The only way you’re likely to be making profits at the expense of others is if you pick stocks in industries with significant externalized costs… which I admit may be hard to avoid, especially with an index fund, depending on the true impact of CO2 emissions and on the status of corresponding Pigovian taxes that apply to your investment targets.
Otherwise, for the most part you’re making profits at the profit of others. Life isn’t a zero sum game. Capital markets want your dollars because investment can help create and improve products that are worth more than their inputs plus the investment, and “worth more” is in the opinion of the people who buy those products, who after all wouldn’t have bought them if they didn’t value them more than the money they spent. Likewise for employees as well as consumers—even “sweat shops” with dismal conditions by first world standards have to supply locally-high wages to attract workers, and historically this ends up raising wages for the country as a whole.
Your profits are (infinitesimally) reducing the profits made by other investors. Microeconomics says that if you increase the supply of something, including capital, the price paid to the suppliers typically goes down. But no wealth goes away in this scenario. Other investors’ loss is exceeded by employees’, consumers’ and your gain, and since consumers and employees are on average less wealthy than investors the net gain is even greater in utility than in dollars.
The only way you’re likely to be making profits at the expense of others is if you pick stocks in industries with significant externalized costs… which I admit may be hard to avoid, especially with an index fund, depending on the true impact of CO2 emissions and on the status of corresponding Pigovian taxes that apply to your investment targets.
Otherwise, for the most part you’re making profits at the profit of others. Life isn’t a zero sum game. Capital markets want your dollars because investment can help create and improve products that are worth more than their inputs plus the investment, and “worth more” is in the opinion of the people who buy those products, who after all wouldn’t have bought them if they didn’t value them more than the money they spent. Likewise for employees as well as consumers—even “sweat shops” with dismal conditions by first world standards have to supply locally-high wages to attract workers, and historically this ends up raising wages for the country as a whole.
Your profits are (infinitesimally) reducing the profits made by other investors. Microeconomics says that if you increase the supply of something, including capital, the price paid to the suppliers typically goes down. But no wealth goes away in this scenario. Other investors’ loss is exceeded by employees’, consumers’ and your gain, and since consumers and employees are on average less wealthy than investors the net gain is even greater in utility than in dollars.