Ahhh, retail investors.
Proponents of passive investing are going to keep insisting that the epochal active-to-passive shift isn’t dangerous or otherwise prone to destabilizing markets. They’re going to take that narrative to the grave apparently.
Boy, you morons are a fickle bunch, I’ll tell you what.
“Unlike active investors, they cannot express their disagreement with the decisions of individual issuers by selling their holdings.”
Well damn. That moved from “early-stage” to “advanced” de-risking pretty goddamn quickly, didn’t it?
“Better late than never.”
I’m just guessing, but…
“But for a universe of individual investors (and rather distressingly, probably some institutional investors, too), the message of empowerment is anything but. It’s a nudge into terrible portfolios, terrible costs and terrible outcomes. But hey, at least they got religion and implemented those terrible, far-too-actively-traded portfolios with ETFs!”
“If you want to do such a crazy thing, it certainly makes it easy to do.”
“Should the markets begin to reverse, however, investor goals will turn to capital preservation and limiting losses.”
“In addition, we hear things like… I don’t want to leave a footprint across the day for some High Frequency sniffing algo.”
“…which have morphed into a type of Black Hole. Money goes in and stocks never come out (as least for now).”
“Just because concerns about market complacency this year proved to be wrong, it does not mean that they are not justified today, particularly as markets are even more bullish.”
Show of hands: who’s surprised?