EXPOSED: America's Brutal Index Fund Problem

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EXPOSED: America’s Brutal Index Fund Problem
Felix & Friends (Goat Academy)

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The content in this video is for informational and educational purposes only. It does not constitute and should not be construed as financial or investment advice or an offer to purchase or sell securities. The content is not personalized or tailored to a specific person or group of persons, nor to their personal investment or financial needs. You should consult a financial adviser or other investment professional authorized to provide investment advice. Investing comes with risks, including the risk of loss. Presentations of trades made by Felix Prehn or Goat Academy Ltd or its personnel are not a guarantee that any investment decision made by a student will be successful. Past performance is not a guarantee of future performance.


Timestamps:
00:00 Intro
00:39 Concentration Precedent: Dot-Com Crash Wiped Out 49%
02:07 Three Biggest Risks Hiding in Index Funds
03:34 Current Concentration: Magnificent Seven (7 stocks) = 37% of Market
04:42 Historical Comparison: Concentration Doubled Since 2000
05:42 Mechanism: Market Cap Weighting Loop
06:40 The Mechanism Works in Both Directions (Up and Down)
07:02 Preview in 2022: Magnificent Seven Lost 41%; S&P Lost 20%
09:19 Hidden Ownership: BlackRock, Vanguard, State Street
09:39 These Three Firms Manage Over $20 Trillion in Assets
09:56 Ownership: Top Three Shareholders in 100% of S&P 500 Companies
11:01 Department of Justice Antitrust Concerns (Texas vs. BlackRock)
11:56 DOJ Quote on Institutional Asset Managers and Anti-Competitive Behavior
13:18 Loss of Voting Rights and Regulatory Risk
14:02 The Critical Issue: Loss of Price Discovery
15:17 Passive Investing is Now 51% of All Fund Assets (Was 19% in 2010)
16:21 Result: Stocks Are More Correlated Than Ever
17:08 Why Diversification Fails: All Stocks Move Together
17:23 Danger: Passive Flows Amplify Volatility During Crises
18:44 51% of Fund Assets Trying to Exit Simultaneously
19:08 The Loop: Panic Selling Leads to Forced Selling
22:00 Action Step 1: Check Your Concentration (Alternative: Equal Weight Funds)
22:43 Action Step 2: Diversify Beyond U.S. Large Caps (Risks Discussed)
23:54 Action Step 3: Don't Panic (Be Aware of Risks)
24:05 Action Step 4: Learn to Pick Individual Non-Index Stocks
24:55 Summary: Concentration Risk is Real and Double 2000 Levels
25:30 Outro

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Recommend 9:56 to 16:21 The essence of concentration in investing and power by the biggest investment companies.