Wednesday/ active or passive fund management?

The Wall Street Journal reports that new data show that 82% of actively managed U.S. mutual funds trailed their respective benchmarks, even over 15 years (previous studies were for shorter time periods).  ‘The debate over whether passive management is as good or better than active management is a long-running and contentious one, but it has heated up in recent years. Active managers’ struggles to beat the market over recent years amid a long-term bull market in stocks have resulted in fee pressure, fund closings, business overhauls and mergers.
Investors have spoken with their wallets, turning to index-tracking funds in droves. Some $1.2 trillion has been withdrawn from actively managed U.S. stock funds since the start of 2007 through March, according to Morningstar Inc. Nearly the same amount, $1.1 trillion, has moved into passive U.S. stock funds over the same period’.

I see in the comments section that some readers say that this analysis is too simple. It ignores risk, and that one index fund does not make for a diversified portfolio.

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