Noelle Acheson says passive investing will eventually kill US capital markets, with AI rotation holding off a correction for now "I've been banging the drum about this for years, that passive investing is going to kill the US capital market eventually, because the big funds are doing very well. The index is doing very well. So everyone's feeling very good. So we're going to put more money into an index fund." "That just funnels money up to the big or the top performers, and it is sort of not the purpose of capital markets to just pick the top performers. You're supposed to pick ones that align with what you think is coming, etc., etc." "The funneling up does, by its very nature, concentrate returns, and that itself, that lack of breadth, could lead to some very nasty drops. It could also, again, taking the other side here, it could also earn some resilience." "I've been expecting a correction based on lack of breadth for a while, and I've been wrong, because what I didn't see coming was the swift rotation from the Mag 7 into the chips, into those others that are now going to benefit from AI, into logistics, etc." "There's a swift rotation, which is not necessarily the index funds. That is the stock pickers. So you have sectors, subsectors picking up the baton. There isn't a widespread panic just yet, largely because of the potential that is still being digested from the new technology."