4 ms·

Index funds, for starters.

quickthrowman 3mo ago
I don’t even have access to a NASDAQ fund in my 401K. You have to go out of your way to buy the NASDAQ 100, QQQ and /NQ or /MNQ futures are the most popular instruments for getting exposure. I have a tiny minute slice of SPCX from owning VTI total market ETF but my 401K holds no SpaceX.
- malfist 3mo ago
  Okay? Just because you don't have access to that investment vehicle doesn't mean others aren't using it. What type of reasoning is this? "I, personally, am not too badly effected, therefore it's not a problem" And guess what, your VTI which does track NASDAQ as part of it's index is effected by this inclusion rule.
  - danielmarkbruce 3mo ago
    His reasoning is valid. Compared to the S&P500, it's a small sum of money. Most people aren't buying a fund that tracks that nasdaq index. The total effect isn't that large.
    - malfist 3mo ago
      His reasoning isn't valid. Not only is he wrong that it doesn't impact him, because VTI is impacted, but the whole premise is wrong. "I'm not harmed" does not mean things are fine. If I go murder your neighbor, will you come to my trial and demand I go free because you weren't harmed? Should the judge let me go because he wasn't harmed?
      - danielmarkbruce 3mo ago
        He wasn't making the case he isn't harmed. He was making the case that the effect isn't large. You don't appear to understand the claim itself, let alone the reasoning. Just because you don't understand the basics of the financial system, or the different indices, or the amount of money flowing into the funds that track each, it doesn't mean others don't. The impact if it had been included in the S&P500 would have been at least an order of magnitude more than just the nasdaq 100.
        malfist 3mo ago
        Your honor, I only murdered one person, that effect size isn't large, there's 9 billion people on earth. You should dismiss this case.
        danielmarkbruce 3mo ago
        Classic apples-to-peanuts comparison
        quickthrowman 3mo ago
        There’s around five trillion dollars indexed to the S&P 500 in large funds. QQQ is half a trillion dollars. If you look at Fidelity mutual funds, the difference is even greater. FXAIX has $827B in it, USNQX has $9.6B in it. The absolute dollars do matter, as do the risk characteristics of both baskets of stocks. If and when SPCX meets the S&P 500 index criteria it will be included. Also, NASDAQ both operates the NASDAQ exchange and also decides what is in the NASDAQ 100. S&P decides what is in the S&P 500 but they do not operate an exchange. Allowing SPCX into the NASDAQ 100 was good for NASDAQ the exchange and it was legal, so it happened. The S&P 500 committee was not facing the same incentive so SPCX will have to wait until it meets the criteria for inclusion. If you understand the incentives, you can predict the outcome. I agree that it sucks that QQQ holders had to swallow SPCX. One last thing, if you reread my post, I explicitly acknowledge I have exposure to SPCX through VTI which I own in my Roth IRA. As of right now, 0.14% of VTI is SPCX which means I have $91 of exposure. I think I’ll be OK if it goes to zero :) I said I have no SPCX in my 401K which is just FXAIX, an S&P 500 index fund.
- stackghost 3mo ago
  >QQQ and /NQ or /MNQ futures are the most popular instruments for getting exposure. QQQ tracks the Nasdaq 100. It's an index fund. If the index includes a new ticker, then QQQ has to buy it. Buying QQQ doesn't seem like going out of one's way. I don't understand your comment. "ETFs and chill" is a very common investment strategy.
  - tjwebbnorfolk 3mo ago
    And who is forced to buy QQQ?
    - stackghost 3mo ago
      I'm not sure why that's relevant. The original discussion was about who's forced to buy NDX 100 stocks like SpaceX. The answer to that is "index funds". Asked and answered. Whatever cute point you're trying to make is rendered moot by real market dynamics and index inclusion rules.
    - lokar 3mo ago
      Many retirement accounts have limited options, leaving few passive index options. I sort of doubt many would offer qqq but not s&p, but it’s possible
    - wredcoll 3mo ago
      Why was musk/spacex so interested in having the rules broken to include spacex stock? Do you think maybe there was a reason that involved musk benefitting??
  - quickthrowman 3mo ago
    There’s an order of magnitude more money indexed to the S&P 500, you have to go out out your way to buy QQQ since NASDAQ 100 and total market funds are uncommon in 401K options for employees. QQQ is more volatile and higher risk than the S&P 500, the people buying it should understand that.
  - lokar 3mo ago
    You could buy QQNE :)
NetMageSCW 3mo ago
Who forces them?
- malfist 3mo ago
  Literally the index. If you track the NASDAQ as part of your index you must obey it's inclusion rules.
  - hk__2 3mo ago
    Ok but there are very few indices following NASDAQ, compared to S&P 500.
    - shagie 3mo ago
      It's not NASDAQ as a whole... it's NASDAQ 100. https://etfdb.com/index/nasdaq-100-index/ https://etfdb.com/index/nasdaq-100-index/ are the ETFs that track that index.
      - hk__2 3mo ago
        Yes sorry I meant NASDAQ 100.
  - tjwebbnorfolk 3mo ago
    Contrary to (apparently) popular opinion, index funds are not people. So, who is being forced to buy that index?
    - pessimizer 3mo ago
      Turns out people (and institutions like municipalities and pension funds) sometimes buy index funds before SpaceX enters the NASDAQ 100, and changing their policies over a single event would be a great effort and expense, and set a bad precedent. Sounds crazy, but it's true. Nobody has any idea what point you're trying to make, and the fact that you're repeating yourself and not being clearer makes everyone suspect that you don't have any idea either.
tjwebbnorfolk 3mo ago
Contrary to (apparently) popular opinion, index funds are not people.
- moomin 3mo ago
  No, they're just owned by people. Most of whom aren't billionaires.
- rmunn 3mo ago
  Correct. Index funds are owned by people. For example, I have invested a large chunk of my retirement savings in an S&P 500 indexed fund (as many, many other people do). Whatever stocks the S&P 500 list, are what I end up owning; if I don't want to own one of those, I have to either roll that money into a different fund (which IIRC has limits, can't do that too often without tax consequences) or take the money out (and pay a tax penalty for withdrawing it before retirement). So whether the index funds do or don't buy a certain stock has direct implications for real, non-millionaire, people.
- stackghost 3mo ago
  This is such a weird response because nothing about index fund inclusion rules has anything to do with whether or not a fund is a person. Complete non sequitur. Can you explain what you mean? Did you accidentally reply to the wrong comment?
  - tjwebbnorfolk 3mo ago
    No you're confusing where agency lies. The Nasdaq 100 is just a fund. Its existence doesn't force you or anyone else to do anything. People can choose to buy stocks, and people can choose to buy the Nasdaq 100. Or not. Nobody is making you.
    - stackghost 3mo ago
      >No you're confusing where agency lies. I assure you I am not. >The Nasdaq 100 is just a fund. Its existence doesn't force you or anyone else to do anything. People can choose to buy stocks, and people can choose to buy the Nasdaq 100. Or not. Nobody is making you. This is irrelevant. QQQ is the one that's forced to buy all the constituents of the index, including SpaceX. This has been pointed out to you several times, but you seem unwilling to accept that fact.

I don’t even have access to a NASDAQ fund in my 401K. You have to go out of your way to buy the NASDAQ 100, QQQ and /NQ or /MNQ futures are the most popular instruments for getting exposure. I have a tiny minute slice of SPCX from owning VTI total market ETF but my 401K holds no SpaceX.

malfist 3mo ago
Okay? Just because you don't have access to that investment vehicle doesn't mean others aren't using it. What type of reasoning is this? "I, personally, am not too badly effected, therefore it's not a problem" And guess what, your VTI which does track NASDAQ as part of it's index is effected by this inclusion rule.
- danielmarkbruce 3mo ago
  His reasoning is valid. Compared to the S&P500, it's a small sum of money. Most people aren't buying a fund that tracks that nasdaq index. The total effect isn't that large.
  - malfist 3mo ago
    His reasoning isn't valid. Not only is he wrong that it doesn't impact him, because VTI is impacted, but the whole premise is wrong. "I'm not harmed" does not mean things are fine. If I go murder your neighbor, will you come to my trial and demand I go free because you weren't harmed? Should the judge let me go because he wasn't harmed?
    - danielmarkbruce 3mo ago
      He wasn't making the case he isn't harmed. He was making the case that the effect isn't large. You don't appear to understand the claim itself, let alone the reasoning. Just because you don't understand the basics of the financial system, or the different indices, or the amount of money flowing into the funds that track each, it doesn't mean others don't. The impact if it had been included in the S&P500 would have been at least an order of magnitude more than just the nasdaq 100.
      - malfist 3mo ago
        Your honor, I only murdered one person, that effect size isn't large, there's 9 billion people on earth. You should dismiss this case.
        danielmarkbruce 3mo ago
        Classic apples-to-peanuts comparison
        quickthrowman 3mo ago
        There’s around five trillion dollars indexed to the S&P 500 in large funds. QQQ is half a trillion dollars. If you look at Fidelity mutual funds, the difference is even greater. FXAIX has $827B in it, USNQX has $9.6B in it. The absolute dollars do matter, as do the risk characteristics of both baskets of stocks. If and when SPCX meets the S&P 500 index criteria it will be included. Also, NASDAQ both operates the NASDAQ exchange and also decides what is in the NASDAQ 100. S&P decides what is in the S&P 500 but they do not operate an exchange. Allowing SPCX into the NASDAQ 100 was good for NASDAQ the exchange and it was legal, so it happened. The S&P 500 committee was not facing the same incentive so SPCX will have to wait until it meets the criteria for inclusion. If you understand the incentives, you can predict the outcome. I agree that it sucks that QQQ holders had to swallow SPCX. One last thing, if you reread my post, I explicitly acknowledge I have exposure to SPCX through VTI which I own in my Roth IRA. As of right now, 0.14% of VTI is SPCX which means I have $91 of exposure. I think I’ll be OK if it goes to zero :) I said I have no SPCX in my 401K which is just FXAIX, an S&P 500 index fund.
stackghost 3mo ago
>QQQ and /NQ or /MNQ futures are the most popular instruments for getting exposure. QQQ tracks the Nasdaq 100. It's an index fund. If the index includes a new ticker, then QQQ has to buy it. Buying QQQ doesn't seem like going out of one's way. I don't understand your comment. "ETFs and chill" is a very common investment strategy.
- tjwebbnorfolk 3mo ago
  And who is forced to buy QQQ?
  - stackghost 3mo ago
    I'm not sure why that's relevant. The original discussion was about who's forced to buy NDX 100 stocks like SpaceX. The answer to that is "index funds". Asked and answered. Whatever cute point you're trying to make is rendered moot by real market dynamics and index inclusion rules.
  - lokar 3mo ago
    Many retirement accounts have limited options, leaving few passive index options. I sort of doubt many would offer qqq but not s&p, but it’s possible
  - wredcoll 3mo ago
    Why was musk/spacex so interested in having the rules broken to include spacex stock? Do you think maybe there was a reason that involved musk benefitting??
- quickthrowman 3mo ago
  There’s an order of magnitude more money indexed to the S&P 500, you have to go out out your way to buy QQQ since NASDAQ 100 and total market funds are uncommon in 401K options for employees. QQQ is more volatile and higher risk than the S&P 500, the people buying it should understand that.
- lokar 3mo ago
  You could buy QQNE :)

NetMageSCW 3mo ago

Who forces them?

malfist 3mo ago
Literally the index. If you track the NASDAQ as part of your index you must obey it's inclusion rules.
- hk__2 3mo ago
  Ok but there are very few indices following NASDAQ, compared to S&P 500.
  - shagie 3mo ago
    It's not NASDAQ as a whole... it's NASDAQ 100. https://etfdb.com/index/nasdaq-100-index/ https://etfdb.com/index/nasdaq-100-index/ are the ETFs that track that index.
    - hk__2 3mo ago
      Yes sorry I meant NASDAQ 100.
- tjwebbnorfolk 3mo ago
  Contrary to (apparently) popular opinion, index funds are not people. So, who is being forced to buy that index?
  - pessimizer 3mo ago
    Turns out people (and institutions like municipalities and pension funds) sometimes buy index funds before SpaceX enters the NASDAQ 100, and changing their policies over a single event would be a great effort and expense, and set a bad precedent. Sounds crazy, but it's true. Nobody has any idea what point you're trying to make, and the fact that you're repeating yourself and not being clearer makes everyone suspect that you don't have any idea either.

tjwebbnorfolk 3mo ago

Contrary to (apparently) popular opinion, index funds are not people.

moomin 3mo ago
No, they're just owned by people. Most of whom aren't billionaires.
rmunn 3mo ago
Correct. Index funds are owned by people. For example, I have invested a large chunk of my retirement savings in an S&P 500 indexed fund (as many, many other people do). Whatever stocks the S&P 500 list, are what I end up owning; if I don't want to own one of those, I have to either roll that money into a different fund (which IIRC has limits, can't do that too often without tax consequences) or take the money out (and pay a tax penalty for withdrawing it before retirement). So whether the index funds do or don't buy a certain stock has direct implications for real, non-millionaire, people.
stackghost 3mo ago
This is such a weird response because nothing about index fund inclusion rules has anything to do with whether or not a fund is a person. Complete non sequitur. Can you explain what you mean? Did you accidentally reply to the wrong comment?
- tjwebbnorfolk 3mo ago
  No you're confusing where agency lies. The Nasdaq 100 is just a fund. Its existence doesn't force you or anyone else to do anything. People can choose to buy stocks, and people can choose to buy the Nasdaq 100. Or not. Nobody is making you.
  - stackghost 3mo ago
    >No you're confusing where agency lies. I assure you I am not. >The Nasdaq 100 is just a fund. Its existence doesn't force you or anyone else to do anything. People can choose to buy stocks, and people can choose to buy the Nasdaq 100. Or not. Nobody is making you. This is irrelevant. QQQ is the one that's forced to buy all the constituents of the index, including SpaceX. This has been pointed out to you several times, but you seem unwilling to accept that fact.