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Passive Investing Is (Still) QE For Stocks
Here's something I probably shouldn't say to a readership comprised in no small part of active fund
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“Oh, I’m sorry, did I break your concentration? I didn’t mean to do that. Please. Continue.”
I suspect that trend will begin to reverse when the Baby Boom generation begins drawing down their retirement savings in earnest. That could happen quickly–in a recession/market collapse scenario–or slowly over time. Either way, those same names that benefitted on the way up should see more draw on the way down. The younger generations may continue to contribute to index ETFs, but they are simply outnumbered by the number of retiring Boomers.
For what it’s worth, at a recent family gathering I was speaking to a cousin who has just retired and shut down his PR business helping CEO’s and IR Departments write annual reports. He says that many of his clients were in his same age cohort and also retiring. However, the driving force was that few humans look at AR’s any more. They’re now written to target AI keywords, because there are no more stock pickers.
In line with Bill W’s anecdote, why bother with research and stock picking? Now all that matters are share buybacks and quant algos.
Though I suppose nimble spec traders would rightly add front’running the latest themes of the week