Trending
The long-term trend of more and more assets flooding into passive Exchange-Traded Funds (ETF) from active mutual funds continues to kick off 2025. This structural shift in markets falls into the category of things that can generally be ignored as they develop, but at some point, a tipping point is triggered and the world completely changes. There are already a lot of complaints that price discovery (i.e. people actively valuing businesses) in markets has disappeared, which has resulted in systematic overvaluation for many companies.
We believe that passive allocations make a lot of sense for tax, cost, and efficiency reasons. That said, the flow of funds to indices that keep getting more expensive is creating a risk we believe may be underappreciated by the broader investment community.
On Bubble Watch
We couldn’t be more fortunate to be hosting Howard Marks for a series of meetings in the coming months. He is a true legend of the investing world, with his memos very firmly living on our “must read” list. This latest piece explores the nature of what a bubble actually is, and whether there is reason to believe we are in one at the moment.
But for me, a bubble or crash is more a state of mind than a quantitative calculation.
Your Blueprint to Financial Freedom
There are some great no-nonsense pointers in this interview with Codie Sanchez. It is applicable to founders and entrepreneurs, as well as executives who really want to take their contributions and compensation to the next level.
I only make money if you make money, would you be open to that?
The Cassandra of Passive Investing
A much deeper exploration of the point we were making above. A bit of a rabbit hole but well worth the read!
“Buy more of stuff that went up since I bought last. And so that reinforces the momentum characteristics of the market,” Green explains. As passive becomes a bigger proportion of the stock market, it leads to increased concentration and correlation.
Your phone is destroying your social life
An article/podcast exploring the cost of the convenience that modern technology has provided. This is worthwhile given it is something that all of us, and the coming generation, are experimenting with in real time. We don’t think it is controversial to claim the experiment isn’t going so well at this point.
Because if your reality is limited to what you can find in the virtual world, and your choices in the physical world narrow with each passing year, that’s not freedom. That’s not human flourishing.
Gallant MacDonald designs bespoke investment programs for a select group of institutions and families who have made significant contributions to business, public service, and philanthropy.
If you enjoyed this month’s Insights, please feel free to reach out, subscribe, or share!
