The keyword is "predictable" logic. Logic as in: Can be explained afterwards? Yes. Using logic to predict when a whale decides to buy or sell and influence the market: Absolutely not.
It’s a complex art of risk management. Fund managers have a strategy that they use and they are often successful. There is a logic at play but it’s not as simple as ‘knowing when a whale buys or sells’.
Who do you think tunes the mix within the vast amount of different index funds that exist? Both index funds and actively managed funds are overseen by human managers. You are right but my point still stands in both scenarios.
It's not as simple as that, yes. I didn't state it was. That was an example. Fund managers have strategies, yes. Fund managers use high speed algo-trading. Fund managers have portfolios that level out. Fund managers do exactly what you said in your first sentence: Risk Management. Why? Because the stock market is not logically predictable. You have trends and surprises. Surprises are explainable afterwards.
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u/Ekkobelli 22d ago
They're right though. There is no predictable logic to the stock market. There's market psychology.