저자: Jasper · 외국인
요약 보기
인덱스 펀드 투자 열풍이 거품일 수 있다는 우려를 소개. 상위 7개 종목(애플·MS·아마존·알파벳·엔비디아·메타·테슬라)에 지수 비중이 쏠리고, S&P500 PER 약 29배로 역사적 평균(약 20배)보다 높다는 점 등 네 가지 우려를 정리. 다만 시장 폭락은 주기적으로 발생하므로 꾸준히 매수(ABB)하고 패닉 매도 시 생기는 기회(POOP)를 활용하라는 것이 결론. 개별 투자 조언이 아니라고 명시.
다듬은 글
Investing in index funds has become the gold standard of investing with trillions of dollars pouring into them. But now some investors are saying that this is building a bubble. Like Market Watch says that investing in the S&P 500 fund might be more risky than the internet bubble. And even Michael Bur says beware of investing in index funds because it's a bubble that's going to burst.
That's why in this video I want to break down what's actually going on. That way you could be a more educated investor. And then I'm going to go over what this means for you. So, make sure you stick with me until the end of this video. A fund is when you're investing into a basket of stocks. So, whether it's an index fund, a mutual fund, an ETF, they all work kind of the same way like this, where you could go out and invest in the McDonald's stock.
If you go onto whatever stock brokerage you're using and you enter in this ticker symbol, MCD, you can buy one share of the McDonald's Corporation. Or if we didn't want to buy just one stock, you can buy a fund that gives the exposure to tens of stocks, hundreds of stocks, maybe even thousands of stocks, which could include stocks like McDonald's, and it can include Apple, and it can include Google, and it [clears throat] can include many, many other companies.
And there are funds for pretty much everything, right? There are funds that give you exposure to the S&P 500, the 500 largest companies in the stock market. There are funds that give you exposure to tech stocks. There are funds that give you exposure to real estate stocks and healthcare stocks and international stocks.
So, let's talk about the four reasons why some investors are saying this is a big problem and then I'll go over if this is actually a problem for you. Concern number one is the concentration of money. So, we just talked about the S&P 500. Well, these seven companies in the S&P 500, Apple, Microsoft, Amazon, Alphabet, Nvidia, Meta, and Tesla.
These seven companies make up by weight approximately 33% of the S&P 500 and these other 493 companies make up the other 2/3 of the S&P 500. In fact, Nvidia by itself makes up about 7% of the entire S&P 500. So, this is where some investors have concerns that all this money in the S&P 500 isn't into these 500 companies equally.
It's really just into these seven companies. Now, at this point, you're probably going to say, "Well, why does this even matter, Jasper? The reason why it matters is because it creates a passive feedback loop. So, when you go and invest your money into the S&P 500, where is that money going?" Well, most of the money is going here.
And now we have to think about supply and demand. And if we have more buyers of certain stocks of these seven stocks, what happens to those companies? The stock price goes up. That's good for you. But if the stock price keeps going up, it has to see better earnings to justify these higher stock prices.
So now expectations keep going up for these companies as well because well, they better keep producing big results and big growth to justify these high stock prices and high valuations. And so if the stock price keeps going up quickly and expectations keep rising, the concern is what happens if we hit a breaking point where these companies don't hit expectations?
Maybe they're not growing as fast. If that happens and one or multiple of these companies start to go down, that's going to be a problem because these companies have so much weight in our economy, the stock market, and these index funds because if Nvidia says, "Oh my god, we lost some money or we did worse than we thought." That could bring down the entire stock market.
The second concern is that people are price insensitive. Now, I do want to remind you that if you are an investor or want to become an investor, my team and I have put together a free investing master class where I walk you through how you can get started as an investor and find hidden investment opportunities before everybody else.
I'll even show you the exact framework that my firm and I use to research investment opportunities before they hit the headlines. There's a ton of value in the master class. And when you register for it, you're also going to get access to market briefs, which is my newsletter for investors, completely free.
So, if you want to get the investing master class and market briefs all for free, all you have to do is register and I have that link for you down in the description below. So, the second concern of being price insensitive has to do with how investors think. If you're going to go and invest in, let's just say, the Apple stock, what you're going to do is you're going to say, hm, is this share price of Apple expensive or undervalued?
And you would want to study the financials and see, hm, is it worth me to buy shares of the Apple stock at this price or not? Well, when you are a passive investor, you don't have that question. You just put your money into the S&P 500 fund or whatever funds that you're going to invest in and you don't care about the actual valuation.
And this is where some investors are saying, "Hey, the market is overvalued." Right now, the S&P 500 is trading at around 29 times earnings, 29 times PE ratio. What that means is that on average, if a company has $1 of profit, the company is going to grow its value by $29. So if you start a company, it makes $1,000 of profit.
Take the $1,000, multiply it by 29. That means your company's worth $29,000 for every $1,000 of profit that you have. Is that good or bad? Well, historically, the average PE ratio for the S&P 500 has been closer to 20 times. And this is where some investors are saying, "Hey, the markets are overvalued.
People keep buying stocks because they don't understand what they're buying. They don't care about the price." That's a concern when people are dumping money into things when it's overvalued. Not to mention the fact that Warren Buffett's firm that he retired from, Berkshire Hathaway, is sitting on the largest cash pile in history because they're waiting on good opportunities that are a little bit more affordable.
The third concern that some investors are pointing out is that people who are putting their money into these funds are asset insensitive. Meaning, if you're investing in the S&P 500, you understand these seven companies, but not these other 493 companies. For example, stock number 498 is the Mosaic company and stock 499 is Matchgroup Inc.
Well, when you're investing in the S&P 500, you were investing in the Matchgroup Inc., whether you know them, like them, or not. And this is where some investors are saying this asset insensitivity is what's boosting the valuation of these lesserk known companies that would otherwise not be getting this funding because if they were not in the S&P 500, they wouldn't be receiving these investment dollars.
The stock price wouldn't be as high because other investors would have never even heard of that company before. And reason number four is a lack of experience. What do you think the average person does when markets are booming? And to follow up, what do you think the average person does when markets are crashing?
And over the last 25 years, we've seen a lot of volatility in the stock market. In 2022, the stock market fell by 20%. In 2020, when the pandemic hit, the stock market fell by more than 30%. During the 2008 crash, the stock market got cut in half. And in the 2000.com bubble bursting, some stocks were just decimated.
What do you think happened? Many times during those downturns, the average investor who didn't know what they were doing, who didn't have the experience, they sold when things were down. and then they bought when things were booming and everything was high. You buy high, sell low. Well, that's not how it works.
But take a look at this chart. Even if you were the worst investor in history and you bought at the peak in 2022, you bought at the peak during 2020, you bought at the peak during 2008, you bought at the peak of 2000, you would still be wealthier today, assuming that you didn't sell. So, now that you understand the concerns that investors have brought up, let's talk about what this actually means for you.
And this is coming as a random guy on YouTube who cannot give you financial advice because, well, investing is risky. You're never guaranteed to make money when you invest. In fact, you will lose money at some point. So, make sure you always do your own due diligence and never blindly trust a random guy on YouTube.
Here's the reality. We know this. Number one, investing is how you build wealth. Number two, you have to figure out where you're going to invest. So, if you're not going to passively invest your money into these funds, what are the alternatives? The alternatives are you could be an active investor, which is a great option.
Active investing is where you're going to invest your money into individual companies, but it's going to take more time, effort, research, and well, more risk for more potential return. I recommend everybody have at least some active investments in their portfolio. Maybe it doesn't have to be your entire portfolio, but hey, it's fun and you can get better returns and it can teach you about the markets.
I'm not talking about trading. I'm talking about doing the research of individual companies. If you don't do active investing, well then we can talk about alternative investments. Where else are you going to invest? Real estate. You're going to invest your money into cryptocurrency, which is even more volatile.
You're going to invest your money into startups, which is extremely risky. You're going to build your own business, which is a lot of work. So, you have to understand the alternatives. And this is where we know markets always have a bubble. Recessions always happen. A market crash is always coming. How do I know?
Well, we can just take a look at history. In the last 100 years, we have seen 16 recessions. That means we are averaging more than one recession per decade. In the last 100 years, we have seen 25 market crashes. A market crash is defined as markets falling by 20% or more, which means we're averaging more than two market crashes per decade.
There's always a crash coming. There's always a bubble. There's always a recession coming. It's a part of our economic system. The problem isn't the bubble and the market crash. The problem is people don't have the experience or the education. We get emotional. We always think, "Oh my god, this crash is different.
This recession is different." And there might be some slight differences, but we know the cycle because we can look at how history has played out again and again and again. During the 2020 pandemic, people said, "This time is different. We've never seen a pandemic like this before. We've never seen the economy shut down like this before.
This is the end of our financial system. During the 2008 great financial crisis, people said the same thing. We've never seen a housing market crash like this before. We've never seen banks and institutions crash like this before. We've never seen it almost collapse of our entire financial system like this before.
We're in the 2000.com bubble bursting. We said the same thing. We've never seen an entire industry, the dot industry ultimately just collapse the way that it did. Yeah. What do we see happen time and time again? Markets crashed. People that panic and sold good investments lost a lot of money. The people that bought these good investments when they were on sale, when everybody was panicking were able to come in and buy them at a great price.
And so even if you bought them at the peak, if you just held on, assuming they were good assets, well, you're able to build wealth. And the advantage of having a fund as opposed to an individual company is if you invest in a company that went bankrupt, you lost everything. But if you're investing in a fund that's giving you broad exposure into the markets, well, when markets go up, you also benefit as well.
But you have to have the patience and the education or experience to know not to sell when people are panicking. And that can be difficult. And this is where there are two things that I want you to know. Number one, the strategy that I teach when it comes to investing your money as a passive investor, it's very simple.
Passive investing is a very simple concept. You just follow a simple system that I call a b beep. Always be buying. If you're investing the S&P 500 into the Dow Jones into the NASDAQ, this is the way that you win. Always be buying. You buy every week, every two weeks, every month. Doesn't matter who's in the White House.
Doesn't matter if it's a Republican or Democrat. Doesn't matter if it's snowing or raining or sunny. Doesn't matter if you have a cat or dog. Doesn't matter if you like guacamole or not. ABB. Always be buying. That's the way that you win. When markets crash, you're buying. Markets are booming, you're buying.
markets are sideways, you're buying. The A is always be buying because the way that you win now is you do this for decades and you're going to be able to build wealth because you're going to withstand the up and the downs. But there's another thing that I want you to know and this is what's going to allow you to grow your wealth even faster.
And the thing that you have to understand is how poop works because most people unfortunately don't understand poop. Poop stands for panic, leads to overselling, leads to opportunity, leads to profit. Poop happens in every downturn. During the 2020 downturn, poop happened. Panic led to overselling. People were freaking out when the markets were closing, when the economy was closing.
And that overselling led to opportunity to buy good stocks and investments and funds at a discounted price, which led to the opportunity for profit for the people that were patient. During the 2008 great financial crisis, people panicked. People were selling off of every asset that they had. They thought the entire financial system was going to implode which created overselling which led to opportunity for good investors to come in buy real estate at 50 60 sometimes even 90ome% off even stocks were selling at huge discounts which led to the opportunity for profit were the people that held on and were patient during the 2000.com bubble bursting that panic led to overselling because people said that the internet was just a fed and no one's going to ever use the internet again and markets were collapsing which created an opportunity I The tech side of the stock market, the NASDAQ fell by more than 75%.
The Amazon stock fell by more than 90%. It created an opportunity for people to come in and buy and profit if you were patient. So, you got to understand that poop happens. And when you understand ABB and poop together, now you have a deadly combination because now you understand how you can build wealth over the long term as a passive investor.
And when those downturns happen, you can come in and grow your wealth even faster. Whether you're a passive investor or active investor, again, if you want to boost your knowledge on how you can actually research investments and be a smarter active investor, I have my free investing master class. We'll walk you through how you can do that research and find that data to make smarter investing decisions.
It's free. I have the link for you down in the description. But once you understand these two things, now you can cut through the noise because there's a lot of emotion and fuel out there. And yeah, we probably have an index fund bubble. We are probably have an AI bubble. We probably have a recession coming.
We probably have a market crash coming. All these things are happening, but nobody knows when the bubble's going to burst. And so instead of freaking out about it now, you can understand how you can ride the wave and then when the bubble bursts, how you can use it as an opportunity because you're going to be prepared for it.
And now, while everybody else is freaking out, you're the one that's quietly buying up good investments at a discounted price. You stay patient and calm because we don't know how long it's going to take to recover. You just keep buying. And then when things recover, well, now you're on the other side of that coin where now you have built your wealth through the recession instead of being the person that's seeing their wealth get slashed in half or worse because you're panicking.
So, are we in an index fund bubble? Maybe. These are the four reasons why people say that we are. It's because the concentration of money is into these seven stocks, especially in the S&P 500. It's because there's this price insensitivity where people are buying shares of companies without really caring about the valuation of them because they're just throwing the money into these funds.
It's because there's people that are asset insensitive. They don't know what actual stocks they're buying when they invest in the S&P 500 or really any fund out there. It's because people have a lack of experience that when markets go down, they panic and they sell. And if people panic and sell, they're selling out of these seven stocks plus these 493 other stocks which can trigger a big sell-off in the markets.
And sure, all of that is true, but that doesn't negate the fact that there's a lot of opportunity in the markets as well. And so, if you are an index fund investor, what do you do? Well, you got to remember AB, you got to remember poop. And remember, these downturns are part of our economic system, and they create opportunities for you to build your wealth even faster when you understand how to use them.
Now, if you got value out of this video, the best thank you is a referral. So, if you could please share this video with a friend, family member, colleague, or fellow investor so we can continue to spread this type of financial education. And now, check out this outro music we just put together. The majority of Americans are living paycheck to paycheck with little to no investments and drowning in debt.
And things are not going to magically get easier next year. But in the middle of all this chaos is opportunity. That opportunity is ability for you to grow your wealth even faster, assuming you don't fall into these 10 money traps that I'm going to show you in this video. So please watch this video until the
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