Index funds basically delegate "price discovery" to the activity of other invest...

		human20190310 on Aug 5, 2019 \| parent \| context \| favorite \| on: Yield curve is blaring loudest recession warning s... Index funds basically delegate "price discovery" to the activity of other investors, and just assume that the market price is the right one. This works as long as there are enough non-index investors trying to outsmart the market by actively trading.

And there will always be active traders setting prices, because it is profitable to do so.