Wealth Management, Corporate Finance, Strategy Consulting | ex-BCG | Member of several Investments Committees | LinkedIn Top Voice
Many thanks to EU Business School for hosting me today to discuss the many dangers of passive investing and the changes it is causing on market behavior in terms of excessive concentration, pricing inefficiency and capital misallocation, jeopardizing diversification, making investors valuation agnostic, weakening market discipline, and leading to anticompetitive outcomes, among others. Investors continue underrating the threats involved while passive investing already exceeds 50% of the AuMs in both mutual funds and ETFs. Over the coming years, unfortunately the system will self-correct in a violent manner, but till then, an increasing proportion of investors have unknowingly become "HODLers of equities" blatantly ignoring the risks involved. #passiveinvesting #marketbehavior #price_vs_valuation
Joan Sol
9mo
I passively invested in Natra a few years ago based on the recommendation of a great advisor and worked very well!
N H.
9mo
They have invited the right guy, to discuss those topics Carles. Hope it was a fun day. 😀 👍
Carles!!! Tu en mi uni 👏🏻👏🏻👏🏻
John Rhodes
9mo
It needs to be said, Carles Iborra: By trying to save passive 401k investors as it did, the Fed has turned the whole economy upside down. If people ... would have been diversifying in their retirement approach all along -- this, to include corporations continuing to set up pension plans instead of putting all the responsibility of planning for retirement on their workers by not offering such plans, which just pushed workers toward the 401k -- Wall Street could have taken a hit (such as that Covid started to create) without the Federal Reserve thinking it needed to "save the economy" by creating circumstances that inverted bond yield curve, which just adds another nail in the coffin for pensions ! The nation has never had such a poor, unwise, risky investment schematic. Such a bad situation. And it reminds me of how corporations & small business dealt with another problem. Faced with the spiraling costs associated with providing health insurance for employees, more & more of the costs are put on the shoulders of the employee. With exception of the financial institutions managing 401ks & companies freed from the healthcare nightmare, the whole situation only makes everything more & more costly for the rest of society.
Economics | Finance | Accounting
9moCarles Iborra shared his take on a very relevant topic and made multiple valid points as to why and how passive investing can not only influence the stock market negatively but also affect greater global economic issues. The presentation perfectly pointed out the threats that passive investing poses to the future, even though there seems to be no slowing down of inflows and as he accurately stated, investors have gradually adopted the “it is not important, until it is” mentality, given the recent positive performance of the market. Overall, it was an amazing opportunity to enjoy a brilliant presentation that provided much food for thought. Many thanks!