Active Investing: Rest in Peace or Resurgent Force?

When Jack Bogle started the Vanguard 500 Index fund in 1975, I am sure that he never visualized how successful he would be. In the last few decades, passive investing has widened its offerings (to include ETFs and other markets) and has taken away market share from active investing, but the pace of disruption seems to have quickened in the last decade. The best advertising for passive investing is the performance of active investors, who seem to lag their passive counterparts, across time, style classes and geographies. I argue that active investing is destined to shrink as a business and that while there are potentially dangerous consequences to the rush to passive investing, the process has its own correction mechanisms. Finally, even in the face of the evidence to the contrary, I explain my rationale for staying an active investor. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/activeinvesting.pdf Blog Post: http://aswathdamodaran.blogspot.com/2016/12/active-investing-rest-in-peace-or.html

Comments

1. Great insight. Thanks
2. Simply Superb. He is extremely practical and honest.
3. Great video. Thanks1
4. Quick question: how does my total return change if I am a passive investor holding index ETFs and selling covered out-of-money calls on them? Shouldn't I beat the market in the long-run if I keep premiums on the options in 60-70% of time?
5. Jack Bogle wrote a piece in the FT last week suggesting that governments should have closer look at ETFs... because he thinks they cost investors more money than index mutual funds. Crazy... anway, superbe video.
6. Respected Sir, Thank a lot for your kindefforts to make valuable knowledge of Finance Management as resources available to all who have inquisitive flare of learnings......
7. Thank you Sir.
   I'm a regular follower and thanks for everything you share with us. Thanks for everything. It helps a lot :)