The Myth of Passive Investing
The world of investing has once again changed and evolved, as it always has throughout history.
In 1960-70's it was the ‘Nifty-Fifty', in the 1980's it was the rise of the mutual fund industry and portfolio insurance, the 1990's was the evolution of online trading which brought self-taught Joe-Traders into the market. In the 2000's we saw the real-estate investing boom, and in the 2010's it was the Fed-driven liquidity boom and technology combination that created a passive investment uprising.
Link: The Myth of Passive Investing
The ETF Downside
People are not bullish on stocks - they are bullish on the stock market. Most of these people are not thinking about the S&P 500 stocks as 500 stocks, they are thinking about it as an asset unto itself. So, when people talk about an index, they are not talking about the benefits of diversification anymore. One reference to this would be Exchange Traded Funds (ETF), buying the S&P 500 ETF and following the index is an example of a passive investment strategy.
Link: The ETF Downside
Passive Vs Active Investing
We still call it a stock market, but these days it has many more indexes than it does stocks. There are nearly 6,000 indexes today, up from fewer than 1,000 a decade ago. Meanwhile, the number of stocks in the Wilshire 5000 Total Market Index has shrivelled to 3,599 from 7,562 in 1998.