Random investing?(!)

[LookingInward]

There is a huge liquidity problem in the ETF space which could also feed into the next doomsday.

Could you expand on that?

Thanks

[firerufus]

@LookingInward I am by no means an expert. What got me into this idea is Mohamed El-Erian.
(https://www.bloomberg.com/news/articles ... -liquidity, https://www.bloomberg.com/news/videos/2 ... -fed-video)

I researched on this topic a big and my take is that there is a huge amount of people who buy ETFs with no research. RoboAdvisers are heavily trading ETFs. If the market dips, maybe more people want to get out and want to sell their ETFs.

But, it depends on what you bought an ETF for and which security this ETF holds. Is it a general liquid security or not? So my amateur take: ETFs seem to be super liquid because of low risk and huge trading volume. This suggests liquidity. However, the security underneath are sometimes not.

So selling one ETF might be different to selling one. So if there is a big sell in the stock market, people oversell and the ETF creator might not be able to pay the holder out.

My english is not the best to express my thoughts here, but this should give you enough ides to do your own research.

[jacob]

There's a bunch of other threads on the ETF issues, see e.g.

viewtopic.php?p=163237#p163237
viewtopic.php?f=3&t=9060
viewtopic.php?t=7650

And maybe just everything in those threads in general.

[shadow]

Thanks!