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A platform dedicated to providing investors with accurate and up-to-date information has launched a new report on index funds and exchange-traded funds (ETFs). The team at Wealth Building Way explain the report is designed to provide insight to investors who want to learn about index funds after Michael Burry’s infamous comparison of them to subprime CDOs.
Read the report in full at https://wealthbuildingway.com/michael-burry-trashes-index-funds-are-we-screwed/
The newly launched report explains that although index funds received bad press from the Big Short’s Michael Burry, they also receive a lot of positive press. The report explains index funds are a low-cost way for investors to track popular stock and bond market indexes.
It was designed to offer investors a win/win proposition that they could set and leave explain the team. They add that the math and historical performance for over 40 years have proven this since the inception of index funds.
Wealth Building Way and the team explain the nature of index funds makes them hard to predict, which is why they advise sitting somewhere in the middle of the volatility while minimizing the associated fees.
Michael Burry’s key points and concerns are summarized within the report before the team provide a detailed response to each. For instance, the report highlights the fact Burry believes passive investing can distort the prices of individual stocks, because everything is purchased at a fixed ratio without considering the value of each company.
However, the team explain active traders have been making this argument against passive investing since its inception. While the theory is technically correct, it would only be an issue in practice if too many people became passive traders explain the team.
They add that to clarify, the tipping point for active and passive traders is not close. They explain index funds account for around 18 percent of global shares and 45 percent in the US. This means that active trading outweighs index fund trades by 22-to-1.
A representative said: “The stock market is built upon the fundamentals of earnings and dividends. Not on news snippets and soundbites of rapid trading. And since publicly traded companies are big slow entities with hundreds of employees and thousands of customers, their fates simply do not change quickly.”
Interested parties are invited to visit the link provided to read the report in full.
Release ID: 88992559