alt Hacker NewsThere’s plenty of argument about how if a company has an IPO then they are, by definition, part of the market. And if you bought an index fund that means to represent a part of the market that this company is in, then that company should be in the index fund.
You had lots of choices, you made this choice, and you can always change your mind. Do we really need to have the government step in to prevent you from having to choose something else?
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Yes. There are too many people entire retirements on the line to hide behind the usual song and dance people do around this. What's the alternative. Let them proceed, the bubble burst, tank the market, then have the poorest and least equipped people to manage a recession just suffer? This is exactly what a government for the people could do. Or we could just keep letting rich assholes destroy everything with no consequences.
> There’s plenty of argument about how if a company has an IPO then they are, by definition, part of the market
By portfolio theory, all assets are part of the market. Public and private. The challenge is rebalancing cost, which is driven by transaction costs. Having a tiny percent of every single asset rebalanced every second is great in theory, since you'll be diversified across the market as a whole, but you'll also lose all your money to fees.
This is why the S&P 500 exists. It's a limited number of names that are very liquid, i.e. transactable at scale at reasonable cost. As trading fees went down we saw larger and larger indices.