If this in any way accurate? How much does it move the needle? What other strategies can these managers use to reduce volatility? (Maybe this comes full circle to Dollar Cost Averaging and that much of the time the market is at a new all-time high.)
Thanks!!
We think this might be less the culprit in terms of any 'froth', but it is probbaly fair to make the case that it has helped contribute to higher valuations and quicker rebounds in weak markets. We haven't really seen a smoking gun in terms of research that proves this out but the theory has gained some acceptance over the years. As noted, some of this is from large institutions needing to own a certain allocation, and some could be from passive funds 'blindly' buying into their index. These are going to impact more the 'mainstream' kinds of investments that are out there. In terms of what might be more of the frothiness at the margins, is something we think alsways has been there, it is just easier to see or hear about it with technology and social media and likely more driven by individual investors opposed to institutions.