The PROBLEM with INDEX FUNDS.

I am a massive fan of Index funds and I am not alone. So let's explore some of the growing concerns about index funds and the idea there is an index fund bubble.

In the last 20 years index funds have gone from obscure novelty to one of the dominant forces in world finance over taking actively managed funds in popularity in the last 3 years. It isn't hard to see why Index funds and ETFs are cheap, easy to use and passive in their approach add to this the fact the world basically hates hedge fund managers and private bankers and the stage was always set for Index funds to take over.

But nothing in life is perfect and it is becoming apparent that neither are Index funds. So today let's look at a couple of the main gripes people have with them and see how worried we should be about index funds.

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Links, Sources
Seeking alpha article: https://seekingalpha.com/article/4009991-index-front-running-what-happens-when-stock-is-added-to-index
CNBC article: https://www.cnbc.com/2019/03/19/passive-investing-now-controls-nearly-half-the-us-stock-market.html#:~:text=Passive%20funds%20now%20have%2025.3,13%20percent%20from%2012.9%20percent.
Investopedia articles on the issues with Index funds:
https://www.investopedia.com/articles/stocks/09/reasons-to-avoid-index-funds.asp
https://www.investopedia.com/how-index-funds-are-hurting-investors-and-the-market-4688627
Timestamps
00:00 – If I said I hated index funds
01:13 – The negatives I won't consider and why.
02:38 – Problem 1 - The tail starts to wag the dog
04:08 – Does front running shed some light on this?
05:02 - No one fund should have all that POWER!!
06:50 - It is up to the regulators
07:13 - Don’t let headlines scare you
08:03 - what will i do about it?

Disclaimer: Any information provided in this video is meant purely for entertainment purposes and does not constitute any form of recommendation, They are simply my opinions. If you want financial advice tailored to your circumstances please consult with a licensed professional.

Видео The PROBLEM with INDEX FUNDS. канала Damien Talks Money