For some interesting portfolio ideas largely based on the indexing approach, check out "Three Simple Portfolios" by Bob Frick, senior editor of Kiplinger's Personal Finance.
Bob Frick's investment advice strongly echoes that of John Bogle:
You can beat the great majority of investment professionals by employing simple strategies that use low-cost index funds. Index funds track a broad swath of the stock market, such as big-company stocks, small-company stocks, emerging-markets stocks, and so on.
Some of the biggest brains in the world of finance - from Nobel Prize-winning professors, such as William F. Sharpe, to, arguably, the greatest money manager of our time, Warren Buffett - advocate a "passive" style of investing epitomized by index funds.
The evidence seems to back up these intellectual heavyweights. Over the past 15 years through December 31, Standard & Poor's 500-stock index performed better than 71% of mutual fund managers who specialize in the stocks of large U.S. companies.
How well have you done by picking managers who actively buy and sell securities? It's true that some fund managers can beat their relevant index. But as Princeton professor Burton Malkiel asserts in his famous book, A Random Walk Down Wall Street, there's no good way to "find such skill before it has been demonstrated over time."
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