Is There a Bubble Forming in Stock Market Index Funds?

Passive investing has become so popular, some top investors worry that it’s inflating the value of many stocks.

There must be something in the air: A lot of investors right now are looking more closely at their asset allocations, and wondering whether they need to adjust their portfolios. Case in point, the Motley Fool Answers mailbag this month includes a question from a listener who has heard the assertion that Americans’ urge to diversify their way to “average,” match-the-market returns via index funds is creating a bubble in those funds' most popular holdings.

In this segment, hosts Alison Southwick and Robert Brokamp, and special guest Buck Hartzell, director of Investor Learning and Operations at The Motley Fool, address his concerns, discuss the ways a retail investor might want to factor the hidden risks of index fund allocations into their own strategies, and more.
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[kirankumarsukumar]

Experts are like index funds are not in a bubble but the stocks that index funds invest in are. #MindBlown

[loswag]

Everyone saying it won’t happen . That’s what they said about houses .

[cnucaptjoe]

The question is from "Michael", hm?

[akin]

Can't go wrong with Index Funds, unless the entire economy tanks like in 2008.
Vanguard VTSAX
Fidelity FZROZ
Charles Schwab SWPPX