Comment by throwaway85825
6 months ago
The suckers being fleeced are every pension fund in the world. They're demanding the S&P includes them faster to force ETF owners to buy in before the price tanks.
6 months ago
The suckers being fleeced are every pension fund in the world. They're demanding the S&P includes them faster to force ETF owners to buy in before the price tanks.
God forbid we participants in the stock market evaluate a business before investing in it, or do any sort of work to get the return we're promised.
I, for one, much prefer to earn a 9% return without expending any effort or thought at all.
For most people their talent and expertise does not involve investing. That's why pensions and 401ks exist and why S&P/nasdaq have rules to protect the public.
You may wish it were not so, you may find it inelegant and infuriating and unfair, but it is a fact that retail investors nearly all underperform the market over a long enough time horizon. Maybe you are built different but for most of us it is very rational to take the market return for “free”.
Do understand, though, that market return will struggle to achieve 9% for the coming decades. A 9% annualised return would put the US stock market at 50% of world GDP in 10 years (edit: 20) and something like 90% of world GDP in 30 years (edit: 50 years). Cost of goods, and your customer's money, both have to come out of global GDP too.
(The current value of around 25% of global GDP doesn't even include the 1.75 trillion SpaceX which alone would be another almost 1%...)
ETF expense ratios are small but still mean retail will underperform anyway. It's an unfortunate situation all around.
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Why are they being fleeced? If people didn't want to buy SpaceX they could buy some other ETF that doesn't include it. If there's enough of a demand I'm sure ETFs will be offered which include all the big indexed stocks except SpaceX.
Restructuring every ETF to be S&P but prior rules and no SpaceX would be enormously difficult.
Yes Americans will definitely move their 401k over this /s
Its fleecing because it basically takes everybody's money and gives it to support musk's money loser xai. SpaceX net profit 8 billion per year (previous years much less) and Xai was net losing 1.5 billion per quarter.