|
Not surprising that indexing hasn't worked as well recently since the traditional indexing principles are weighted towards large caps which haven't done as well recently.
That being said, I think the real debate on active vs. passive is less on large caps which are highly transparent and more in the the international / emerging markets which aren't as transparent as the US but necessary for the investor to have increasing exposure to -- since that's where most of the economic growth will occur.
More important than the active vs passive is getting the asset allocation right IMHO.
I think many individual investors are 5-10 years behind in thinking about their asset allocation and looking in rear view mirrors than looking ahead. Harvard University's endowment allocation to US equities has shrunk from 80% (1980) to 12% (this last year). Those guys are pros with an outstanding track record of managing billions. And in times like these getting a more robust asset allocation really protects from negative volatility.
__________________
Gryffindor
|