The ‘S&P 500 Trap’, Explained.

Over the last few years, the S&P 500 has reached new all-time highs, leaving many investors, including Warren Buffett, struggling to find great opportunities in individual companies. This trend has led many to simply invest in diversified low-cost index funds or ETFs that track the S&P 500. However, as passive investing gains popularity and more money flows into these funds, is this causing some fundamental risks to emerge with the strategy itself?

In this video, we will explore potential traps investors face with this approach. We'll dive into concentration risk, market risk, interest rate risk, and behavioural biases.

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★ ★ CONTENTS ★ ★
0:00 The Problems of Passive Investing
1:20 Concentration Risk
4:30 Market Risk
5:50 Interest Rate Risk
7:30 Overvaluation Risk
8:15 Behavioural Biases
10:35 The Undeniable Success of Passive Investing

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Brandon van der Kolk is authorised to provide general financial product advice in Australia and is an Authorised Representative (Number 1305795) of Guideway Financial Services Pty Ltd, AFSL Number 420367. Any advice is general & does not consider your financial situation, needs or objectives so consider whether it's appropriate for you. Read Brandon's Financial Services Guide available from https://guideway.com.au/NewMoney.pdf. Past performance is not a reliable indicator of future investment returns.

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