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It no doubt benefits individual investors, but if index funds were to swallow up the market the main benefit of capitalism - the efficient allocation of capital
by jwatt 7y ago
It no doubt benefits individual investors, but if index funds were to swallow up the market the main benefit of capitalism - the efficient allocation of capital - would at some point arguably be destroyed. That raises the question of whether/when a centrally planned economy would start to outperform such a passive system?
- thekyle 7y agoIf index funds were to become an inefficient way to allocate capital then their returns would become subpar and money would go elsewhere.