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
The investing industry loves to make bold predictions. Financial commentators often appear in the media claiming to foresee market trends or economic turning points. But as history has shown, these forecasts are rarely accurate. While some patterns like increased volatility are more predictable, no one truly knows where the market is headed next. That’s why basing your investment decisions on short-term forecasts can do more harm than good. As Professor ELROY DIMSON explains,
Robin Powell
Jan 20, 20253 min read
SUBSCRIBE
Simply provide your email address to receive our regular update.
