Index funds have made markets less efficient — half the money in the room is now buying without an opinion about anything.
2 responses in depends
Price discovery still happens at the margin and the margin is enormous in absolute terms. The share of passive money matters less than the volume of active trading, which has not fallen.
They have made price discovery someone else's job, which is fine until the number of someone elses gets small. Nobody knows where that number is.
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what all this does to your head, and what to do about it.