Post by sd2 on May 20, 2021 16:20:22 GMT
Apr 18, 2021 18:52:16 GMT @wallstreet said:
Complete and utter bull excrement.
ETF are effectively a form of leverage in the markets. They ultimately amplify the concentration of assets on the same ideas. Hence "feeding the herd mentality".
So many dumb retail investors think FAANGs are the next best thing, so they pile in with equities and leveraged tools such as CFDs and spread bets.
More dumb retail investors from a different group think passive investing is the next best thing.
Buy ETF -> ETF contains FAANG -> Act of buying merely adds to upwards pressure on FAANG.
You might seek to say "nothing wrong with upwards pressure, price goes up, win-win".
Well no. Highly concentrated upwards pressure leads to an unhealthy market.
Which is basically what you see in the US indices which are basically FAANG trackers with x-hundred random names tagged onto the end of the sheet that don't have much effect.
Its not rocket science to comprehend. 
FAANG is < 10% of the FTSE all world.
