Tongue In Cheek

The April-Foolishness of Active Investment Strategies

Index Fund Advisors Celebrates April 1st as “Index Funds Day”

IFA President Mark Hebner debunks the centuries old “You Can Beat the Market!” hoax

IRVINE, CA–(Marketwired – April 01, 2016) – Index Fund Advisors, a fee-only registered investment adviser and fiduciary wealth management firm based in Irvine, California, with $2.74 billion in assets under management, proclaimed Friday, April 1st “Index Funds Day” to shed light on the foolish behavior that fuels active investing and the errant notion that financial markets can somehow be ‘beaten.’

The purpose of “Index Funds Day” is to highlight the randomness of markets and the speculation of active investors that have negatively impacted active investing strategies since the first stock market crash in 1720 and the 45 crashes and bear markets that followed. In fact, there is no proven way to consistently predict the unknowable sequence of random news events that result in the random walk of the stock market prices.

The first “Index Funds Day” took place in 2004, and each year since, IFA has used April Fools’ Day to highlight the inherent foolishness that belies active investing.

Basically… It’s Gambling

“Active investing is basically gambling. With millions of willing buyers and sellers every day trading billions of shares, prices end up being very fair and therefore have an equal chance of going up or down in the very short term.

So active investing is just a gamble or a speculation, driven by emotional investment decisions primarily based on misinformation, fear and greed. On the other hand, a passive investing strategy utilizing index funds is rooted in the long term success of capitalism and supported by academic research, some of which won Nobel prizes,” said Mark Hebner, President of Index Fund Advisors, Inc. “At IFA, we work tirelessly to educate investors, with the intention of breaking the addiction that active investors have to trying to beat the fair returns that markets already offer.”

The purpose... is to highlight the randomness of markets and the speculation of active investors that have negatively impacted active investing strategies

Hebner is using this April Fools’ Day to highlight the stark differences between active and passive investing. He points out that decades of peer-reviewed research by academics and Nobel laureates continue to demonstrate that buying, holding, rebalancing, tax loss harvesting and glide pathing a tax-efficient, low cost, risk appropriate and diversified portfolio of index funds will improve the tax efficiency and expected return of their investments.

This passive investing strategy is the practical application and implementation of the Nobel Prize winning research of Eugene Fama, Harry Markowitz, William Sharpe and Paul Samuelson. This passive investing is in direct contrast to the failed active investing strategies of picking stocks, times, managers or styles. Very rarely do active investors significantly outperform their appropriate benchmarks after luck, risk and costs are taken into account, including sales commissions, 12b-1 fees, expense ratios, transaction costs, taxes and other expenses.




To speak with Mark Hebner, President of IFA about the folly of seeking alpha and of active investing, please reach out to
To learn more about why trying to beat the market is nothing more than the world’s biggest hoax played at the investors, please visit
To read more about “Index Funds Day,” please visit
About Index Fund Advisors
Index Fund Advisors, Inc. (IFA) is a fee-only registered investment adviser and provider of fiduciary wealth services. IFA’s investment strategy focuses on risk-appropriate, globally diversified index fund portfolios for high net worth individuals, institutions and corporate and nonprofit retirement plans. Founded in 1999, and headquartered in Irvine, CA, IFA provides advice to over 2,100 clients throughout the country and manages $2.74 billion in assets under management as of December 31, 2015. For more information, please visit our website at