Hidden Dangers of the Great Index Fund Takeover

Re:Hidden Dangers of the Great Index Fund Takeover by Forge36 on Saturday January 18, 2020 @02:44PM (#22086594)

Having spoken with few people, the process is still mostly people, building algorithms in Excel. Much of what drives decisions is research, and personal decision's, not automation.

I've heard AI trading has done very poorly as the system isn't predictable, it's people making decisions in ways which can become self fulfilling prophesies.

Algorithms when distributed would also fall victim to the fastest person benefiting the most

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Re:Hidden Dangers of the Great Index Fund Takeover by biggestdecision on Saturday January 18, 2020 @03:05PM (#22086750)

An index fund isn't doing research or making decisions though.

They invest in companies that make up an index. When a company enters the index they buy units in that company, when a company leaves the index they sell those units.

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Re:Hidden Dangers of the Great Index Fund Takeover by dkarras on Saturday January 18, 2020 @02:57PM (#22086696)

But this is not supposedly true for index funds by definition. They are passive. They just buy whatever is in the index. No other decisions made.

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Re:Hidden Dangers of the Great Index Fund Takeover by echelon on Saturday January 18, 2020 @02:48PM (#22086627)

What sorts of things do you track and model in Excel? I've been looking at fundamentals and the business landscape. What should I add?

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Re:Hidden Dangers of the Great Index Fund Takeover by kqr on Sunday January 19, 2020 @02:34AM (#22090005)

> I've heard AI trading has done very poorly as the system isn't predictable

So have humans, which is one reason index funds exist.

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