Indexing Bubble and Asset Class Returns Still Revert to the Mean

What this episode covers

How asset class returns move in cycles with periods of above-average returns followed by periods of lower returns. How has the rise of passive indexing led to higher stock valuations, and what does that mean for markets?SponsorsNetSuite - Download the CFO’s Guide to AI and Machine LearningLegalZoom - Use code David10 to 10% offInsiders Guide Email NewsletterGet our free Investors' Checklist when you sign up for the free Money for the Rest of Us email newsletterOur Premium ProductsAsset CampMoney for the Rest of Us PlusShow NotesThe Equity Risk Premium: Nine Myths (JPM Series) by Rob Arnott—Research AffiliatesThe Greatest Scourge in Factorland: Revaluation Alpha = Fake Alpha (JPM Series) by Rob Arnott—Research AffiliatesPASSIVE INVESTING AND THE RISE OF MEGA-FIRMS by Hao Jiang, Dimitri Vayanos, and Lu Zheng—NBERLimits to Diversification: Passive Investing and Market Risk by Lily H. Fang, et al.—SSRNRelated Episodes503: U.S. Stocks Have Never Been This Overhyped or Expensive500: The S&P 500 Index and the Decade Ahead468: Lessons from Japan’s 34 Years of Stock Market Underperformance390: Are BlackRock and Vanguard Too Big and Powerful?234: Index But Don’t Herd See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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