The Wall Street Journal published an article called The Dying Business of Picking Stocks. The main point being investors are giving up on stock picking or actively managed funds. In theory investing passively is amazing and I've advocated it for a long time. It has got to a point where the mass migration from active towards passive is influencing stock prices which will ultimately result in low returns for passive investors.
What makes passive investing so attractive?
I believe one of the main attractions of passive investing is the psychological feeling you'll never do worse than your neighbour. Your relative performance is always in-line with the market and it's nice to be one of the herd (herd mentality).
The other attraction is that active management is just pretty atrocious. Fees are admittedly high in an absolute sense but definitely compared to most passive choices. Worse, as I…
