4 ms·
> If you have a 401k I guarantee you that a significant amount of your money was traded by an algorithm that if broken would have lost everything How so? My 40
by umanwizard 5y ago
> If you have a 401k I guarantee you that a significant amount of your money was traded by an algorithm that if broken would have lost everything
How so? My 401k is invested in a fund that just owns a broad index of stocks, not an algorithmic trading hedge fund.
- mason55 5y agoEven that has an "algorithm" behind it - they have to manage inflows & outflows, the heartbeat trades if it's an ETF, etc. Vanguard doesn't have a person sitting there buying a little bit of AAPL every time someone invests in VTSAX. OP is trying to say that even something as simple as VTSAX could have a problem and, I don't know, accidentally sell all its AAPL and so it's proof that even for the current market there are rules that govern. Except, of course, if VTSAX dumped all their AAPL somehow the trade would be unwound, as trades occasionally are. Selling stock on the market is not nearly as irreversible as it may seem.