Index Funds Will Be Fine Confronting Cruel Markets

Every now and again, I come across a point of view that is so wrongheaded and misinformed that I am compelled to push back against it. The claim that passively managed index funds will blow up in the next stock market correction is exactly such a viewpoint -- nevermind that many of these claims and concerns have already been debunked.1

Just by way of background: The author who made this assertion is British, and low-cost, passive index funds have a much shorter history and track record there than in the U.S. Large U.S. providers of index funds such as Vanguard Group, BlackRock Inc. and State Street Corp. and others have a well-established history and the impact on markets and investor behavior is reasonably well-documented. I suppose it is natural to fear what we do not fully understand. Perhaps the antipathy to index funds will evolve based on time and experience.