Finding the Active in Low-Cost Passive Investing

I have long defended the idea that a substantial portion of your investable assets should be in a portfolio of low-cost, global, passive indexes. My primary beef with much of the active universe (especially hedge funds and private equity, and the pensions and endowments that love them) is the one-two punch of high expenses and underperformance. And if you are going to pick stocks as an active investor, then be active -- don’t be a closet indexer. Otherwise, you might as well buy a low-cost index fund and be done with it.

There have been some legitimate criticisms raised about the huge and sudden rise of indexing, as well as some foolish critiques. No, passive investing is not "worse than Marxism."1500394373336 No, Vanguard Group Inc. isn't a "nonprofit socialist enterprise." Passive isn't a bubble; it isn't destroying price discovery; it isn't hurting the economy, ruining the market or investing; it's not even (yet) putting security lawyers out of work.