Markets are supposedly efficient because people pick to buy companies that are good value for the profits they generate and sell companies if they become less valuable.
If people are buying index funds automatically in retirement accounts they are not making this judgement and thus all stocks in index funds are selling at a premium because of this automatic buying pressure. If enough people do this there is potential for the stocks in index funds to be overvalued.
If people are buying index funds automatically in retirement accounts they are not making this judgement and thus all stocks in index funds are selling at a premium because of this automatic buying pressure. If enough people do this there is potential for the stocks in index funds to be overvalued.