>Similarly, thanks to recent efforts by the Trump administration, the $15 trillion held in private sector workers’ retirement accounts is now, for the first time in history, available to be invested in private funds.

The argument is that retirement savings are being invested in different ways than before.

there is an argument to be made that investors with long investment horizons and predictable flows aka insurance companies and retirement funds are exactly the ones who should be taking risky long term bets instead of looking to next quarter

Or perhaps not. You don't want to retire at a moment when the retirement fund is down 20% and decides to pay no interest on your savings for the next 10 years. Or not pay you at all.

It doesn't really matter. 20% down from peak after 30 years of growth is going to be far over your book value.

The Dotcom Bubble isn't coming back for 20%. It's coming back for everything.

Isn't this precisely what target date funds are for?

they don't solve anything, because the market can still be down at the moment when they move your wealth to a less variable market.

There is, but the presumption in that argument is that those risky bets bring higher returns. If that assumption is invalid, the argument falls apart. (I'm not especially confident myself that private credit can actually bring higher returns over a long time horizon.)

I swear to god, people use "high risk bet" as synonym for "sure gain with no danger". You see it on HN all the time.

The defining thing about "high risk" is that risk part will happen and that creates a lot of loosers. That is the whole point!

But HN treats "high risk" as something that is expected to always give you reward.

russian roulette?

Its high risk no gain game. Kind of opposite.

All I'm getting at is that EV matters. Putting a bunch of chips on the roulette table has high risk, but negative EV -- it's a terrible investment. Loading up on risk is not inherently EV-positive.

Then again, when you look at the performance of your typical pension fund or university endowment, and then see the actual incentives of the people managing the money (as there's ultimately managers there looking for their personal best interests), then you see that said argument one could make is not exactly going to do well empirically.

The main reason we are seeing private equity now being offered in 401ks isn't that it's going to be great returns for your average mostly-self-directed worker, but because those managing private equity believe they will make more money if they managed more capital. There's no guarantee that they are making any choices there that provide good risk-adjusted returns. But the managers sure would be making more on fees.

No, these are who should make conservative slow raise, be sure not to crash bets. Cause when they crash, whole lot of people suffer.

They should impoverish their retirees by like 10x in order to avoid having a distribution of retirement results in the 8-12x range? Conservative investments lag even the worst-case equity investment result over any significant, retirement-relevant time range.

High risk investment by normal pension fund is still super conservative compared to risk traders.

The language the author uses there obfuscates rather than clarifies. 401(k) holders can choose to invest in private credit, but it is never going to be the default investment option, and they control that choice. (Unlike public employees, who typically have no control over how their pension savings are invested.)

I'd like to see some quantification for their statement. It's unclear to me how much has actually been invested in private funds. I think that pensions invest, (and that the economy is linked together) is a far more persuasive (note that neoclouds and the hyperscalers are all public as are some of the private credit firms and banks bankrolling the build out).

I second this, has anybody properly measured how much has actually been invested from private funds/pension funds? Is this really difficult to do?

There used to be proxy voting/corp gov firms that provided money managers guidance on their ERISA obligations for, say, OHSERS. I think participants just get fee info but it's been a while since I thought about this.

I think the answer is extremely little.

> the $15 trillion held in private sector workers’ retirement accounts is now, for the first time in history, available to be invested in private funds.

The article acts as if this means there are $15T of funds that Coreweave can tap into at will, but all this means is that 401k plan admins are allowed to add private equity to the list of options in 401ks. I expect quite a small percent of plan participants to actually make use of said options even IF they are added, unless plan admins start changing the default investments to include them. Not saying that can't happen, but it hasn't happened yet.

Specifically I believe the concern is public pension funds.

Your 401K is invested however you choose, but the people with pension plans don't get any input on how those are invested. They have historically been cesspools of fraud and shady deals.

You have the option of rearranging. your 401k investments where you can choose to invest in individual companies instead of the grab bag fund where the managers invest in a little bit, parceled out to many companies where they give equal weight to investing in Intel, Dell, Microsoft and Apple. Which is a horrible deal because Apple, for example, has outperform those three companies by a wide margin over the last 20 years.

Note: you have to go out of your way. to make this happen. Most funds prefer to dump everything together, so they don’t have to make individual tough decisions.

not all those 401ks offer the level of granularity you're espousing, i've been looking to divest certain holdings based on religious views and can't figure out how to blacklist certain companies directly.

I'm guessing this is worse due to the super high valuations of these companies? Mag7 make up like 1/3 of the S&P 500. Even if you buy a low cost index fund with the goal of diversification, your portfolio still includes a lot of this stuff.

Market neutral index fund investment can not be accurately described as fueling a bubble, though. You're neither bullish nor bearish on Mag7 in particular.

How does your first premise follow from the second? Yes, you're not bullish on these companies specifically, but you're effectively giving them (and some others) your money and inflating their valuations. You're bullish on the status quo and they're a large part of the status quo.

In fact, it's arguably worse than deliberately investing in them, because you're completely indifferent to the soundness of their business model. The hope is just that through the magic of "efficient markets", someone else will arbitrage your errors away... or something.

Being completely indifferent to the soundness of a publicly traded company's business model is the correct choice for most ordinary people trying to invest their retirement savings, because they have no basis for thinking any other choice of how to invest will result in superior returns. This is the entire line of thinking behind all passive index-fund-based stock investing.

And in the end you have a market where nobody has any basis for thinking anything has any value, and the market ends up being a random walk.

Nah. The more irrational it gets, the more margin available to active. There's always an incentive for active investors to participate in price discovery.

With massive concentration like this you are forced to be bullish, as your success is predicated on the bubble not bursting.

With broad index funds you’re merely following the average market sentiment. So you’re only bullish to the extent that the market as a whole is bullish on those stocks.

This discussion here is not about what you're betting on - it's about whether your bets are fueling a bubble. Which they are.

You are copying what active investors (in aggregate) are doing so if they’re fueling a bubble so are you.

> You are copying what active investors (in aggregate) are doing so if they’re fueling a bubble so are you.

The "in aggregate" is doing a lot of heavy lifting here. Active management holds concentrated positions in certain investments because they think they will outperform. Active folks believe they have found market inefficiencies, whereas passive folks lean towards the market being (relatively) efficient (enough) and chasing returns won't work (at least for most people):

* https://en.wikipedia.org/wiki/A_Random_Walk_Down_Wall_Street

"Active" and "passive" exist on a spectrum and are not binary:

* https://rationalreminder.ca/podcast/133

People passively invest because active investing rarely outperforms passive.

To be a little more precise, the version of active investing available to retail investors rarely outperforms. Some shops are very good, but they aren't taking retail money.

Not as clear cut as that. There is a delay before an index rebalances, indexes have tracking error that influences how closely they follow and 'passive funds' do active trading to snip deals on the market.

I forget the name of the yt channel, but they did an interesting interview with Vanguard reps. The reps said that active funds will often need to liquidate assets they will sell at a discount to an index fund directly that will buy it anyway. They don't want to sell to the public market as that would reduce the value of their assets still on the books. In this way a passive fund can take advantage of an active fund and is one of the reasons why many active funds struggle to beat a passive one year after year.

Value funds. If you buy stocks that make, like, actual profits, your exposure to AI "tech" is low.

Microsft, Google, Nvidia, and Facebook earn tons of money and fuel the bubble.

They all have tiny dividend yield.

Dividend yield doesn’t determine value.

Indeed! It's unclear how that is relevant to the discussion though.

Are there any mutual funds that track these types of companies?

Yes. https://investor.vanguard.com/investment-products/etfs/profi...

N.b. I wouldn’t recommend it for various reasons, but it exists.

And things that are not bubbles.

They want to make it sound like a bunch of older people on fixed incomes are getting scammed. "Retirement savings" to the post-war generation is often millions in securities, real estate, and other assets

For this one, they swith the rules, to fuel it even more.

https://www.reuters.com/legal/government/states-challenge-na...

https://www.washingtonpost.com/wp-intelligence/ai-tech-brief...

https://fortune.com/2026/06/04/spacex-anthropic-massive-ipo-...

All current wealth is built on looted pensions sunk into Wall Street (and hype/repetition so we believe it; since finance is merely a social construct):

https://www.nytimes.com/1981/05/18/business/reagan-cut-and-p...

Which generation of leadership did that benefit most? Trump and Co

Their only shtick is loot everyone else, save themselves; change the finance ratio so it all flows to them; see it with end of ZIRP, RAM and tech prices...

Americans still believing the oral traditions of The Dream despite decades of headlines about homeless vets being denied and endless "once in a lifetime" bubbles millennials have dealt with every 5-8 years since they became adults... fuckin gen pop dude... it's so clearly just wielding oral traditions on the part of the rich to serve their own biological imperative

The last bubble was funded by home equity, so no.

Unless you want to claim that all your assets eventually become retirement assets... but then it's vacuous.

no because not every bubble primarily involves companies that make up a large portion of the S&P500

presently the Mag 7 alone make up 33% of the S&P500 total market cap

in 2007, the _entire_ S&P Financials sector (banks, insurers like AIG, brokerages, real estate firms) was only about 22% of the S&P500; the top 10 banks (with Lehman at #10) only made up 9%.

the S&P500 is now a dangerously non-diversified asset but still used by retirement savings inventors as a diversified one

this reminds me of the South Korean tech stock bubble and crash, that crashed when the USA forbade pension funds from investing in the SK indices because they were 70% Samsung, or something like that