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The article isn't referencing index investing as a strategy; it's talking about a strategy in which, for a while, you could make money by buying specific stocks
by reissbaker 4y ago
The article isn't referencing index investing as a strategy; it's talking about a strategy in which, for a while, you could make money by buying specific stocks when they met the criteria to be newly added to an index. That appears to no longer work, because markets have become more efficient and the value is already priced in.
- LoveMortuus 4y agoThat sounds like "timing the market". I prefer to repeat to myself the mantra of: "Time in the market beats timing the market."
- stouset 4y agoYes, that’s the point. People thought they could beat the market by timing buys of stocks that were likely to become part of indexes. If there was any alpha in this practice, it’s been sucked out of the market at this point. The anticipation of this has already been priced in, so there’s no remaining advantage in trying this strategy.