The Unassailable Logic of Passive Investing in 2025
Index funds have dismantled Wall Street’s myth that complexity equals superior returns. The data is unequivocal: passive strategies consistently outperform active management over time. By tracking benchmarks like the S&P 500, these vehicles eliminate emotional decision-making and excessive fees—the twin killers of compounding.
The revolution isn’t technological but ideological. Investors are waking up to the reality that markets are efficient enough to make stock-picking a loser’s game. Why pay hedge-fund fees for beta exposure when you can buy the entire market for 3 basis points?
This isn’t just theory. The proof lives in the decade-long underperformance of 85% of active managers against their benchmarks. Indexing turns the casino into a wealth-creation engine by leveraging the only free lunch in finance: diversification.
