Wishing Upon a Star?

Be careful what you wish for.

Years ago the organic food movement was a fringe activity. You could find organic food at a few health-food stores and farmer’s markets, but not very easily. Now almost every supermarket has an organic food section, and entire chains, like Whole Foods, are devoted to the concept. Organic food sales now comprise over 4% of total food sales in the US, doubling every 10 years or so.

Not so long ago, index funds were the province of finance professors and pension-fund consultants. The market-matching concept was a minor part of the investment landscape. Then came the evelopment of index-dependent ETFs and the growth of index-oriented mutual fund family Vanguard. Now it seems that everyone offers some kind of index-alternative.

When niche products go mainstream they bring their own sets of problems and policy fights to the table. Regulators get involved. Some consumers and providers long for the “good old days” of obscurity and minor-player status. But you can’t go back. Once a product becomes big business, billions of dollars are at stake. Conflict is inevitable

Years ago Richard Bach wrote, “Be careful what you pray for, because you’re going to get it.” Whether it’s in the grocery aisle or a broker’s office, the world often molds itself to our expectations. We just don’t always like what we get.

Douglas R. Tengdin, CFA

Chief Investment Officer

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