Futures Edge Show: Finance Unfiltered with Jim Iuorio and Bob Iaccino Why Passive Investing Could Be Riskier Than You Think
Nov 26, 2025
In this discussion, Seth Cogswell, Founder of Running Oak Capital, dives into the complexities of passive investing. He challenges the notion of "buy and hold," highlighting how it can overlook real risks. Seth warns about the pitfalls of momentum strategies and large-cap stocks, suggesting that these may lead investors astray. The conversation takes a critical turn as they examine Bitcoin’s legitimacy, comparing it to Ponzi schemes while questioning its future value. Overall, Seth advocates for risk-aware investment strategies to navigate volatile markets.
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Passive Allocates By Size, Not Merit
- Passive investing allocates capital by size, not merit, which can misallocate resources across the economy.
- Seth Cogswell argues passive ignores risk and encourages buying more of already-overvalued winners.
Passive Fuels Momentum Feedback Loops
- Passive funds buy more of stocks as they rise, creating a feedback loop that rewards momentum, not valuation.
- That structure forces investors to hold expensive positions longer and delays selling until index reconstitution.
Start With The End In Mind
- Begin with the end in mind and choose portfolios aligned with your timeframe and risk tolerance.
- Consider factor or momentum strategies with explicit sell rules rather than blind buy-and-hold indexing.