Read the Beforeitsnews.com story here. Advertise at Before It's News here.

By CoyotePrime (Reporter)
Contributor profile | More stories

Story Views
Now:
Last hour:
Last 24 hours:
Total:

Economic Market Snapshot 3/1/19

Friday, March 1, 2019 16:17

% of readers think this story is Fact. Add your two cents.

•

Gregory Mannarino, “Post Market Wrap Up 3/1/19”

- https://www.traderschoice.net/

•

MarketWatch Market Summary

- https://www.marketwatch.com/tools/marketsummary

•

CNN Market Data:

- http://money.cnn.com/data/markets/

CNN Fear And Greed Index:

- http://money.cnn.com/data/fear-and-greed/

•

“Investing Insight:

Don’t Get Trapped At The Gates Of The Bear Market”

By Dan Denning

“When Vanguard Group founder Jack Bogle died at age 89 in January, Warren Buffett said that Bogle had “done more for the American investor than any man in the country.” With over $5 trillion in assets under management, Vanguard (which Bogle founded in 1974) charges an average expense ratio on its family of funds of just 0.11%. The industry average is 0.62%. And American investors are $1 trillion richer thanks to Bogle, according to numbers calculated by Bloomberg’s Eric Balchunas.

How? Two ways… First, lower fees allow investors to generate higher returns over the long term, by having more capital invested in the markets while paying less for performance. Second, by seeking “beta” (average market returns) over “alpha” (above-average market returns), investors get better performance. Bogle created an investment vehicle that passively tracked the market, discouraged trading (due to taxes and transactions costs), and took full advantage of the compounding power of the stock market. In other words, Bogle is the man chiefly responsible for the massive trend toward passive, index-tracking funds we see today.

If you’re having your doubts that the fake-money system is rigged… that gold is real money… and that we’re headed for the mother of all crashes (in which civilization itself has its knees buckled), then the simplest thing to do is to unsubscribe to the Diary today and shift most – if not all – of your money into an S&P 500 index-tracker. Then, let time, the stock market, and compounding interest do the rest. Our publisher will probably cringe to read that. But if Bogle is right, why would you do anything differently? It’s not a trick question.

But my suspicion is that history will not be kind to Vanguard’s passive strategy after the next crash. Here’s the problem: The concentration of investor capital in the same big stocks virtually guarantees that the next mean-reverting crash in markets will be swift and severe. Why?

Passive, index-tracking investing strategies value liquidity over everything else. In the pursuit of low fees and beta, passive strategies favor big-cap stocks, regardless of how expensive they are. This “bias to bigness” only concentrates more of the public’s money in mega-cap companies, which deprives small- and medium-sized businesses of capital. Now, Bloomberg reports that nine out of the 10 largest funds (by asset value) are index-tracking or passively managed (see below).

Bogle was right that lower management fees and expenses give investors better performance over time, all other things being equal (and bullish). And in a bull market like the one Vanguard has been able to enjoy for most of its existence, buying and holding the market saves you both time and money. But what if the whole trend to passive index-tracking has done nothing more than encourage laziness? Investing is hard… or, at least, it used to be. It’s not supposed to be easy.

In a Fed-backed, Bogle bull market, you have all these people owning the same narrow range of big-cap stocks – who will get their faces ripped off in a correction or crash. Bogle won’t be so popular then.

Let me be clear: I’m not bashing Bogle as a person or as an investor. It would be astoundingly arrogant and ungracious for me to do so. The relevant issue here is the titanic shift in assets under management from the active stock pickers seeking alpha to the low-cost, passively managed index-trackers seeking beta.

Remember normalcy bias? And let’s not forget recency bias, either… Don’t be lulled into thinking that, just because a market crash hasn’t happened yet (or hasn’t happened recently), it can’t happen at all. The Fed has created abnormal market conditions which will make the next crash worse. So hats off to Bogle for a great financial innovation. But don’t let it trap you at the gates of the next bear market.”

- https://bonnerandpartners.com/

Source: http://coyoteprime-runningcauseicantfly.blogspot.com/2019/03/economic-market-snapshot-3119.html

Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Please Help Support BeforeitsNews by trying our Natural Health Products below!

Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST

Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!

HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation.

Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.

MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)

Oxy Powder - Natural Colon Cleanser! Cleans out toxic buildup with oxygen!

Nascent Iodine - Promotes detoxification, mental focus and thyroid health.

Smart Meter Cover - Reduces Smart Meter radiation by 96%! (See Video).

Comments

Online:
Visits:	1,605,711,833
Stories:	8,138,082