I worry about passive investing. Does it turn into winner take all?
If most everyone puts there money in a index tracker it would go up or down based on contribution and withdraw rates versus actual results of the market.
So, while there is more contributing than withdrawing it continues to go up which would attract more money to it.
The risk is that there is so much in index funds that the valuations of companies will become distanced form what they're actually worth.
The likelihood of that happening given how much money there is to be made in finding the inefficiencies in the stock market are, in my opinion, very small.
This ignores just how skewed towards the rich stock ownership is. The liquidation of stocks owned by the middle class will not move the needles much. And the very rich don't need to liquidate their stocks to maintain their lifestyle.
or maybe public investable assets? Too much money chasing too small a pool of assets? There are also a lot of private assets that could be superior investments, but average folks do not have access to.
If most everyone puts there money in a index tracker it would go up or down based on contribution and withdraw rates versus actual results of the market.
So, while there is more contributing than withdrawing it continues to go up which would attract more money to it.