Jeremy,
I wanted to get your opinion on the quote on quote “index” bubble that is said to be an underlying problem in America. Everyone is turning to passive investing and putting their money into index funds and ETFs because it’s the best option for them due to the fees and amount of involvement. Though, some would argue that index funds are distorting stock and bond markets. The argument is that passive investing has removed price discovery from the markets and since security level analysis is not required on these ETFs, true price discovery is not present. So in the event of a an index fund distorting the true value of a market, things could go south quickly.
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Welcome @Luc_Nelson!
Basically I think scare tactics like “index fund bubble” is scary nonsense that is to be ignored. As soon as there is any inefficiency in price discovery of stocks or ETFs, smart traders will instantly step in to take advantage and put the market back into whack. If they don’t, I will. I wrote a longer article on this here:
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