Let's look at Tesla for example. Its price went up by 50% in a single month since they announced that it would be included in the SP500. Is it really worth 50% more all of a sudden? Probably not. My guess is that there are many investors with their money invested in index ETF tracking the SP500, and all these ETFs were forced into buying Tesla stock regardless of its price. Given that there are many brokerage firms that allow investing without paying any fees, why not pick 50-70 diversified stocks yourself rather than investing in index ETFs?
Submitted December 19, 2020 at 08:58PM by lospepes0 https://ift.tt/3rcj2VN
