V wrote:
> Is the stock market a mega Ponzi scheme built on the constant creation
> of new equity funds?
>
> When I look at the massive growth of equity funds over the last 15
> years I wonder how much of the stock market is pumped up by the
> creation of these fund buying stocks to outfit their ****tfolios.
>
> They say that 70% of the GDP is based on consumer spending. Without
> the constant creation of new funds to keep buying stocks, what would
> happen to the stock market?
John's reply is true, but I'll add this: Each year I have X dollars (say
$10,000) I wish to invest. An equity fund takes money that might go to
individual stocks and invests it in a ****tfolio of stocks, it's no
different once you have a thousand such investors, that $10M might be
spread out a bit differently, but the nature of the funds doesn't change
thing to the extent you suggest. The funds (along with ETFs) add
liquidity, which is good.
Joe
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