Index funds are mainstream. At year end 2021 more of the US stock market was owned by index funds than by actively managed funds. Funds only own about 30% of the US market, but taking a broader view of institutional investors, assets have been shifting toward more passive institutions.

Index investing as a theoretically optimal investment strategy works best in an efficient market, but if everyone turns into a passive index investor the market can’t be efficient. This is commonly known as the GrossmanStiglitz Paradox, and it has some people raising the alarm about a tipping point for market efficiency.


Follow Ben Felix on
Twitter:   / benjaminwfelix  

Visit Rational Reminder: https://rationalreminder.ca/
Join the Rational Reminder Community: https://community.rationalreminder.ca/
Follow the Rational Reminder on:
Twitter:   / rationalremind  
Instagram:   / rationalreminder  

Visit PWL Capital: https://www.pwlcapital.com/

Follow PWL Capital on:
Twitter:   / pwlcapital  
Facebook:   / pwlcapital  
LinkedIn:   / pwlcapital  

You can find the Rational Reminder podcast on
Google Podcasts:
https://www.google.com/podcasts?feed=...
Apple Podcasts:
https://itunes.apple.com/ca/podcast/t...
Spotify Podcasts:
https://open.spotify.com/show/6RHWTH9...