3 ms·

Did you mean to reply to my post? I don't see the relevance.

• whatshisface 7y ago
  An index passively holding 99% of the market would not interfere with price discovery because the remaining 1% would go about its business as if nothing was different. Indexes can't sustain irrational prices because they have no impact on prices.
  • whatok 7y ago
    A single entity holding 99% of anything will absolutely have an impact on liquidity which absolutely impacts price discovery.
  • usefulcat 7y ago
    > An index passively holding 99% of the market would not interfere with price discovery because the remaining 1% would go about its business as if nothing was different. That may be true at the point in time where it's already at 99%, but consider the impact on prices as funds were poured into it over time on the way to 99%..
    • whatshisface 7y ago
      If the funds put in to the index were taken out of mutual funds, there might not be any impact on the prices at all.