Author pages are created from data sourced from our academic publisher. 'It's kind of pseudoscience to think these indexes are perfect, and all I need is some kind of computer model instead of thinking about business,' Shiller said. Shiller, with 3002 highly influential citations. When asked what passive investing could look like in 10 years, he wasn't sure. It's a conundrum that Shiller finds perplexing. The market is all-knowing.' But how in the world can the market be all-knowing, if nobody is trying - well, not as many people - are trying to beat it?' 'So people say, 'I'm not going to try to beat the market. By the time the research was published, five years had elapsed, and by the time of the disastrous meltdown in mortgage markets, more than seven years had elapsed.

'The problem is that if you are talking about passive indexing, that is something that is really free-riding on other people's work,' Shiller said. The paper was first presented in January 2000, and it relied upon data from 1982 through the second quarter of 1999. The number could break more records this year with investors coming off the sidelines to participate in the record rally. Shiller, a Yale University economics professor, compares passive investing to seeing a green light at an intersection and crossing the street without looking both ways.Īccording to data published by Morningstar earlier this year, investors poured more than a half trillion dollars into passive funds in 2016.

It becomes more of a game,' Shiller said Monday on CNBC's ' Trading Nation.' 'It's a chaotic system.' All this talk of indexes, it's a little bit diluting of our intellect. 'The strength of this country was built on people who watched individual companies.

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