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Leaning in on index tracking worked well for many investors for much of the past decade. But in today’s volatile and concentrated markets, that strategy may not be enough. ![]()
“Why don’t you just buy the index?” might be one of the most-asked questions in investing. It’s an approach that’s simultaneously simple, low-cost, and seemingly diversified. What’s less talked about is the opportunity cost of relying on this strategy alone to build long-term wealth, and its vulnerability in the volatile markets we’re living through. The answer isn’t to abandon passive investing altogether — but to seek true diversification by combining passive ETFs with “smart” managed portfolios. Here’s why, and how.
Over-Indexing on the Short Term
By design, a market-cap index buys more of whatever has already gone up. The more a stock rises, the larger its weight, regardless of valuation. Thanks to the AI rally, chip-heavy Taiwan and Korea together…
