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[–] 10 points 1 week ago* (1 child)

Not joking, so I'll elaborate: although I still own them because they aren't a bad choice overall I believe index funds will likely not continue growing indefinitely and this period of history will prove to be exceptional, so I disagree with the narrative that it is always a better choice to trust them over your own judgment. Here's some possible reasons for this:

  • They track the growth of the US empire, which faces increasing risk of collapse
  • They track global population growth, which is halting, bringing an end to the pyramid scheme of larger new generations of labor
  • As a general principle, resources are finite and infinite growth is a contradiction
  • Even if the economy overall continues to grow, political corruption or other factors can force index funds to be packed with companies that have delusional valuations. If financial institutions have an obligation to buy trash on behalf of investors, that grift could go on for a while before blowing up. The whole mechanism that makes it work as an investment is that they are correctly reading, and the market is giving, accurate signals about the value of companies that you can copy trade in aggregate, but that could break or be broken.
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  • [–] 5 points 1 week ago

    Yep. Keep in mind that investing in index funds was a successful strategy during a period when it was not so commonplace. When it becomes the norm the whole foundation of why it was successful changes.

    You actually have to have people analysing companies and stocks, ie actively trading based on fundamentals, for it to work. Index investing is piggybacking in that. But when it becomes the driving force the market loses its ability to pick winners and gets dominated by momentum, and can be taken advantage of

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