Are Index Funds an incubator for “woke”?
Index funds became common as people migrated to “cheap” ways to invest. But cheap comes at a cost some feel is too much to bear - perhaps the loss of America and Western Values, and maybe even their own portfolios!
Unlike investment methods that require a team of people - researchers, analysts, traders, etc. - to scout for possible good investments for you, Index Funds apply a computer formula and try to match whatever’s in an index. This makes management incredibly inexpensive. It’s basically just a computer server, rather than a staff of Portfolio Managers. This is the how and why of “cheap” Index Funds.
Not all indexes are bad, in fact, some are designed to be what investors seeking to avoid the “woke” might want; however, those are few and far between, and most indexes simply follow the path of least resistance, in an environment of massive government pressure to go far-Left/woke.
So, let’s take a look at what’s in the S&P 500 (arguably the most used and oft quoted Index in the West, and possibly the world). If you’re investing in the S&P 500 via Index Funds, here’s what you’re supporting, in addition to others (in no particular order):
Tyson Foods
Target
Pfizer
Moderna
Proctor & Gamble
Merck
Meta Platforms (Facebook, etc.)
Alphabet
Nvidia
Walt Disney
McDonalds
Archer Daniels Midland
Intel
Goldman Sachs
Bank of America
Citigroup
Bristol-Myers Squib
Starbucks
CVS
CSX Corporation
Microsoft
Apple
…among many others
So, clearly the question is: are these the places you want to invest/support?
Before you answer that question, consider this: if you’re the type to fist-pump when you see “go woke, go broke” and are excited to see headlines like Target and Anheuser-Busch (the parent company of Bud Lite) stocks dropping, that might actually be part of your investment portfolio…
Looked at through the lens of an investment professional: you’re cheering your own demise… and might actually be propping up otherwise damaged companies and their stock price.
In fact, this is related to the reason American Airlines Pilots Union, New York City Workers Union, and places like them are pulling their money from woke-Left money managers. These managers, it’s being argued, violate the public’s and investor’s trust by pursuing far-Left agendas. I happen to believe they’re right, and advocate for as many such lawsuits as possible. If we thought asbestos and tobacco were bad, wait until the full impact of years of ill-defined/un-defined “ESG” investing has done to global markets. (ESG stands for Environmental, Social, & Governance, which sounds virtuous, until you start asking people to define it and learn, as I have, that it’s simply a marketing tool, at best, and more likely a manipulative tactic to artificially pre-plan the winners and losers).
The next time you read “boycott” on social media, pause for a moment and wonder what impact that boycott will have on your next investment statement. Better yet, go UnWoke and get your money out of the stuff that people all over the world are discovering that they don’t like or agree with, like Big-Pharma and engineered foods allegedly being mass-manufactured by illegal aliens.
For example, let’s take a look at Tyson Foods’ top owners (keep in mind, this could very well be YOUR money, invested via things like your IRA or 401(k)):