Row 5758

Row ID: 5758 | Dataset Entry | Axioma AXP Content Repository

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This page contains data entry 5758 from the Axioma AXP content repository. The structured data below represents the complete record for this entry.

More money is now in passive funds than active funds. Passive money doesn't care about valuations, it just blindly flows into the stock market based on existing company market caps.

Every two weeks, billions of dollars in retirement contributions flows into passive index funds. There's an ever greater supply of money flowing into passive instruments year by year and it doesn't care one bit about, say, NVDA being overvalued, it's going to buy NVDA based on it's current market cap relative to the rest of the market.

Moreover, the stock market is essentially a federally protected asset. Most Americans are relying on their portfolios to fund their retirement and so there's a case to be made that the federal government would always step in to avert a catastrophic crash. We could see future 50% crashes but at that point the government would step in and support the market somehow.

In such an environment, are metrics like CAPE ratios and P/E ratios still useful?

FieldValue
text More money is now in passive funds than active funds. Passive money doesn't care about valuations, it just blindly flows into the stock market based on existing company market caps. Every two weeks, billions of dollars in retirement contributions flows into passive index funds. There's an ever greater supply of money flowing into passive instruments year by year and it doesn't care one bit about, say, NVDA being overvalued, it's going to buy NVDA based on it's current market cap relative to the…
label r/investing
dataType post
communityName r/investing
datetime 2024-05-03
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url_encoded Z0FBQUFBQm5Lak9HQU9FVUMzYjBJc0FmNG55Z1VJU3RUMWhfa0lqVkdzSWtzX2dUUk1sb2dDdS1ETnZsSWx1d3J5VEpJN3hacTh2amRieTV3eE1Oa1JCWkRtejJydlhRUDVFSWVfbFhxRG1DOENNQkZfbUtuSUpHRkxWTk93S0NhVkVLeVBLTlFnY1dGOUR0cnZVTVlseWNScDE1V2lHYjFpVHFYOFRkcTFXX1huMzJvWlhOYmR1dUN1dlNxSFhOclMyLUJXcUNGUDRnNDJfNmRDWUdaVTZ0QlVOZmFGNlBTZz09

Raw Record

{
  "text": "More money is now in passive funds than active funds. Passive money doesn't care about valuations, it just blindly flows into the stock market based on existing company market caps.\n\nEvery two weeks, billions of dollars in retirement contributions flows into passive index funds. There's an ever greater supply of money flowing into passive instruments year by year and it doesn't care one bit about, say, NVDA being overvalued, it's going to buy NVDA based on it's current market cap relative to the rest of the market.\n\nMoreover, the stock market is essentially a federally protected asset. Most Americans are relying on their portfolios to fund their retirement and so there's a case to be made that the federal government would always step in to avert a catastrophic crash. We could see future 50% crashes but at that point the government would step in and support the market somehow.\n\nIn such an environment, are metrics like CAPE ratios and P/E ratios still useful?",
  "label": "r/investing",
  "dataType": "post",
  "communityName": "r/investing",
  "datetime": "2024-05-03",
  "username_encoded": "Z0FBQUFBQm5LakwyUmU1TWZTMllxWC1WYkRlOEpjbVlfYlB4dmhwTXMwcGFBenp6ZFNoQUltWU5YT2lUbW5aVU15NVM4OEFLc0dxVFhYSncwcnZWMkg2OTVBY3pOemU1a2c9PQ==",
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}
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