Why does passive investing become so hot?

[newwurldmn]

Because since 2008 you could have simply bought and held and outperformed practically every actively managed investment fund out there - including many Hedge Funds.

It won’t last, of course, but that’s the reason in a nutshell.

I think it will continue forever. The easy returns in hedge funds (the arbitrages, fat risk premiums, etc) have been compressed to almost nothing because of capital, technology, and access.

hedge funds have to get much much smarter to outperform. This is one of the reasons hedgefunds changed their mandate to “risk adjusted returns” and started aiming for 6-10percent in “all markets” though we know they mostly suck at that too.

 

[murray t turtle]

When I was a school kid I never heard anyone talking about it. Why does it become so hot?

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Long story short;
lower fees/better returns as a general rule. When i was in elementary school kid the cash market for recycled KO bottles+ containers was HOT/LOL

 

[kroxobor]

When I was a school kid I never heard anyone talking about it. Why does it become so hot?

Because when productivity falls, intense redistribution comes into play. Also access to trading becomes increasingly easy and cheap and aggressive marketing including crypto hype is difficult to resist.

 

[SunTrader]

When I was a school kid ... I was trading baseball cards not stocks and bonds.

 

[lindq]

When I was a school kid ... I was trading baseball cards not stocks and bonds.

Did you eat the gum? Hated the gum.

 

[Overnight]

Did you eat the gum? Hated the gum.

Fleer gum was the worst-tasting gum ever. Saccharin-laden nightmare.

 

[RedSun]

Why? Because on the corporate level, we have so many idiots like Elon Musk to manipulate own stocks. Apple's Tim Cook is a clever one, but the same principle.

So we take the market index, better equal weighted. So we get rid of the corporate noises.

 

[murray t turtle]

Why? Because on the corporate level, we have so many idiots like Elon Musk to manipulate own stocks. Apple's Tim Cook is a clever one, but the same principle.

So we take the market index, better equal weighted. So we get rid of the corporate noises.

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Exactly;
but who knows ,maybe he learned something from the SEC $40,000,000 fine??

 

[RedSun]

Is that SEC fine enough? Clearly not.

 

[Big AAPL]

Fleer gum was the worst-tasting gum ever. Saccharin-laden nightmare.

Topps had the best gum...hard and crunchy when you first bit into it and then turned into a bubble making machine. Followed up by a toasted almond ice cream bar by the good humor man on the bicycle pushing a cooler with dry ice...that we bought for 5 cents to make Herman Munster potions...Good times.