Are Index Funds High Risk Products?

We continue to be amazed by the bubble in index funds where the prices of some securities have surpassed economic reality. So far in 2020 half of the S&P500’s return have come from just four stocks. An enormous amount of this is due to multiple expansion (they are just a lot more expensive today than they were a year ago)!

Every index fund holder will get a Holiday “Gift” on December 21st as the S&P500 adds one of the biggest and most controversial companies ever to the Index.

For more on this, see our Nifty-Fifty paper here.

 

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Sources

https://www.wsj.com/articles/tesla-to-enter-s-p-500-at-full-weight-in-december-11606780897?mod=searchresults_pos10&page=1

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Kailash Capital and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.