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Your 401(k) is about to become Elon Musk's exit liquidity

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Re: Your 401(k) is about to become Elon Musk's exit liquidity

#11

Earlier quoted context omitted.

“Every index fund is different.” Say that to yourself over and over until it sinks in. Some funds were dumb ideas last year, and will be even dumber ideas next month. You can change which one you have. 50 years ago the S&P500 updated every 15 minutes, because it took that long to calculate. And that level was what it was 15 minutes ago. Would you be surprised that we can now calculate the level of very complicated in…

Profitability was an index rule removing it adds garbage to the portfolio

A long time ago, 500 was about the largest nice round number that could be calculated in a reasonable amount of time.

No longer. But it has an extremely valuable brand - did you know S&P has hundreds of indexes? Do any others readily come to mind?

It was originally supposed to be “close enough” to the entire market. We don’t need to do that anymore. But they want to, to milk that valuable brand. Profitability is an arbitrary rule for an antiquated index. Let it die.

Re: Your 401(k) is about to become Elon Musk's exit liquidity

#12

Earlier quoted context omitted.

Profitability was an index rule removing it adds garbage to the portfolio

A long time ago, 500 was about the largest nice round number that could be calculated in a reasonable amount of time. No longer. But it has an extremely valuable brand - did you know S&P has hundreds of indexes? Do any others readily come to mind? It was originally supposed to be “close enough” to the entire market. We don’t need to do that anymore. But they want to, to milk that valuable brand. Profitability is an a…

There are other s&p indexes. You can get total market index of you want. If you go too large you pick up companies that are too small you might as well pick the Russel or similar. The 500 is/was a good balance. Companies big enough to have government influence but not just the bloated top.
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