Money Tips Daily By Charles Kelly, Former Ifa And Author Of Yes, Money Can Buy You Happiness.

Are Index Tracking Funds a Safe Investment? Not according to Michael Burry, the legendary investor featured in the book and movie, The Big Short, who is predicting a 2008-style crash. American Michael J. Burry is a physician, investor, and hedge fund manager. He was the founder of the hedge fund Scion Capital, which he ran from 2000 until 2008, before closing the firm to focus on his own personal investments. Burry made a fortune betting against CDOs before the 2008 financial crisis and his estimate net worth is $250 million. He currently manages over $100 million in his own fund. In an interview with Bloomberg, Burry said index fund inflows (investment money) are distorting prices for stocks and bonds in much the same way that CDO purchases did for subprime mortgages over a decade ago. The flows will reverse at some point, he said, and “it will be ugly” when they do. “Like most bubbles, the longer it goes on, the worse the crash will be,” said Burry, who oversees about $340 million at Scion Asset Management