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How much passive investing is too much?
Warnings that index funds have broken the stock market all imply a threshold: a share of the market at which price discovery fails. Nobody making the argument names it. Owen Lamont, writing in the Financial Analysts Journal, argues that no such number exists short of complete passive ownership, and that what actually determines whether prices stay informative is who is left doing the trading. His case, the strongest peer-reviewed research against it, and what the performance
Robin Powell
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Your wealth manager is not your financial planner
New FCA figures show that fewer than one in three wealth management firms also offer financial advice. That is not a scandal, and nobody has been mis-sold anything. But it does mean a great many people are paying for a well-run portfolio while assuming they are also getting a plan. The two are not the same thing, and it is the plan that answers the question most investors actually care about: can I stop work when I want to?
Robin Powell
2 days ago6 min read
Why Vanguard is called Vanguard
Fifty years ago this week, the first index fund for ordinary investors went on sale and almost nobody bought it. The company behind it had been named two years earlier after a ship in a picture on its founder's wall. The story Vanguard tells about its own beginnings is tidier than what actually happened, and less useful.
Robin Powell
Sep 44 min read
Are equity investors really greedy, selfish gamblers?
Most people think share owners are greedier, more selfish and more inclined to gamble than everyone else. Research across 11 countries finds that belief predicts who invests and who doesn't, and that it bears no relation to financial knowledge. Offered an identical bet, people took it when it was called a lottery ticket and refused it when it was called a share.
TEBI
Aug 314 min read
Hedge fund crowding just hit a record. This is what it looks like
Hedge funds are sold on diversification, uncorrelated returns and capital preservation. Goldman Sachs publishes the 50 stocks that turn up most often among their largest long positions, and eight of the ten biggest make chips, memory or the machines that make chips. Most of what a hedge fund does never reaches a regulatory filing. The disclosed long book is the one part investors can inspect, and at the middle of this year it was almost 40 per cent technology.
TEBI
Aug 257 min read
High active share funds are now the worst performers
Active share was meant to identify fund managers worth paying for. A new study covering four decades of US fund data finds that high active share funds now systematically underperform low active share funds. The reversal began in 2010 and coincides with the rise of passive investing creating structural pressure on active managers.
Robin Powell
Aug 175 min read
UK fund persistence: why yesterday's winners rarely repeat
Theodore Sturgeon argued that the surviving tenth of any field is worth finding. New data from S&P Dow Jones Indices tests whether that holds for UK funds. Of the 80 sterling-denominated UK equity funds in the top quartile at the end of 2021, three were still there four years later. Over two non-overlapping five-year periods, funds starting in the third quartile reached the top far more often than funds already there held their place.
TEBI
Aug 106 min read
Betting versus investing: why crowds win in one but not the other
Prediction markets and sports betting price outcomes almost as accurately as the stock market prices companies. A new Morgan Stanley report explains why that shared accuracy still leaves nearly every bettor poorer, and nearly every long-term investor richer.
TEBI
Aug 64 min read
AI and stock returns: lessons from the railways
he most careful expert forecast of AI's economic effects covers GDP, productivity, employment and inequality. It does not cover share prices. Across 21 developed markets and 120 years of data, economic growth has shown no reliable positive relationship with what shareholders earn. What has correlated is growth in earnings per share, and four mechanisms separate the two. Here is what the evidence says about AI and stock returns, and what the railways and the dot-com boom alrea
TEBI
Aug 410 min read
How much passive investing is too much?
Warnings that index funds have broken the stock market all imply a threshold: a share of the market at which price discovery fails. Nobody making the argument names it. Owen Lamont, writing in the Financial Analysts Journal, argues that no such number exists short of complete passive ownership, and that what actually determines whether prices stay informative is who is left doing the trading. His case, the strongest peer-reviewed research against it, and what the performance
Robin Powell
Aug 37 min read
AI investing risk: being right isn't enough
Leopold Aschenbrenner had better access to AI than almost any investor. His hedge fund grew to $24bn in less than two years. Yet it collapsed not because his AI thesis was wrong, but because leverage forced him to sell. The AI investing risk his story reveals is one most investors overlook.
Robin Powell
Jul 314 min read
Investing versus gambling: the risks investors confuse
A poll asked Britons to choose between £50,000 for certain or a coin flip for £1 million. Nearly three quarters took the sure thing. Expected value says they were wrong. Rationality says they might be right. The real insight lies in what the choice reveals about risk — and how to make the right decisions when it matters most.
Robin Powell
Jul 297 min read
Does ESG divestment cut emissions?
Buy the clean companies, avoid the dirty ones, and emissions fall. That is the promise almost every sustainable fund rests on. New calibrations from Samuel Hartzmark of Boston College and Kelly Shue of Yale suggest the version of ESG divestment that leaves a high-emitting industry altogether can push global emissions up, while staying inside the industry and holding the cleanest companies in it brings them down. On a fund factsheet, the two look identical.
Robin Powell
Jul 2410 min read
Is the MoneySuperMarket investment platform any good?
MoneySuperMarket spent decades telling people where to find the cheapest deal. Now it sells its own investment platform, pitched as low-cost and compared, for once, by the company doing the selling. The funds are sensibly chosen. But is 0.34 per cent a year really low, and is a comparison run by the seller one to trust? A look at the fee, the pot-size trap and the comparison the comparison site left out.
Robin Powell
Jul 228 min read
When is enough enough? The real purpose of financial planning
Wealth can buy security, freedom and choice. What it cannot do is address the purpose of financial planning: telling you when to stop. New behavioural research commissioned by Y TREE finds that the most driven wealthy people report both the highest life satisfaction and the highest anxiety, a reminder that knowing what money is for may matter as much as growing it.
Robin Powell
Jul 219 min read
Why market narratives survive being proven wrong
When a false claim is corrected, we assume its influence disappears. New experimental evidence suggests that is true for numbers but not for stories: a debunked statistic leaves almost no trace, while a debunked story keeps shaping beliefs — and leaves people more confident, not less. This is what the finding means for the market narratives investors absorb every day, and why the beliefs held most firmly may deserve the most scrutiny.
TEBI
Jul 207 min read
FCA asset management reforms: the £128m question
On 14 July 2026 the FCA proposed the biggest overhaul of UK asset management regulation since the rules were inherited from the EU: a single remuneration code, a new fund-reporting framework and higher size thresholds, worth an estimated £128 million a year to firms. The industry welcomed it within hours. What the reforms mean for ordinary investors, and whether the savings ever reach them, is the debate that has barely begun.
TEBI
Jul 178 min read
Terry Smith, Neil Woodford and the test Smith set for himself
In January 2020, Terry Smith told his investors why Neil Woodford had failed: the star manager changed his game. Five years on, Smith's own Fundsmith letter records the highest turnover in the fund's history and a new taste for momentum — and the way he explains it matches a pattern behavioural researchers have measured in fund managers' own words.
Robin Powell
Jul 158 min read
Portfolio insurance: the crash protection that rarely pays out
Buying put options to insure a portfolio against a market crash feels like the prudent thing to do. But new research covering more than two centuries of market history finds that portfolio insurance loses money over time — and that it fails in exactly the slow, grinding bear markets that do investors the most harm. People insure almost everything they value. Homes, cars, phones, even pets: paying a modest premium to guard against a loss you would rather not face is one of the
Robin Powell
Jul 107 min read
Weather and investing: how sunshine skews stock returns
Most investors assume prices are moved by information: earnings, interest rates, news. A peer-reviewed study of 37 years of Nasdaq data suggests something stranger. The poor returns of speculative 'lottery-like' stocks are concentrated after sunny weather in the cities where the firms are based — and largely vanish after cloudy spells. The finding says less about forecasts than about how quietly mood reaches our decisions, and why rules-based investing exists.
Robin Powell
Jul 96 min read
Fundsmith's underperformance, at 21 times the cost
Terry Smith built Fundsmith on a simple discipline: buy good companies and do nothing. Now, five years into trailing the market, he is turning over half his portfolio and paying more attention to momentum. The strategy that made his name is changing. The fee that came with it is not.
Robin Powell
Jul 93 min read
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