Too many people using index Funds?
I sincerely hope that someday the
SEC makes hedge funds available to all investors. Everyone can benefit from
these strategies. And the traditional long-short equity fund is a lot less
exotic than a double-inverse volatility ETN.
Goldman Sachs CEO Lloyd Blankfein
took all kinds of guff for saying that he and other bankers were doing “God’s
work.” I’m actually going to lightly endorse his comments in the context of
hedge funds, while leaving God out of it. Hedge funds, in the process of trying
to get stupidly rich, do a lot more to enhance price discovery than any other
financial actor. The crazy market efficiency that people enjoy is largely due
to unregulated private investment partnerships. Not to mention helping
investors big and small realize their goals.
It’s true—the conventional wisdom
is pretty much wrong about everything.
John Maudin
I don't think Index funds are a problem yet. I only see two small problems with indexing if they get bigger.
1.Index Funds tended to invest in the bigger/established/yesterday despite the future expected returns. Indexing don't care for the the new thing because it's small with low market cap.
2.If the Index funds don't go to the shareholders meetings and demand a certain attitude from the Board & main executives perhaps the company executives get a bit lazy
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