[basiccalendar74]

Passive investing is not an issue, but the default bias towards large cap equities like SP500, Nasdaq100. Passive investing through total market ETFs (like VTI) maintains the status quo.

For example, if they are only two companies, say with 1T and 4T market cap. If one invests 5M into a total market ETF, 1M is allocated to company A and 4M to company B. But since company B is 4x bigger than company A, the upward price pressure is the same for both companies.

[jo909]

The money you buy stock with l goes to the former/selling shareholder, which is most often not the company. It is possible the company is holding its own stock and selling for cash, or emitting new shares for cash, but that is much much rarer.

[basiccalendar74]

by 'allocated', I mean allocated during the purchase decision. not that money is sent to respective company.