Are you losing your sense of place in America? Specifically, are you in touch with how you’re investing and not simply on autopilot? Because what we’re seeing with firms like BlackRock, State Street, and Vanguard (collectively managing $23 trillion), is their views are being voted with other people’s money. You, the investor, are the one with some skin in the game. Shouldn’t you be heard and not looked upon as a tool for their politics? I think so.
When it comes to index investing, which used to be a passive endeavor, it’s a long way from where it started. Even the Total Stock Market Index is loaded with the big names in the S&P 500. And the kicker is the owners of the fund companies and managers—not you—get to vote your shares. This is not a hands-off passive approach, which we’ve been led to believe is the nature of indexing. No, it gives incredible power to leadership. Once intended to be passive, that is hardly what it has become.
And the overlap between the index funds and target date funds, to name a few, is massive. Not to mention mega-cap mutual funds and ETFs that own the same stuff, too. It’s a lot of money in the same boat. The sheer size of these funds makes it impossible to not own the largest publicly traded companies. Is that diversification?
Action Line: When you own a carefully crafted portfolio of selected companies, there’s a certain satisfaction. You know what you own, and you vote your shares. You make your own path. With so much at stake, it’s too important to simply go along with the masses. When you’re ready to talk about building a portfolio like that, let’s talk.
Originally posted on Your Survival Guy.
