In an article in the New York Times, Burton G. Malkiel, a professor of economics at Princeton University, argues that everyone (including the wealthy) have the best chance of investing success with index funds.

He says that the wealthy sometimes think they need to get more agressive with hedge funds, real estate, and hot stock tips when in reality, the best course is just to take a passive approach in a highly diversified index funds.

Of course the detractors say this is wrong because there are good stocks out there that outperform the market. The problem is that these investments are very difficult to find. Most investors have trouble outperforming the market. A small percentage of people who outperform the market know what they are doing and the rest get lucky with a couple hot stock picks.

My personal opinion is that I don't have the time to know everything about the stock market. Even people who have the time to spend all day looking at stats still don't know most of the data that influences the markets. It is a really tough game to play. I know that I can't play it in a low risk fashion unless I use index funds to invest my money.

I like to use index funds because of the extrememly low fees. The less money being taken by active management, the more money that is left for me. I don't think that active management is worth the extra fees if most active managers have trouble beating the market.

Another reason why I use index funds is because I don't need to hit a hime run in the markets. I just need to see positive returns as I continue to invest every month.