They will be the poorer for it. For whatever reason, investors decided that they wanted to buy large company US stocks. As we might have expected, the index funds shined. The index funds beat most of the large company actively managed funds by a resounding margin. We would have expected this result because it s very hard to beat the benchmark when any appropriate comparison is made.
Active management is a failed concept.
So far, so good. Here s where things begin to get a little strange. Many investors made the wrong mental jumps. Plenty of pundits weighed in that investing anywhere else was a waste of time. Dead wrong, but it became the accepted wisdom.