Indexing Is the Go-to Strategy for Taxpayers

An active manager can win if there's some loser on the other side of the trade. The stocks that are added to the index generally underperformed by an average of 600 to 1,000 basis points in their first year. Stocks that are deleted from the index generally outperform by 8 to 1,100 basis points. That's a spread of nearly 2,000 basis Points.

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