Sorry, Mr. Bogle, But I Respectfully Disagree. Strongly

Jack Bogle, the legendary founder of Vanguard and a longtime champion of index fund investing, was on financial television recently making the case that the arguments for index investing hold just as much for bonds as stocks. The academic literature is replete with studies making the case against active management. At the core of the argument is some basic math: In sum, the performance of all investors aggregates to the performance of the markets. For every winner, there must be some loser who is subsidizing the winner’s gains. Throw in fees, and the average net return above the market for active investors is negative.