FYI: In a recent exchange on CNBC with Halftime Report’s host Scott Wapner, mutual-fund manager Jeffrey Gundlach of DoubleLine — famed as the “Bond King,” as well as for many accurate predictions — said that “passive investing … has reached mania status.”
He added, "I think in fact that passive investing and robo-advisors … are going to exacerbate problems in the market because it's herding behavior."
Whether Gundlach’s warning was right depends on what he meant. He could have meant one of three different scenarios:
The accelerating trend toward investing in index funds that track the entire stock market is herding behavior and hence dangerous;
The creation of a proliferation of new indexes, each intended to track a sub-sectorof the market and new funds to track them has become a mania;
Gundlach’s near-term prediction for the stock market is dismal; therefore, investing in the stock market by any means right now — whether through equity index funds or other equities — is a recipe for disaster.
Regards,
Ted
https://www.marketwatch.com/story/d4cf5f04-0a49-11e9-a3e6-97c0e968351a-2019-01-04/print
