It's a small club and you ain't in it
Uh, can someone explain this to me like I’m 5, but somehow still have money invested in index funds? It makes me sound like my invested-in-vanguard-total-market-indexes-and-fidelity-target-date-funds money is going to be mechanically dumped into Elon Stock because of FinanceWord FinanceWord FinanceWord gobbledgook FinanceWord but is that the correct reading?
My understanding: It depends on what index the fund is tracking. QQQ tracks the Nasdaq-100 so QQQ is vulnerable. VT tracks the FTSE Global All Cap Index so VT is not <i>directly</i> affected by Nasdaq’s choices but is still exposed to some extent because spacex is likely going to be in the aforementioned FTSE index, Nasdaq’s actions impact spacex’s market cap, and thus Nasdaq’s actions impact spacex’s position in the aforementioned FTSE index which in turn affects VT’s composition (to a smaller extent than QQQ’s).
Good question. I don't know, but I'll point out that different indexes have different rules, so someone would need to check if a change to the rules for Nasdaq indexes affects the others you mention. (Perhaps they follow what Nasdaq does somehow?)
Obligatory video from Patrick Boyle<p><a href="https://www.youtube.com/watch?v=8rS3fTbC7TE" rel="nofollow">https://www.youtube.com/watch?v=8rS3fTbC7TE</a><p>Edit: someone posted it on HN, there's already a thread for it : <a href="https://news.ycombinator.com/item?id=47388640">https://news.ycombinator.com/item?id=47388640</a>
Two things I learned in this article:<p>1. Garage
2. Buy SpaceX on Day 1.
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