Someone once asked me, “is there a downside to index funds?” – yes, but it might not be the obvious answer:
The New Money Trust: How Large Money Managers Control Our Economy and What We Can Do About It [American Economic Liberties Project] – “In 2018, the late Vanguard founder Jack Bogle sounded an alarm about the risk that “a handful of giant institutional investors will one day hold voting control of virtually every large U.S. corporation. He said that the impact of this “growing dominance” on financial markets, corporate governance, and regulation will be “major issues in the coming era.””
The article is long and meaty, I scanned through most of it, but I enjoyed the slightly deeper dive into the impact of Covid on various funds. The shock of the crisis forced many “passive” funds to take action as a result of redemptions and price mismatches. (also the Federal Reserve stepped in)
The article goes into the risks of index funds after the section titled “Investment Funds and Risks to Financial Stability.”
Explore Or Exploit? How To Choose New Opportunities [Farnam Street] – “One big challenge we all face in life is knowing when to explore new opportunities, and when to double down on existing ones. Explore vs exploit algorithms – and poetry – teach us that it’s vital to consider how much time we have, how we can best avoid regrets, and what we can learn from failures. [..] One of the most important factors in determining whether to continue exploring or to exploit what you’ve got is time. Christian and Griffiths explain that ‘seizing a day and seizing a lifetime are two entirely different endeavors. . . . When balancing favorite experiences and new ones, nothing matters as much as the interval over which we plan to enjoy them.'”