Re:Why is the stock market rallying when the economy is so bad?
by quickthrowman on Wednesday May 13, 2020 @11:11AM
(#23167616)
> With Index funds, we all have to trust that S&P is doing the right thing.
No, you don’t. Here is the document that outlines how the S&P 500 is calculated: https://us.spindices.com/documents/methodologies/methodology...
> Managed versus index is to me, open source versus closed source.
This is also backwards, indices are transparent and open while managed funds are not.
With managed funds, you have lots of participants out there eyeing the value of businesses. Everybody can make a buck by taking a peek.
With Index funds, we all have to trust that S&P is doing the right thing.