upvote

points

by gitfan864 hours ago |
comments
upvoteby sigmoid104 hours ago|
next
[-]
This disregards the fundamental reason why people buy index funds in the first place. Rules for consistent GAAP profitability and cooldown periods specifically prevent retail investors from being exposed to particular malicious stock market tactics and overall risks that otherwise could significantly hurt them in the short term. So it's more like saying "you don't like extra risk? too bad."
reply
upvoteby syntaxing4 hours ago|
prev|
next
[-]
This is simply not true and a misrepresentation of the issue. There is no issue with SP500 buying into all these companies. The issue is that “valuation” should be determined by the market before the index funds buy into it hence the original rules and policy in place. Else wise we run into the issue now where our 401K is pumping the IPO, regardless of fundamentals.
reply
upvoteby cj4 hours ago|
prev|
next
[-]
> The fundamental reason S&P 500 exists is to let people buy the entire market

And why do people want to buy the entire market in the first place? They want to diversify and insulate themselves from a single company crashing their portfolio value.

What are people afraid of right now? They're afraid of a single company crashing their portfolio value.

Why are people afraid of their portfolio value crashing? Because these 3 companies will fundamentally increase the overall risk and volatility of the index.

Do you see the problem?

reply
upvoteby rjh293 hours ago|
parent|
[-]
The problem is people equating S&P 500 with "set and forget" investment when that's never what it was. It's an index. You're not paying anyone to balance it with a particular risk profile.

There are indexes that invest equal amounts of money into all companies, so Nvidia doesn't dominate. Or you can pick low growth high dividend indexes to insulate against AI. Or just grab Vanguard LifeStrategy if you don't want to think.

The current situation is unusual. No index can handle all situations. Either adapt or use a fund that does the thinking for you, right?

reply
upvoteby cj3 hours ago|
parent|
next
[-]
People use the dollar in business becaUse its a stable currency.

If the US does something to destabilize the dollar, will economists be running around saying “the dollar was never intended to be used for that purpose!”? No.

It doesn’t really matter if the index “wasn’t supposed” to be something it became. The problem is the same. The only difference is who you blame.

reply
upvoteby wat100002 hours ago|
parent|
prev|
[-]
The current situation is unusual and the standard rules handled it fine. For some reason they're changing the rules. That's not "no index can handle all situations." It's a deliberate, harmful change.
reply
upvoteby goolz3 hours ago|
prev|
next
[-]
Why the special rules for SpaceX though? I still do not understand why the world’s richest man and one of the most valuable companies needs an exemption? Genuinely confused.
reply
upvoteby DarkNova62 hours ago|
parent|
[-]
Makes you think how he got so rich in the first place…
reply
upvoteby webdood904 hours ago|
prev|
[-]
Why would you accept this? Who does this serve?

I want to believe the world is full of good people but I read stuff like this and realize otherwise.

reply