I don’t know about you but to me, it feels like over the last 20 years or so, the stock market has become less and less discerning about corporate earnings. Whether a company has good or bad earnings matters less and less for share prices and instead it is the overall market sentiment that drives a larger chunk of equity returns.
I suspect this has been driven by the tide of easy money over the last 20+ years -- as monetary tightening, energy crises and deglobalization take hold, I am guessing that we will have a’60s style lost decade in equities overall and passive/index investing will become less important compared to stock/sector picking.
I think it is a result of the rise of passive investing and to be honest, whatever the next decade holds, passive investing will likely increase in importance rather than decline in favour of stock picking. The track record of stock pickers is simply too bad (both in bull and bear markets) to make a case in favour of stock picking vs. passive investing.
Perhaps you could do a segment on what would happen if 75% of the money in the market was passive...... it would be interesting to hear your thoughts.....
I suspect this has been driven by the tide of easy money over the last 20+ years -- as monetary tightening, energy crises and deglobalization take hold, I am guessing that we will have a’60s style lost decade in equities overall and passive/index investing will become less important compared to stock/sector picking.
I think it is a result of the rise of passive investing and to be honest, whatever the next decade holds, passive investing will likely increase in importance rather than decline in favour of stock picking. The track record of stock pickers is simply too bad (both in bull and bear markets) to make a case in favour of stock picking vs. passive investing.
Perhaps you could do a segment on what would happen if 75% of the money in the market was passive...... it would be interesting to hear your thoughts.....