Wealthy + Wi$e Ep 8 | Flow versus fundamentals

Markets are meant to reflect company fundamentals, but what if prices are increasingly being driven by something else?

In this episode of Wealthy & Wise, we hear how the rise of structural forces like passive investing, index funds and algorithmic trading are shaping and sometimes distorting the market.

We hear from Teaminvest's Andrew Coleman, Mark LaMonica from Morningstar, and Angus Geddes from Fat Prophets.

Andrew Coleman says passive investing has been both an evolution and a distortion, and he points to the "index effect" where index returns offer premiums compared to the rest of the market, but which are unsustainable.

Passive investing has delivered benefits including low-cost and diversified exposure, often outperforming active fund managers. However, it also contributes to problems like inefficient capital allocation, bigger bubbles and crashes, and more volatility.

So what can value investors do? While short-term market movements may be driven more by flows and sentiment, long-term returns still depend on fundamentals. Our experts say focus on strong businesses, avoid crowded trades, and take advantage of mispriced opportunities, especially in less-followed areas of the market.

🎧 Available on YouTube, Apple Podcasts and Spotify. 

🎙️ Enjoyed this episode? 

Don’t forget to subscribe, rate, and leave a review on your favourite podcast platform. It helps us grow and reach more Wealth Builders like you.

💡 More Teaminvest:

For more insights into Teaminvest’s disciplined, research-driven approach to investing, visit our website and learn how to become part of our investor community. 

Follow us on: LinkedIn | YouTube | Instagram | Facebook

📩  Join the conversation

Have thoughts or questions? Email us at marketing@tipgroup.com.au