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How much passive investing is too much?

Warnings that index funds have broken the stock market all imply a threshold: a share of the market at which price discovery fails. Nobody making the argument names it. Owen Lamont, writing in the Financial Analysts Journal, argues that no such number exists short of complete passive ownership, and that what actually determines whether prices stay informative is who is left doing the trading. His case, the strongest peer-reviewed research against it, and what the performance

Robin Powell

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Split-screen comparison of a financial trading floor: busy left side with many traders at monitors, sparse right side with significantly fewer traders and empty desks, illustrating the question of how much passive is too much in financial markets

How much passive investing is too much?

Warnings that index funds have broken the stock market all imply a threshold: a share of the market at which price discovery fails. Nobody making the argument names it. Owen Lamont, writing in the Financial Analysts Journal, argues that no such number exists short of complete passive ownership, and that what actually determines whether prices stay informative is who is left doing the trading. His case, the strongest peer-reviewed research against it, and what the performance

Robin Powell

Aug 37 min read

A black Wall Street sign against a blurred building façade, illustrating why active funds underperform

Why active funds underperform even when the manager picks well

The managers running the biggest active funds picked stocks that beat the market in 2025 — and most still lagged their benchmark. A Morningstar do-nothing experiment and a body of academic research explain why active funds underperform even when the picking is good: skilled buying undone by poor selling, the hidden cost of trading, and the incentives that keep managers churning. The UK evidence points the same way.

Robin Powell

Jun 87 min read

A middle-aged woman sits in a café, chin resting on her hand, looking thoughtfully into the distance — reflecting on how much of her portfolio should be in stocks

How much of your portfolio should be in stocks?

How much of your portfolio should be in stocks? It's one of investing's most important questions — and the standard answer is costing the average investor the equivalent of 2% of their lifetime consumption. Yale economists have finally built something better, and it fits in a spreadsheet.

Robin Powell

Mar 138 min read

Ten timeless investment lessons from The Intelligent Investor

Speaking on Morningstar's The Long View podcast in May 2025, Wall Street Journal columnist Jason Zweig offered sobering advice for investors grappling with unprecedented market uncertainty. As global markets wrestle with President Trump's sweeping tariff policies, Zweig warned: "We don't know that fundamental rules haven't changed...but that's an awful lot of things to be right about" when making dramatic portfolio changes. Zweig's commentary comes as he prepares the latest e