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It’s because you just lived through a 10 year period of the best growth for passive, and there is a tremendous amount of marketing online for passive. I don’t

by groundzeros2015 5mo ago

It’s because you just lived through a 10 year period of the best growth for passive, and there is a tremendous amount of marketing online for passive. I don’t disagree with your basic idea, but not being able to articulate alternatives so that you know when they make sense is going to hurt you. We are possibly seeing a major failure mode for passive for the first time.

abustamam 5mo ago
That's true, but what are the alternatives? Personally I do have alternative investments (crypto, random held stocks) but it's because it's fun money - if it goes to zero, I'm not going to lose the house. If it's the first time it's failing then there's really nothing anyone can do to prepare for it, and I certainly wouldn't recommend laypeople to try to time the market.
- groundzeros2015 5mo ago
  Alternatives include - paying a mutual fund manager (who will skip the SpaceX ipo) - other assets classes like real estate and bonds - less diversified stock holdings In this story we determined that S&P is going to choose a path different that other ETFs. Does that mean these ETFs differ in quality? Which should you pick?
  - abustamam 5mo ago
    A properly diversified portfolio should have bonds even with a lower risk profile. Some even include real estate now, since REITs are so popular. Target date funds do this automatically, and rebalance, cheaply. Mutual funds aren't bad but the average person won't realize that they're paying a percentage of their assets, not a flat fee, to the manager. If the fund class can beat the market by more than that percentage then it could be worth it, otherwise pick an ETF that has the risk profile you can tolerate. But the first step would be to understand that.
SubjectToChange 5mo ago
>and there is a tremendous amount of marketing online for passive. There’s a lot of advocacy for passive investing because it’s practically the only good option for retail investors. Managed funds can actually afford to advertise. There are problems with passive investing becoming such a large portion of public investment, it is practically corporate welfare. But when the alternatives are at or around 2 and 20, with most performing worse than index funds, it’s irrational for the average person to do anything but passive investing.
- groundzeros2015 5mo ago
  Passive has been good and I’m mostly a passive investor. I’m arguing that we are seeing structural changes which expose you to more risk and may make alternatives more appealing. > because it’s practically the only good option for retail investors. If you’re hearing about something, it’s because someone organized that message > Managed funds can actually afford to advertise. Have you seen how much money and corporate influence Vanguard and black rock have? > with most performing worse than index funds At the same risk level?

abustamam 5mo ago

That's true, but what are the alternatives? Personally I do have alternative investments (crypto, random held stocks) but it's because it's fun money - if it goes to zero, I'm not going to lose the house. If it's the first time it's failing then there's really nothing anyone can do to prepare for it, and I certainly wouldn't recommend laypeople to try to time the market.

groundzeros2015 5mo ago
Alternatives include - paying a mutual fund manager (who will skip the SpaceX ipo) - other assets classes like real estate and bonds - less diversified stock holdings In this story we determined that S&P is going to choose a path different that other ETFs. Does that mean these ETFs differ in quality? Which should you pick?
- abustamam 5mo ago
  A properly diversified portfolio should have bonds even with a lower risk profile. Some even include real estate now, since REITs are so popular. Target date funds do this automatically, and rebalance, cheaply. Mutual funds aren't bad but the average person won't realize that they're paying a percentage of their assets, not a flat fee, to the manager. If the fund class can beat the market by more than that percentage then it could be worth it, otherwise pick an ETF that has the risk profile you can tolerate. But the first step would be to understand that.

SubjectToChange 5mo ago

>and there is a tremendous amount of marketing online for passive. There’s a lot of advocacy for passive investing because it’s practically the only good option for retail investors. Managed funds can actually afford to advertise. There are problems with passive investing becoming such a large portion of public investment, it is practically corporate welfare. But when the alternatives are at or around 2 and 20, with most performing worse than index funds, it’s irrational for the average person to do anything but passive investing.

groundzeros2015 5mo ago
Passive has been good and I’m mostly a passive investor. I’m arguing that we are seeing structural changes which expose you to more risk and may make alternatives more appealing. > because it’s practically the only good option for retail investors. If you’re hearing about something, it’s because someone organized that message > Managed funds can actually afford to advertise. Have you seen how much money and corporate influence Vanguard and black rock have? > with most performing worse than index funds At the same risk level?