Index funds are much better than individual stocks. But Index fund price to earnings ratios still reflect their individual component stocks.
When the P/E ratio is 40, a rough way to read that is “it will take 40 years of stability for this purchase to pay off”.
Many people don’t have 40 working years left to wait for a stock purchase today to pay off.
And the supply of “years of stability” isn’t looking amazing, right now, either.
tempest@lemmy.ca 18 hours ago
They do, however a lot of people have known that for a while.
The large index funds have a lot of influence when it comes to voting.
As more and more people just invest in ETFs I do wonder if we are headed for some delightful market crash as a result.
I’m not even close to an expert though… Which is why I use index funds in the first place. Just wondering how I’m going to get screwed before it eventually happens.