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Ep.108 Real Conversations: Market Risks + Opportunities | Mike Green & Mike Taylor w/ Keith McCullough

Hedgeye Podcasts

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The Impact of Fund Flows on Market Dynamics

In this chapter, they discuss the dynamics of fund flows and how contributions and withdrawals from investors can impact the market. They mention that when one person's contributions outweigh another person's withdrawals, the funds may have to start selling assets. They also talk about the underperformance of certain indices and the firing of active managers. They touch on the changing rules in the industry and how the creation of indices like the S&P 500 was meant to encourage people to buy stocks. They mention the impact of interest rates on valuations and how stocks can shift from leading assets to lagging assets. The chapter ends with a mention of the hardship withdrawal rate of 401k plans and the financial difficulties faced by many people.

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