How can we expect constant growth in the market and ETFs themselves if more of us shift to passive ETFs, leaving fewer investments to push stock growth?
The lack of active investment leads to market inefficiency, which in turn results in companies in the index being punished and slowing down their growth, especially considering that older generations are retiring and will begin withdrawing funds from passive funds, which will then have to sell assets, further punishing good companies.
Will the increase in passive investment lead to stagnation?
Is there any modern analysis or similar that deals with the issue of unlimited growth, and is there a glass ceiling in ETF growth?
If everything is priced in and a monkey can do better than the market (in the short term), doesn't that mean that luck is the only requirement for short-term investment, meaning that active investment will eventually be negligible and will not push the market, leading to stagnation?
Submitted February 25, 2023 at 03:41AM by WaIterWolf https://ift.tt/Y0fgwEi
