The Rational Reminder Podcast · Thursday, August 6, 2026
Barry Ritholtz believes that passive investing, particularly through low-cost index funds, has historically outperformed most actively managed funds. He notes that while active management can have a role in specific situations, a passive approach is generally the most effective for long-term investor goals.
“However, historically, passive investing, particularly through low-cost index funds, has outperformed most actively managed funds over the long term. The reason for this is that active managers often struggle to consistently beat the market after accounting for fees and expenses. Index funds, on the other hand, provide broad market exposure at a very low cost, which allows investors to capture the market's returns over time.”
“But for the vast majority of investors, a passive approach is generally the most effective way to achieve their long-term financial goals.”