Search Results for: fed

Currency forms the backbone of a healthy economy. Mess with that… and we might mess up a whole lot more.

Mark Ford talks about the Corona Crash and how the U.S. federal government is handling it.

This is sure to be one of our most controversial columns. But if we don’t talk about it, we don’t know who will.

Despite the economy heading down a rabbit hole, stock markets are looking up, not down.

It doesn’t matter that it seems crazy, and it yet may be just that, but investors are betting the worst’s behind us, at least for markets, and the other side of all the panic and shutting down is here.

After all, countries are reopening. Businesses are reopening. And people just want to go out…

Here’s what businesses are doing (and should think about doing) during the unprecedented coronavirus pandemic.

The novel coronavirus isn’t new anymore, it’s everywhere and disrupting how we live, work, and invest.

Major paradigm shifts are already underway. Here’s how life as we know it is changing.

Major paradigm shifts are already underway. Here’s how life as we know it is changing…

The secret momentum driver elevating market indexes to all-time highs, again and again, is none-other than the “passive investing” trend. It’s going on unbeknownst to even the drivers of this momentum bus.

Investors who don’t understand how big an impact money flowing into index funds has had on the market’s performance probably have no idea what could happen if the trend stalls, or worse, reverses.

Here are the pitfalls of passive investing and how bad the fallout could be if passive investors discover the trap they’ve entered, turn active, and sell.

The almost self-perpetuating cycle of rising markets attracting passive investment capital into index products, which boosts the value of indexes as money flows into them, which attracts more sidelined money and compels investors to sell actively managed funds and buy passive index-following funds, which have been lowering their management fees since they aren’t actively managed, which attracts more investor capital into the growing universe of index funds, which keep increasing in value as sponsors and their authorized participants buy all the underlying stocks in the indexes they track when investors buy those packaged products in the open market, is, almost self-perpetuating.

But you know the saying, almost only counts in horseshoes and hand grenades.

The truth is passive investing’s virtuous positive momentum manufacturing feedback loop isn’t a guarantee.

What passive investors aren’t seeing, because they aren’t looking through or behind the mad rush into what looks like a better mouse trap, is that more money flowing into index funds increases systemic risks inherent in the investment.

We’re still entirely unelectable. But facts shouldn’t stop a bad politician from at least pretending like he has a shot.

We’ve got a mess on our hands. But we’ve also got a simple message for investors.

As we start a new week – another week with the nation locked in its homes – we worry about a lesser-understood evil.