He says the adjacent rise of passive investing strategies has put much of the market's value in the coffers of a few tech companies. . But it is not a palatable one, according to Steven Bregman, the founder of investment adviser
At the heart of his concern lies passive investing, which has boomed in the last decade at the expense of actively managed funds and helped mega-cap tech stocks emerge as big winners., the tradable baskets of securities that are appealing for their cost, tax, and diversification benefits. The ETF industry attracted $328 billion of net inflows in 2019 — its second-strongest year ever according to CFRA Research. , the asset manager who famously bet against the subprime mortgage crisis.
"Essentially, the stock market has — through its reshaping by the indexation business model and ETFs' asset accumulation — lost substantially all of its sources of resilience in the event of some jarring change to the present economic environment, whether that might a credit crisis, interest rate spike, inflation surge, etc," Bregman said.
Very sure!
Let's hope not