Making Money

Do global index funds have a problem?

4 snips
May 6, 2024
Debate on Global Index Funds, concentration risk in US tech sector, value of diversification, analysis of Japan's investment history, comparing Equal Weighting and Market Cap ETFs, impact of widespread index fund investment on market efficiency, rise of passive funds in American market
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ADVICE

Global Index Fund Investing

  • Invest in a global index fund for long-term growth, betting on the world's continued progress.
  • This "off-the-shelf" approach offers easy diversification and consistent monthly investments.
INSIGHT

Overexposure Concerns

  • Global index funds face concerns about overexposure to US tech, despite aiming for diversification.
  • This dominance of a few companies raises questions about true diversification and potential risks.
INSIGHT

Tech Reliance

  • Relying on tech is not new; it's a continuous evolution since humans first used tools.
  • Overexposure to specific tech sectors might offer high returns now, but it's cyclical and ignores other viable businesses.
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