The Index Fund "Tipping Point"

I hardly know anything about this topic but its good to hear that my index funds are safe... for now.

Very informative as always. Liked 😊👌

Holy smoke he has hair 😳.

Hey Ben Felix, any good investment strategy that becomes overcrowded always leads to less returns for those implementing the strategy. I fear index funds will go down up to 5% a year just because of the sheer number of passive investors sharing the proceeds of the growth of the index. In such a case only those holding Indexes with international exposure will be saved.

What are the implications of allowing the index managers, who dictate what companies get in or out of the index, to determine what we invest in?

All my active managed funds outperformed index even after fees after 20 years

I won't subscribe unless you shave your head.

Thanks for a well laid out video, based on empirical studies, while providing a succinct summary that was easy to comprehend. I hope you continue to make such digestible content for those who are newer to investing, such as myself!

Ben "14 ETFS in my high-fee portfolio" Felix

It is time for chatgpt-like models start being used to clean the shameful scammers' comments that always appear on finance channels. It always starts as someone stating something "innocent" ending up being lead to some supposedly amazing "advisor". So shameful. Please Google, so something about this. You have the tools for that.

So, your conclusion is we should all keep buying what you're selling? Who could have seen that coming?

Ben. Thank you for explaining a tough concept so well

Major indexes booked their worst yearly performance since 2008 thanks to drivers like the recession, war, hiked interest rate and inflation which so far doesn’t seem to be easing off, so I’m left wondering what 2023 has in store for us investors, I’ve been sitting on over $745K equity from a home sale and I’m not sure where to go from here, is it a good time to buy or do I wait?

Ben, what is your opinion on asset LOCATION when investing in etfs in canada. Is there any benefit to holding etfs in tfsa/rrsp and non registered taxable accounts over time? how can someone that is young make sure they are keeping there investments in the correct accounts as their portfolio grows. For example on an asset allocation etf like VEQT. To make sure when they go to sell off down the road or manually rebalance into a less equity focused investment strategy how can they hedge against losses from taxes in canada? thanks

But what index funds is he talking about?

In less inefficient markets like international small cap or emerging markets why wouldn’t you want active according to his logic?

In credit markets, why would is it more efficient to put money in an index fund heavily weighted towards treasuries and mortgage backed securities where you can simply add more corporate debt for higher yields and returns?

Your hair is back!

Attractive guy. Thanks for feeding my index fund confirmation bias

I'm new here, tell me if got it wrong, all I understood is that continue passive investing?

Can we get a video on yield to maturity of bonds? Schwab, and other supposedly reputable sources say that they assume coupon payments are reinvested at the same rate... If they truly make this assumption, then yield to maturity is a bizarre way to compare bonds because you can't know a priori what rate of return you will be able to achieve on coupon payments. Some literature on the topic says that this is stated erroneously in textbooks and by many that learned from those books in investor education materials, e.g. like those provided by Schwab. Certainly the standard formula for yield to maturity does not assume anything about reinvestment of coupons... so are some institutions (e.g. Schwab) using a nonstandard formula, or are they actually wrong to state that assumption? When attempting to get an answer from Schwab directly, their chat support doesn't have an answer and their fixed income specialists have been busy when I have tried calling so far. Any insight on this is appreciated.

Very helpful - thanks!

Hi, I was wondering what your investing strategy is for the upcoming months, are you already buying or do you think the market will present better opportunities for you?

Thanks a lot!

you have hairs!!!
OMG

just kidding
I've made a marathon with all you videos since I've discovered your channel
I've learned a lot
thank you from an italian guy

Hi Mr Ben,
You should do a video on student loan repayment (6.5% interest) vs investing.

Ben, that mop on your head needs to go..

thank you

Very informative, thanks.

Hear me out.

Passive funds will outperform active funds on average even if the market becomes inefficient.

By definition, half the actively managed dollars will perform better than average, and half will be below average. The index fund equals the average.

Before fees, the average active return equals the index return, after fees, the active return is worse.

This is just math, and doesn't change based on market efficiency.

Hair!

Subscribed. For the good information as well as for not having ridiculous thumbnails of silly faces, explosions, and red arrows.

There's no such thing as tipping point of any kind as far as I know
Most index funds like the S&P500 already only invest in be top 500 biggest companies and all those companies want to make more money. If a better company comes along and top the worst performing company then they get replaced. The only time you get negative results should be when there's an overall bear market because all stock value are still inherent on how much an company is worth and how much value, profit, revenue it has produced.

So the market regulates itself, and the market is always right. Lets hope the government dont step in to 'regulate' this last remaining free market activity.

You should do a video on subordinated debt!

Most times it amazes me greatly the way I move from an average lifestyle to earning over $65k per month, utter shock is the word, I have understood a lot in the past few years to doubt that opportunities abound in the financial markets, The only thing is to know where to focus

HE'S HAD HAIR THIS WHOLE TIME?!

So in conclusion, nobody knows anything. Cool.

Brilliant video! Thank you.

Hi Ben! Love your videos. You've made plenty of the videos in the past talking about capturing various risk premia in the market. I was wondering if you could make a video discussing whether it is beneficial to add the Volatility Risk Premium (VRP) to a portfolio either by selling options yourself or through some fund. Thank you!

Hello Ben. I love your material!. I think it would be great if you shared your thoughts on bonds investing. With interest rates being what they are, I reckon that now would be a great time to add bonds to a portfolio but I am pretty ignorant on what makes sense for most people on what to buy, how to buy, and how much.

This is me gathering more information (* goes to Ben's channel *)

Haha, shaved 🪒 is best ❤

Damn, I've seen so many videos saying that we're far away from such a tipping point but I've never heard the statement that unskilled investors switching to index funds making the market more efficient, even though it makes perfect sense

Hello sir, do investors actually own the stocks in an index fund or does the fund go up depending on how many other people own the fund? I’m confused on that cause spy and VOO are at different prices. Probably a dumb question but please answer:) thanks

The bigger the mutual funds get, the more passive they become. This guy is trying to secured his bag in this bloody market, too.

The thing is, for the last decade or so, aapl facebook msft tesla and other tech were responsible for all the gain in passive investing, but can those companies continue to deliver? I find it hard to believe.

I find it unfortunate that average working people have to put up with this stuff as part of just trying to save for retirement. Every year the need to game the system and scrounge like a raccoon through a trash heap increases.

Ive been investing mostly into passive, but through company investment that is offset by about 30% active

Great video.... if they had an MBA thesis this would work for a paper.

Where do you find these research papers?