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Many Happy Returns

Passive Power: Do Index Funds Hurt the Economy?

Nov 15, 2023
This podcast explores the potential harm of index funds on market competition and consumer prices. It discusses the concept of common ownership and its effects on industries. The dominance of mega-cap companies and concerns of anti-competitive behavior are also analyzed. The impact of index funds on tax avoidance and higher prices is explored. The long-term concerns of monopoly pricing power and the attractiveness of government bonds as investment options are discussed.
34:51

Podcast summary created with Snipd AI

Quick takeaways

  • The increasing dominance of indexing through index funds may lead to less competition and higher prices in the market.
  • The negative effects of common ownership, such as reduced competition and increased tax avoidance, are still a topic of debate and the evidence is not conclusive.

Deep dives

The Rise of Index Funds and Criticism

Index funds have gained popularity due to their simplicity, low costs, and historical superior returns. However, critics argue that the increasing dominance of indexing may lead to less competition and higher prices in the market.

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