The Death of Indexing

Hayden, Vern C.
June 2004
Journal of Financial Planning;Jun2004, Vol. 17 Issue 6, p38
Academic Journal
The article outlines some arguments against indexing. In the March 15, 2004 issue of Investment News, the headline was The Indexing King Trumps Itself. The second paragraph reads, Over the long haul, investors in actively managed funds run by the Vanguard Group Inc. would have earned higher returns--and take less risk--than those who put their money into the company's famed index funds. That is one conclusion of a study soon to be published in the summer 2004 issue of the Journal of Portfolio Management. Anyone managing money should have read Charles D. Ellis' classic book, Winning the Loser's Game. The point of that book is that stock picking is a losing game and the most useful function of professional investment advice is in selecting an appropriate asset allocation consistent with the needs, circumstances and preferences of different investors--not in trading from one stock to another on the basis of perceived differences in valuation. The American Funds are not the only ones to beat the indexes. Last year, Morningstar gave out two lifetime achievement awards. One was to Ralph Wanger, manager of the Acorn Fund since 1970. He substantially bet his benchmark index over that period of time. The other award was given to Jean Marie Eveillard, of First Eagle Global. He has managed this fund since January 1, 1979.


Related Articles

  • BI Stock Index.  // Business Insurance;8/30/2004, Vol. 38 Issue 35, p19 

    This article presents up-to-the-minute data for all 87 companies that comprise the BI Stock Index. It can be found at www.businessinsurance.com. It also presents percentage change of BI Stock index vs. key indicators BI Stock Index.

  • If You Like to Bet Big, Here Come Hot-Rod Index Funds. Creswell, Julie // Fortune;9/7/1998, Vol. 138 Issue 5, p182 

    Focuses on three United States index-fund families known as hot-rod funds. The funds' use of futures and options to track or to move inversely to indexes like the Standard & Poor's 500 stock index; Their advantages and drawbacks; Details of Rydex Series Trust Funds; Potomac Funds and ProFunds.

  • Bang on Track. Alvares, Clifford // Business Today;2/10/2008, Vol. 17 Issue 3, p142 

    The article offers information on the significance of index funds as an investment avenue. It reports that index funds allow to buy the market at its current levels by being low priced and through tracking the broad diversity of the stocks and sectors in the index. It cites that most of the...

  • Does Indexing Still Work? Quinn, Jane Bryant; Ehrenfeld, Temma // Newsweek;9/1/2003, Vol. 142 Issue 9, p39 

    Index mutual funds behave no better, but no worse, than any other mutual fund when the market falls. "Managed funds" are run by stock pickers who make bets on which stocks will do the best. But "index funds" run on autopilot, tracking the rise and fall of a particular market index. If index...

  • STOCK REPORT.  // Waste News;10/27/2008, Vol. 14 Issue 13, p22 

    Several charts are presented that depict various economic indicators in the U.S., including the stock index, the Calvert social index fund and the Dow Jones industrial average.

  • Comments and Discussion. Greenspan, Alan; Shiskin, Julius; Early, John // Brookings Papers on Economic Activity;1973, Issue 2, p376 

    Presents comments and discussion on an article by Saul Hymans on composite leading indicators. Discussion of various parts of the paper; Criticism.

  • HIGHLIGHTS REEL.  // Crain's New York Business;6/25/2007, Vol. 23 Issue 26, p4 

    Several charts are presented that list of company in New York Index for December 22, 2006 to June 22, 2007, including on the weekly index, gaining companies, and losing companies.

  • MARKET INDEXES: Russell 1000 + Russell 2000 = Russell 3000.  // Pensions & Investments;8/23/2004, Vol. 32 Issue 17, p22 

    The article presents information on stock price indexes of various business enterprises.

  • WWD Composite Stock Index vs. S&P 500.  // WWD: Women's Wear Daily;6/21/2004, Vol. 187 Issue 128, p14 

    Presents a graphical comparison between the WWD Composite Stock Index and Standard & Poor's 500 stock price index.


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics