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Learning, Sharing, and Teaching => Investor Alley => Topic started by: Zikzin on March 19, 2017, 09:21:22 AM

Title: Anyone watched the Inside Job?
Post by: Zikzin on March 19, 2017, 09:21:22 AM

Watched it last night and I can't stop thinking about it especially knowing that these lobbyists are still in office.  I only have one question though:

Does this affect Vanguard or VTSAX at all?  I mean are some of these crappy funds mixed in with the good funds in these indexes? 

Title: Re: Anyone watched the Inside Job?
Post by: MustacheAndaHalf on March 20, 2017, 03:55:13 AM

I haven't seen "Inside Job" but wanted to correct one bit of terminology.  The S&P 500 index fund holds ~510 stocks.  It holds no other funds, just shares of companies that are publicly traded.  And these are also the largest public companies in the United States - ones that are watched closely by many people, and aren't easy to manipulate the price without it being noticed and investors suing those responsible.

In times past people gamed the S&P 500 index by purchasing the 501st stock, so over the years Vanguard learned to adapt by purchasing the 501-510 stocks early and waiting.  Vanguard also uses derivatives to simulate 100% investments while keeping some available cash for expenses and withdrawals.