On 03/03/16 20:47, Jeroen Dekkers wrote: > At Thu, 3 Mar 2016 19:29:32 +0100, > Daniel Pocock wrote: >> >> On 03/03/16 19:16, martin f krafft wrote: >>> also sprach Daniel Pocock <[email protected]> [2016-03-03 15:18 >>> +0100]: >>>> Why wouldn't people also potentially volunteer some time for >>>> portfolio management? >>> >>> I'd consider this a really bad idea. Portfolio management is >>> perhaps *the* profession that benefits the most from a professional >>> (or at least one of them), contract-based separation between client >>> and actor, with extrinsic motivation of the actor. Even that's >>> impossible to properly tie down, but I certainly would never want >>> to see some people point fingers at others and claiming that they >>> have lost us money because the markets didn't do as they'd have >>> hoped. >>> >>> Would these volunteers invest in Microsoft? Google? Apple? Nestlé? >>> Weapons manufacturers? Companies that exploit resources? >>> >> >> That's not fair, you shouldn't make a list like that without including >> tobacco companies. >> >> Anyhow, I understand the point you are making, I'd be interested to >> know if many other people feel the same reluctance or have other opinions. > > Instead of managing a portfolio, we can just choose one or a few ETF's > that track global indices such as the MSCI World Index and the STOXX > Global 1800. Then you can blame nobody for picking the wrong > stock. Those still can go down, but the long term gross return is > higher than the standard interest rates on savings. We indirectly do > invest in corporations people might consider evil, but the money on a > savings account can also be lent out to an evil corporation by the > bank. >
Well, that last bit is not quite correct: banks don't just lend out the money people deposit, they lend it out several times over[1]. E.g. if Debian has $250k in the bank, the bank can lend out $1 million or more to somebody else and the interest they collect on that $1 million loan is many multiples of the interest they give back to Debian. For better or worse, that is the wonder of the fractional reserve system. Regards, Daniel 1. https://en.wikipedia.org/wiki/Fractional-reserve_banking#Money_multiplier
