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Guess Who Just Turned 40 and Is Worth $3.6 Trillion?

When the first index fund came out, in 1976, “they said, ‘You want to buy all the dogs?’ They thought we were crazy,” one pioneer recalls. They aren’t laughing anymore.
Images Of Stock Boards As Topix Sinks Most Since August
Photographer: Yuriko Nakao/Bloomberg

The idea of an index fund seemed a bit of a joke at first. Indiscriminately buying hundreds of stocks, then accepting whatever return the market provided?

Aside from being impractical to build in the infancy of computers, an index fund was an insult to investors who prided themselves on picking the best stocks out of thousands. It sounded pretty cool to economics professors and a few of their financial geek students. Almost everyone else “thought we were crazy,” Oldrich Vasicek, a mathematician who worked on one of the first index products, once recalled in an interview .