<prompt> Human: Hi rpersonalfinance Ive been reading through Tim Hales excellent Smarter Investing book thanks to the recommendations on this sub. Im preparing to restructure my savings and investments based on the passive investment advice in the book. Then today, I stumbled across some articles that claim passive investment is a bubble, one with the potential to bring down active and passive funds alike. Having searched this sub, I didnt find any discussion on this risk.Some articles from a quick google... I have limited understanding of the markets, but can sortve see why passive might become a risk, if at some point we reach the stage where the vast majority of investments are passive trackers, as opposed to actively managed trading. But Im keen to hear your thoughts on this. Something we should be concerned about and prepare for? How would we even prepare for this? Or is it purely fear mongering by the power and money behind active management funds?  <response>: Fear mongering for now.This comes up all the time. If everyone is actively managing, theres a lot of noise in the statistics and it becomes much harder to find The Onetm who can beat the index.Do you, a small-time investor just looking to improve your lot in life in retirement, gamble and try to pick The One manager who can pick The Few stocks that are winners? Or do you invest in the index which has a proven, stable track record?Now imagine a world where most people are investing passively in index funds. Theres a lot less noise in the active trading world and it becomes a lot easier to see who is really a stock picking prodigywizard, and that person gets more business and charges their appropriate fees until someone goes I cant afford that, but Ill accept the index returns.Now youre at an equilibrium point where those that value the active management enough to pay for it do so, and those of us who cant or dont value it will just buy index funds.Also, I am not an expert but I dont think passive index funds are swapping which companies they buy and hold daily... Wouldnt a company have to keep up a pumping charade for at least a quarter or more to rise to the top? I would assume that would only bring more scrutiny as well. Enron is a fun, but overused example. 