Are Index Funds Communist?
Ask most people how they invest and they&#x27;ll tell you that they are passive investors, they only buy very diversified Vanguard ETF&#x27;s with low fees.<p>This makes sense, the US, Canadian and most European stock markets have performed well over the past 100 years.<p>Here is a though experiment....<p><a href="https:&#x2F;&#x2F;si.wsj.net&#x2F;public&#x2F;resources&#x2F;images&#x2F;BN-GE653_nikkei_G_20141229024237.jpg" rel="nofollow">https:&#x2F;&#x2F;si.wsj.net&#x2F;public&#x2F;resources&#x2F;images&#x2F;BN-GE653_nikkei_G...</a><p>This is a chart of the Japanese stock market&#x27;s returns over the past 25ish years.  As you can see it&#x27;s flat.<p>Japan stock market has been in a low interest rate, low growth regime for a long time now.  You&#x27;ll notice that its now back to where it was roughly in 1988.<p>What should people invest in when you are in a zero interest rate and zero growth stock market?<p>Bonds won&#x27;t pay much in low interest rate environments and I&#x27;d&#x2F;expect dividends to also be relatively paltry.<p>This is one area where I believe that active investing, specifically hedge funds, or other &quot;smart beta&quot; funds can be a win over passive investing.  Though I might be biased.....<p>What other strategies can someone use in a stagnant growth and low interest rate environment?<p>Thoughts??