It's true year after year after year. The stock market is a relatively straightforward exhange, based on the general premise that for every buyer of stocks, there must be a seller willing to sell. The direction and movement of the market, on the other hand, is highly unpredictable. Investment managers, agents and brokers use a variety of complex models, theories and analyses to try to pick stocks or funds that will predict and ultimately beat the market. In a recent Dallas Morning News article, Scott Burns extracted information from Morningstar's Prinipia Pro showing dramatic performance gaps between an index fund and other investments over 1 to15 year periods.
Index funds seem to be a very good bet for most people.
Index funds are simply funds that purchase the same stocks in the same proportions as the benchmark or index they are attempting to mirror. While the media often uses this as the performance benchmark, there are more appropriate benchmarks for other investments. For example, the Russell 2000 is a similar index of small stocks. A myriad of other indexes are used for other types of investments. And indexing is proving time and again that it is more effective than active fund management.