Here’s an interesting article about the virtues of passive investing but also argues that a somewhat active approach is the best. The author concludes:
Active management of stock market investments certainly may reduce volatility of investment returns and I would not be in the business if I did not believe superior returns are also possible, but when you talk with any investment advisor make sure you are confident that his or her answer to the superiority of active management over passive management makes sense to you.
However, I think if you read the article you’ll see that the author’s “argument” for being a “diversified mutual fund investor” instead of investing in index funds is non existent. He says it’s better, but all the stats he presents seem to suggest otherwise. Here’s what I wrote before about index fund investing.