The Index Revolution: Why Investors Should Join It Now

Charles D. Ellis, Burton G. Malkiel (Foreword by)



The evidence-based approach to a more worthwhile portfolio

The Index Revolution argues that active investing is a loser's game, and that a passive approach is more profitable in today's market. By adjusting your portfolio asset weights to match a performance index, you consistently earn higher rates of returns and come out on top in the long run. This book explains why, and describes how individual investors can take advantage of indexing to make their portfolio stronger and more profitable. By indexing investment operations at a very low cost, and trusting that active professionals have set securities prices as correctly as possible, you will achieve better long-term results than those who look down on passive approaches while following outdated advice that no longer works.

"Beating the market" is much harder than it used to be, and investors who continue to approach the market with that mindset populate the rolls of market losers time and time again. This book explains why indexing is the preferred approach in the current investment climate, and destroys the popular perception of passive investing as a weak market strategy.

• Structure your portfolio to perform better over the long term
• Trust in the pricing and earn higher rates of return
• Learn why a passive approach is more consistent and worthwhile
• Ignore overblown, outdated advice that is doomed to disappoint

All great investors share a common secret to success: rational decision-making based on objective information. The Index Revolution shows you a more rational approach to the market for a more profitable portfolio.

Table of Contents

Foreword
Introduction
Acknowledgments

Part One Over 50 Years of Learning to Index
1 My Half-Century Odyssey

Part Two The 10 Good Reasons to Index
2 The Stock Markets of the World Have Changed Extraordinarily
3 Indexing Outperforms Active Investing
4 Low Fees Are an Important Reason to Index
5 Indexing Makes It Much Easier to Focus on Your Most Important Investment Decisions
6 Your Taxes Are Lower When You Index
7 Indexing Saves Operational Costs
8 Indexing Makes Most Investment Risks Easier to Live With
9 Indexing Avoids “Manager Risk”
10 Indexing Helps You Avoid Costly Troubles with Mr. Market
11 You Have Much Better Things to Do with Your Time
12 Experts Agree Most Investors Should Index

Appendix A: How About “Smart Beta”?
Appendix B: How to Get Started with Indexing
Appendix C: How Index Funds Are Managed
About the Author

Index