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John Authers & Michael Gayed: Unraveling the Peak Passive Debate

Lead-Lag Live

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The Negative Effects of Passive Investment on the Stock Market

The idea of the stock market is that it encourages capital to go to where it could be best used and discourages it from going to places where it would be wasted. It's very hard to argue that that is still happening if that much of the funds that are devoted to the stock market are allocated passively, he says. "You can't have the entire stock market managed passively because then there would be no price discovery at all"

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