Using intelligent algorithms, a state-of-the-art infrastructure connected to exchanges and enormous computing capacities, high-frequency trading companies exploit tiny price differences in fractions of a second to gain an advantage over other market players and reap the profits
Prices have reached an unreasonable level at least in the U.S. and in some industries and sectors such as information technology (computers, semiconductors) and green technology where fundamentals no longer seem to matter and P/E ratios are often above 30. In other markets, Swiss, emerging or European, prices, although quite high, remain more reasonable.
The sharp rise in U.S. interest rates has heckled the equity markets at the beginning of the year, and the evolution of rates will also be crucial for ETF investors over the medium term. Even passive investors, unless they have a fully systematic investment plan, need to avoid bad entry points into the markets, especially before a sharp rise in interest rates.
Bank fees have risen sharply in recent years in the low or negative interest rate environment. Controlling investment fees (management fees, custody fees and transaction fees in particular) can be astronomical.
According to the Boglehead philosophy, a mechanical plan must be developed and implemented. For the overwhelming majority of investors, I am convinced that this is the best possible approach: it is possible to contain overconfidence or avoid damaging behavior in the event of temporary market irrationality.
The success of Robinhood is simple: It is hidden commissions under the guise of free services to investors. The company sells client orders to market makers (who actually use them for profit) and financial service providers.