One cause of market turbulence: computer-driven index funds
ETFs, a preferred investment choice, have become a dominant force, adding momentum to the market's rise and fall.
Add BT as a preferred source
A DECADE ago, the centre of gravity on Wall Street was raucous trading desks and stock exchange floors. These days, the locus has shifted to far quieter places, where computers are in charge.
The transition has been years in the making, but its effect has been on full display over the past week. After propelling the market to historic highs, passive investment strategies - which follow a simple set of rules and are carried out by sophisticated computer programs, not humans - are among the factors fuelling the market's recent plunge.
This is the new reality of today's stock market: Funds that track financial indexes have become a dominant force, and they can act as accelerants, adding momentum to the market's rise and fall.
Share with us your feedback on BT's products and services
