By Gary Alexander
Befitting the soporific market action so far this summer, we have become a passive army of do-nothing, know-nothing investors. According to MarketWatch on September 4, eight of the largest 10 mutual funds are stock index funds (the other two being money market funds, which are also passive). Eight of the top 10 largest funds are run by Vanguard, the people that invented index funds 40 years ago.
On August 31, 1976, Vanguard’s Jack Bogle floated the idea of an S&P 500 index fund for the first time. The response was underwhelming, at $11.3 million in assets, not even a tenth of Bogle’s $150 million target. The growth was snail-like at first, growing to only $511 million by 1985 at the start of the 1982-99 mega-bull market. But today, according to Jason Zweig (in “Happy Birthday to the Index Fund,” Wall Street Journal, September 1, 2016), “the Vanguard…
