Market Factors: Index investing might be riskier than it looks

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Plus, consumer trends don’t look promising

Secret meetings in the snack sector, new research suggesting risks for index investors, the struggling global consumer and a look ahead to two important economic data points are all covered in today’s edition.A Chinese investor uses his smartphone as he monitors stock prices at a brokerage house in Beijing, There is no credible financial study that disproves the idea that passive, broad index-based investing is the best market strategy for the vast majority of investors.

In case I need to restate this: No one can consistently pick market tops, so I am not arguing that disaster is imminent. More volatility, on the other hand, would not be a big surprise. The longer the percentage of assets in passive portfolios climbs, the more likely we are to find out the risks.FILE PHOTO: A bartender takes a bottle of Johnnie Walker whisky at Barmaglot bar in Almaty, Kazakhstan, June 22, 2017. REUTERS/Shamil Zhumatov/File PhotoThere are reasons to be concerned about the U.S. and global consumer. Wells Fargo analyst Christopher Harvey collected downbeat management comments from a number of consumer-focused companies, including McDonalds Corp., Nike Inc.

 

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