🐋In real life, the concept of index investing does not work because we do not live in conditions of perfect competition. The concept of perfect market implies that:
• competition is fair
• trade is fair
• all market players are guided by bona fide intentions
• there is no an information asymmetry
• transactions costs are equal to 0.
We all know that these basic assumptions of perfect market do not work in real life. Consequently, the index investing concept in real life does not work as well, because it was invented for perfect markets.
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Около минуты
10 сентября 2023