Passive Negligence - Dangers in Passive Investing

Posted by Patrick Ceresna on Nov 6, 2016 8:42:30 PM

Ceresna Comment: Important article written by Michael Lebowitz highlighting the flaws in passive investing using indexing. I would summarize that as indexing becomes more popular, the more it will distort the market pricing and increase the risk to those believing it to be a conservative strategy. The more the public pours into the strategy, the more likely it is to be the epicenter to the next major market event.  The smaller and smaller the active management sector gets, the more likely that there will be considerable opportunities presented to the few dinosaur managers left using bazaar voodoo techniques like bottom up value investing. 

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Topics: passive investing, indexing

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