Index Investing Has a Built-In Major Flaw

Passively managed index funds are hailed as a great and inexpensive way for investors to get positive returns over a long time horizon. Multiple studies show that for regular folks, holding index funds is a far better strategy than trying to beat the market. But these funds break the first rule of investing: When new stocks are added to an index, or when stocks are removed, the funds essentially buy high and sell low. They have no choice.