>If you’re a passive investor, you vote in line with the two proxy powerhouses.
As a passive investor in SWPPX, an S&P 500 index mutual fund from Charles Schwab, "my" Intel stock votes are whatever Charles Schwab deems appropriate.
As a passive investor in SWPPX, an S&P 500 index mutual fund from Charles Schwab, "my" Intel stock votes are whatever Charles Schwab deems appropriate.
In the immortal words of Warren Buffett and Jack Bogle respectively: "The stock market is a device for transferring money from the impatient to the patient." and "The daily machinations of the stock market are like a tale told by an idiot, full of sound and fury, signifying nothing."
You can either gamble and blame yourself or ride the market (invest in index funds) and excuse yourself from losses. If you're just interested in making some money using some disposable cash, it makes even more sense to just ride the market.
The US total stock market (ex-US stock market is a crapshoot) and its subset the S&P 500 index will generally do a better job than any bonds given a long enough timeframe, but that doesn't mean appropriate bonds can't do the job either.
TIPS won’t come close to making one be able to compete with other buyers in those markets for the non mass produced/imported resources.
If someone invested their money in TIPS over the last 30 or 40 years thinking they will be able to buy real estate because TIPS protected them from inflation, they would have been sorely disappointed for pretty much all non Midwest/interior northeast metros.
This is a demographic/political issue for all developed countries, they must reduce the purchasing power of their currency as a tax to be able to deliver the benefits expected by the more populous, older voting populace.
TIPS have been available less than 30 years.
Replace home price change (or land price change) with education price change or healthcare price change. Probably even trades’ worker price change.
If a nursing home cost $x per month in 1997, and you thought putting away an equivalent amount of cash in TIPS will ensure you can afford a nursing home in 2027 or 2037, it’s probably not going to be fun to find out how much they cost now.
It worked great if you wanted to ensure being able to buy electronics, other manufactured goods, and probably groceries. But those are beneficiaries of automation and foreign labor.
Claims that inflation adjusted bonds don't actually track (average) inflation need evidence.
3.6% annual return since Dec 2003. 1.036^20=2.0286.
Home prices have more than doubled since then, for a large portion of the US. Source for that is going to Zillow, searching a home in a major metro, and looking at price history.
Also, how did Blackrock get so wealthy so fast? They've only been around since 1988.
There was a comparison between Amundi (France based) and BlackRock, and their voting patterns, and BlackRock was consistently voting against any ESG or in any way ecology related proposals. Anything that isn't directly about making more money is just not their thing. Contrast that with Amundi who overwhelmingly voted for ESG or similar measures.
So an oligopoly that presents the illusion of free market?
It is not their money. They have roughly $11.5 trillion of assets under management, but their market cap is only $161.5b (on net income of about $6b). Compare that to xAI, which has existed for less than two years and has a valuation around $50b.
xAI has yet to actually move the market needle, other than getting venture capitalists to sign away money they would have done otherwise.
For a TDF (Target Date Fund), because that was brought up (Vanguard 2030): Both actively and passively managed ones must generally be managed such that shareholders can start withdrawing adequate funds (selling shares) upon and after reaching the "target date".
For an S&P 500 index fund like the one I mentioned and hold (SWPPX), the fund manager is required to imitate the actual S&P 500 index as much as reasonably possible.
In short, "don't have to care about long term success" is not a generally usable argument for fund management.
But the fund managers tracking an index are not the main problem, they are just putting a lot of passive votes behind the funds that are actively working on electing board members in the interest of short term growth/profit (which brings more people to invest in their funds and gets them big bonuses).
You have to sell before the “gains dry up”, otherwise you won’t have much money to invest in a new company to have enough of a voice to suck it dry.
But for an index fund, there is no fund manager choosing when and if to sell. The investors of the fund are just following the markets, not really earning a lot (in real terms), but also not losing much.