From the desk of Steve Strazza @Sstrazza
I want to elaborate on a big theme of late that’s been on my mind. We’ve written about it, discussed it internally – as well as on Clubhouse, and just this morning JC and Willie were both tweeting about it.
One major implication of the impending trend reversal in growth vs value is its potential effect on passive investment vehicles.
Considering what a mega-trend passive investing has become with the ETF boom over the past decade-plus, this is likely to impact investors far and wide… If they don’t reposition themselves appropriately.
The reason for this is nuanced but in my opinion, it boils down to the argument that passive is really just active and there have been significant changes in market structure since the financial crisis that have resulted in the major averages being dominated by just a small handful of stocks.
In this post, we’ll take a look at what these stocks are doing and what this price action could mean for the passive investing community.