[martinald]

Is it? I thought the idea was diversity of risk, not "mitigating risk". You clearly don't want 100% of your 401k in OpenAI or Anthropic. But you probably do want 1 or 2% of it in, to give you the long term growth potential?

Regardless SPY is actually a pretty "risky" index fund on some measures - it pays a (very) low dividend compared to many other intl/ETF funds and is weighted very heavily towards tech stocks (atm).

If you genuinely wanted to mitigate risk you would probably not choose SPY.

[xracy]

> Is it?

Given that they've had to change the rules of index funds to allow for this, yes, this is not what people expect.

[martinald]

But the US has never had $1T+ IPOs before. And also a huge amount of enormous private companies that don't want to go public for various reasons.

Also, the rules have changed before. It's not the first time these rules have changed.

I see both sides of the argument (it's definitely _not_ good for 401k investors if Anthropic/OpenAI/SpaceX make huge leaps in technology that allow for far higher earnings that they aren't able to access, for example).

But my main point is that these investors regardless would "only" have 5% exposure to these. That surely cannot be considered a systemic risk that the OP is inferring.

[xracy]

That's justifying this because we've had rampant runaway inflation...

There's nothing special about the number $1T.