What if (hypothetically) a large majority of investors started investing into index funds? For example, an enormous amount of retail investors are won over by this bet and believe passive investment in index funds will always lead to higher returns. Are there any ramifications of this situation that may cause inefficiencies where investing in hedge funds may lead to better returns over a period of decades? Should we all just dump our money into SPY and VTI now that Warren Buffett has won this bet? Or maybe Ted was just unlucky to take this bet during successive rounds of QE that pushed interest rates to historic lows and perhaps artificially turned more risky assets into the only vehicles for returns?