Investing

Why Active Management Comes Up Short

Investors finally understand that most of them can only match the market, not beat it.

Sitting around has its advantages.

Photographer: Peter Stackpole/Life Picture collection/getty images

We all know that indexing is cheaper than active management, in which a fund manager selects specific assets for investment. But the question is why has passive investing been so successful during the past few years? Asked differently, why has active management -- especially since the financial crisis -- had such a dismal run?

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