to benefit from the stock market without having an education on finance / business / specific industries.