Today's Wall Street Journal has an article by Jonathan Clements titled "Are Index Fund Investors Smarter? The answer seems to be "yes." These are excerpts:
My link did not work more than once. Try Goggling the title to read the entire article."Index funds don't just outperform most actively managed mutual funds. They also make more money for investors."
"It seems investors behave more sensibly when they bypass actively managed funds, which seek to beat the market, and instead purchase index funds."
"I asked Chicago Investment research firm Morningstar to analyze index funds and actively managed funds in 10 major stock-fund categories. -- For six of the 10 categories the 10-year dollar weighted returns for index funds were better than the average total return for those funds. What about active funds? There wasn't a single instance."
"Why have index-fund investors behaved more sensibly? -- I suspect it is less about greater intelligence and more about greater conviction. When you buy an index fund, your only worry is the market's performance. But when you buy an active fund, you have to worry about both the market's direction and your fund's performance relative to the market."
Best wishes.
Taylor