Elon Musk on Dangers of Passive Investing (feat. Jack Bogle) | Elon's Warning to Passive Investors

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Investing IQ

Investing IQ

Күн бұрын

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Today, I react to Elon Musk's recent tweet where he warned of the danger that Passive Investing (buying Index Funds & ETFs) may have on the Stock Market. We also look at a similar warning from the creator of the Index Fund, Jack Bogle (Founder of Vanguard) back in 2018, where he warned of severe consequences in the coming era. I look at both points in detail and discuss what may or may not happen in the future if their predictions come to fruition! I hope you enjoy the video :)
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Пікірлер: 11
@investingiq
@investingiq Жыл бұрын
Let me know your thoughts on what will happen with the Big 3 and Index Funds (or ETFs) in the future?
@heavenmystery
@heavenmystery Жыл бұрын
Real question is, how do people outside usa can buy it ? I am from Indonesia
@investingiq
@investingiq Жыл бұрын
@@heavenmystery buy ETFs? I'm not sure about Singapore but in Australia, we have brokers that allow international trading. Try Googling trading apps/brokers in Singapore that allow you to buy US ETFs :)
@paulsteven4551
@paulsteven4551 Жыл бұрын
Elon worrying about losing control.
@chrisaustralianfinance9204
@chrisaustralianfinance9204 Жыл бұрын
Understand the concerns over voting rights but honestly as a passive investor I couldn't care less. Better for people smarter than me to make those decisions. I can't see why they would ever vote on something that would hurt your position. Genuine concern over the large adoption of index funds. I don't think it will be a problem until you start seeing more than 50% of capital invested in these funds as they start to drastically increase volatility caused by active investors buying an selling. Great video Senan.
@investingiq
@investingiq Жыл бұрын
Thanks Chris! Yeah itll be interesting to see what happens as they overtake active funds. Hopefully it doesnt upset the balance of the market too much
@chrisaustralianfinance9204
@chrisaustralianfinance9204 Жыл бұрын
@@investingiq I don't think it'll matter too much. If there's an inherent crash all stocks go down somewhat equally and it doesn't really change the market cap as a percentage of the whole market. What I think you will see is that with businesses that have bad news, say active investors unload tesla all the way from 800 a share to 700 a share. It changes the market cap of telsa to the total market and thus index's start selling that share too to reallocate which will further drop the price. It essentially magnifies what active investors are doing.
@investingiq
@investingiq Жыл бұрын
@@chrisaustralianfinance9204 yeah I agree. You'll also have the flip side where passive funds will buy a stock regardless of the price, and push prices up to higher levels. Could be a big reason why the overall market is more expensive than the historical average.
@robby95036
@robby95036 Жыл бұрын
Don't forget it's not what amount is invested in them, its trade volume.
@rajibear77
@rajibear77 Жыл бұрын
I think many have turned to passive investing as on the whole active investors have done poorly. There are some exceptions. I think th eactive investment management industry really needs to revise incentives . The OIEC structure is not good and all active investors should eventually have closed end funds with permanent capital structure.
@investingiq
@investingiq Жыл бұрын
Yeah I totally agree, and it makes sense why passive has boomer because people dont want to invest in active funds. I just wish there was a shift back to individual investing :)
Stay on your way 🛤️✨
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