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(assuming you're asking in good faith) It's the same thing, just on a different scale. If you own, say, one share of VTSAX (Vanguard Total Market Index) you no
by zrail 7y ago
(assuming you're asking in good faith)
It's the same thing, just on a different scale. If you own, say, one share of VTSAX (Vanguard Total Market Index) you now own, by proxy, 1.8% of one share of Microsoft stock. You don't have any direct voting or economic rights but because of the way a mutual fund is structured you get most of the economic benefit of that fraction of a share. I.e. you get the benefit of most of the capital gain and dividends that it distributes.
I would personally say that if you want to actually "own the means of production" then directly owning shares is the way to go, but if you don't actually care about making decisions for specific companies then you get most of the benefits without any of the day-to-day thought and worry by owning shares in a mutual fund.
- SketchySeaBeast 7y agoI still don't know how that equates to actual ownership of anything - it seems like an incredibly abstract form of ownership, as you get no power, don't share in the profits (if you don't get dividends you only get cash if you sell, that price being only vaguely linked to the current success of the company), and can have your ownership watered down at any time. You own the stock, but that seems incredibly distant from any "means of production".
- zrail 7y agoYeah it’s pretty abstract. One correction, you definitely do get the dividends that a company pays if you own them through a mutual fund. Funds report their net asset value (NAV) every night and when a company pays dividends it raises the fund’s NAV. US funds are required to pay out dividends to their shareholders as part of their tax status (basically a very specific type of non-profit).