Comment by chii
9 hours ago
which, if true, would make an arbitrage opportunity for a fund that explicitly excludes these high valuation targets but buys those trimmed companies (because for trimming to have happened, they must've been sold unwillingly and thus must be under-priced).
Which, again, benefits the wealthy and well-informed and well-connected.
The suckers who have their retirement savings in some kind of index fund because all the experts have been saying, "Buy index ETFs and forget about it" for decades are gonna get fleeced, and the wealthiest get wealthier.
What to do then, if "Boogleheads" are wrong?
I suppose everyone reading this thread counts as "well-informed" then, right? All I have to do is move my 401k into the bond-heavy fund right now and then back into the stock-heavy one when everything craters is what I'm hearing. It's what you're doing, right?
If you are subject to capital gains taxes, this would likely be a bad idea? (Though I have no clue how American 401k work in this regard.)
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You are giving up equity premium for the time till everything settles. You will also not know when that is. It's going to be more like a long term ticking bomb that may take years to detonate.
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That's not what arbitrage means