Why ETFs can be dangerous for stocks and investors
The rise of listed funds has made the whole group of shares "nothing but chitter in a bizarre game of stock market roulette," said CN Cracker Jim Cramer on Thursday.
" The catch shares – Facebook, Amazon, Netflix and Google, now Alphabet – are in 10 different ETFs, so on a particular day their movements are one tend to be driven by the action of the ETFs and not the other way around, said "the host of wrong money". "The tail is betting on the dog."
And unfortunately, "FANG is not even the worst of it," said Cramer. He warned about certain "hidden" ETFs that try to mirror actions as portfolio managers, using derivative instruments to invest in professional investors' efforts.
Calling these funds "totally insulting, moronic, horrible," said Cramer. Large companies whose shares appear in these ETFs should lead to a case against "ETF peddlers" as a way to resolve the potentially harmful trend.
"At the end of the day, these ET Fs can be very useful for daily traders, but normal investors pay a terrible price because it makes the entire inventory pickup much more difficult and … Yes, far more useless than it should be, he said. [1[ads1]9659006]
