Subject: Passive Investing Fuels Rise of Mega-Firm
Know this has been discussed on the board previously, still thought this was interesting.

"Passive Investing Is Fueling the Rise of Mega-Firms. That Could Affect Your Portfolio in Unexpected Ways
The surge in passive investing doesn’t just mirror the market—it shapes it, creating new risks and opportunities."
https://www.morningstar.com/fu...

Research Paper Cited

"Paper Abstract
We study how passive investing affects asset prices. Flows into passive funds disproportion- ately raise the stock prices of the economy’s largest firms, and especially those large firms in high demand by noise traders. Because of this effect, the aggregate market can rise even when flows are entirely due to investors switching from active to passive strategies. Intuitively, passive flows increase the idiosyncratic risk of large firms in high demand, which discourages investors from correcting the flows’ effects on prices. Consistent with our theory, prices and idiosyncratic volatilities of the largest S&P500 firms rise the most following flows into that index."
https://personal.lse.ac.uk/vay...

More impetus for just investing in the MAG 7 and leaving the S&P Index for Buffett's wife and the "uneducated investor"?