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Rekenthaler Report

3 Reasons Index Investors Deserve Perdition (or Not)

Do the arguments that indexers are hurting the market hold water?


The Hot Seat
Lex III: Actioni contrariam semper et aequalem esse reactionem: sive corporum duorum actiones in se mutuo semper esse aequales et in partes contrarias dirigi.

More colloquially, for every action there is always opposed an equal reaction—Newton’s Third Law of Motion. To his misfortune, Newton knew nothing of index funds—they would have served him far better than the South Sea shares that he so disastrously purchased—but his axiom applies to their discussion.

John Rekenthaler does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.