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by apo
2760 days ago
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He also warned in 2017: Bogle noted that trading would dry up if the stock market comprised only indexers and there were no active investors setting prices on individual issues. Everyone would just buy or sell the market. ... Shareholders of index funds could then suffer more than owners of actively managed funds, and they could take their losses harder due to the perceived security they feel precisely because they merely own the market and aren’t trying to beat it. That might make active investors feel a bit of schadenfreude for indexers who have been free-riding at their expense, but the feeling probably wouldn’t last. The greater price swings that could ensue in a heavily indexed, less-active market are likely to exacerbate losses for everyone. https://www.marketwatch.com/story/john-bogle-has-a-warning-f... It seems a good bet that this warning, like most pre-downturn warnings, will only become obvious during the next major downturn. |
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