ilmscore | The Dark Side of Index Funds: What No One Tells You

The Dark Side of Index Funds: What No One Tells You

Predictions from this Video

Total: 9
Correct: 0
Incorrect: 0
Pending: 9
Unrated: 0
Prediction
Topic
Status
Passive index fund investing may be inflating the value of smaller companies, potentially creating market bubbles.
"these indexes are inflating the value of some of these smaller and lesser known companies because if it wasn't for these indexes you wouldn't be investing in them because you wouldn't have heard of them and this is why some people are saying that this passive Index Fund investing is creating bubbles"
Index Funds and Bubbles
Pending
A CEO is prioritizing getting their company included in new Wall Street funds focused on diversity, equity, and inclusion to boost stock value.
"he was leaving his company because a CEO has a new mission to grow the stock value of his company by getting this company included in some of the new funds on Wall Street which are focused on diversity equity and inclusion"
CEO Strategy for Stock Growth
Pending
The speaker's personal investment goal is to generate cash flow through dividends from funds.
"my investing goals they might be different than yours I have particular investing goals in that I like cash flow most of the funds that I'm investing in are for cash flow purposes meaning dividends"
Investment Strategy
Pending
To be a smart investor in funds, one should aim for long-term investment horizons (not just 6 months) to ride out market fluctuations.
"if you want to be a smart investor when it comes to these types of funds the goal is to be a long-term investor that means you're not investing for 6 months you're investing for the long term that way you can withstand Market crashes and Market booms"
Long-Term Investing
Pending
When investing in niche funds, consider their potential value in 5, 10, and 20 years.
"if you're investing in a niche fund you want to be thinking about is this something that you believe will have more value in 5 years 10 years and 20 years or will it have less value"
Niche Fund Investment Horizon
Pending
All funds have an expense ratio, a fee automatically deducted, which impacts investment returns.
"if you have a 401k you're paying fees on it it's called an expense ratio every single fund is going to cost an expense ratio and it's money that's automatically going to be taken out"
Fee Impact on Returns
Pending
A 0.04% fee results in $5.25 million after 4 years of $11k/month investment with 10% annual return. A 0.095% fee drops it to $5.17 million. A 0.72% mutual fund fee results in $4.37 million, highlighting the significant impact of higher fees on long-term returns.
"if we assume that for all three of these you are going to invest $11,000 a month for the next 4 years and you can average a 10% return well after paying a 0.04% fee with this index phone right here you would end up with $5.25 million if that fee got bumped up to 0.095 well now your total return is going to drop to $ 5.17 million but if you invested your money into a mutual fund where you're paying 0.72% in fees well now your total return has dropped down to 4.37 million"
Expense Ratio Comparison
Pending
True wealth building with funds comes from establishing a passive, 'set it and forget it' system with consistent investments into a strong fund over decades.
"the way that you really build wealth here is you create a passive investing system a set it and invested system where you find a strong fund that's going to continue to produce value over the next number of decades and then you invest some money into this fund every week or every two weeks or every month but to do a set it and forget it system"
Wealth Building with Funds
Pending
During market pullbacks and crashes, when others panic and sell, it's the time to continue investing, even more aggressively, into strong funds.
"even when you see a market turn down a market pullback you keep investing because that's when people panic they freak out they see their their funds get cut in half they see the markets get cut in half and they they panic and that's where most people are selling but that's the time where you don't want to stop buying in fact that's the time you want to be buying even more aggressively assuming you're investing your money into a strong fund"
Investing During Market Downturns
Pending