Index-Fund Investing Turned Into an Extreme Sport

 

Investing in an ETF that tracks only a few stocks—or even just one—is a lot more exciting than holding an index fund that owns every stock in the market. 

It’s also a lot riskier.

The median index fund held 503 stocks in 1998, Sotiroff found. By May 2025, that had shrunk to 123 stocks.

The more recently an ETF launched, the fewer stocks it tends to own. “A lot of newer investments are taking on more risk than investors may realize,”

Let’s be clear: Bundling a limited number of stocks inside an ETF doesn’t make them safe.

Fund managers want to earn higher fees than the pittance they can make running an S&P 500 or total stock-market index fund. 

And many investors are chasing higher returns—and more excitement than they can get from a traditional index fund—by focusing their bets and taking bigger risks.

Jason Zweig Wall Street Journal 11 July 2025

https://www.wsj.com/finance/investing/how-index-fund-investing-turned-into-an-extreme-sport-d555b5ed

Retail investors have been a driving force for markets this year says JPMorgan

 https://englundmacro.blogspot.com/2025/07/koplage-enligt-jpmorgan.html

American retail investors keep buying the dip

They have poured more money into US stocks every day (but one) since prices peaked late last month. 

Often, they are using the most aggressive vehicles available, such as leveraged ETFs.

https://englundmacro.blogspot.com/2025/03/american-retail-investors-keep-buying.html