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<p>Foreword vii</p> <p>Preface ix</p> <p>Acknowledgments xix</p> <p><b>Part I The Active Versus Passive Debate 1</b></p> <p>Chapter 1 Framing the Debate 3</p> <p>Chapter 2 Early Performance Studies 15</p> <p>Chapter 3 The Birth of Index Funds 33</p> <p>Chapter 4 Advances in Fund Analysis 41</p> <p>Chapter 5 Passive Choices Expand 61</p> <p>Chapter 6 Portfolios of Mutual Funds 79</p> <p><b>Part II Chasing Alpha and Changing Behavior 93</b></p> <p>Chapter 7 The Futility of Seeking Alpha 95</p> <p>Chapter 8 Active and Passive Asset Allocation 117</p> <p>Chapter 9 Changing Investor Behavior 133</p> <p><b>Part III The Case For Passive Investing 155</b></p> <p>Chapter 10 The Passive Management Process 157</p> <p>Chapter 11 The Passive Case for Individual Investors 175</p> <p>Chapter 12 The Passive Case for Charities and Personal Trusts 193</p> <p>Chapter 13 The Passive Case for Pension Funds 211</p> <p>Chapter 14 The Passive Case for Advisors 221</p> <p>Glossary 233</p> <p>Notes 245</p> <p>About the Author 253</p> <p>Index 255</p>

<p><b>RICHARD A. FERRI</b> is the founder of the investment firm Portfolio Solutions^® and a <i>Forbes</i> writer. Portfolio Solutions manages nearly $1 billion in separate accounts for high-net-worth individuals, families, non-profit organizations, and corporate pension plans. Ferri has written or cowritten six investment books, including the Wiley titles <i>The ETF Book</i> and <i>The Bogleheads’ Guide to Retirement Planning.</i> He earned a bachelor of science in business administration from the University of Rhode Island and a master of science in finance from Walsh College. Ferri is also a CFA Charterholder as designated by the CFA Institute, a global association of investment professionals. For more information, visit www.RickFerri.com and www.PortfolioSolutions.com.</p>

<p>Investing is serious business and mistakes cost money. Whether you’re acting for yourself or as a fiduciary for others, your aim should always be to reduce mistakes and increase the probability that the portfolio you’re responsible for succeeds in achieving its objective.</p> <p>Nobody understands this better than author Richard Ferri, an investment expert and founder of the advisory firm Portfolio Solutions^®. Now, in <i>The Power of Passive Investing</i>, he reveals how this proven strategy can effectively put your portfolio in a better position to gain its fair share of market returns. This approach is done with a strong understanding and commitment to low-cost, passively managed index funds and exchange-traded funds (ETFs)—which, today, span almost every asset class and style, including U.S. and foreign equity funds, bond funds, commodities funds, and even currencies. <p>Filled with in-depth insights and expert advice, this reliable resource offers practical guidance on creating a sound, long-term investment plan—within a framework of controlled risk—and helps clarify and quantify the purpose of investing along the way. Containing dozens of historical studies covering several decades and financial markets, it will clearly show you how passive investors who buy the market will capture better results than most active investors who try to beat the market. <p>Divided into three comprehensive parts, <i>The Power of Passive Investing:</i> <ul><li>Tracks the passive versus active debate from its beginnings early in the twentieth century to today and explores the advantages of investing in individual index funds and ETFs over individual actively managed funds</li> <li> Focuses on portfolio decisions and investor behavior and looks at some of the reasons more people haven’t put the power of passive investing to use yet</li> <li> Discusses the purpose of investment policy and makes the case for passive investing in terms of four different groups: individual investors and their families; trustees of charities and private accounts; pension trustees and those who select investment options for employer-sponsored pension plans; and professional investment advisors</li></ul> <p>Attempting to earn above-market returns with a portfolio of actively managed funds is both a waste of time and money. A well-designed, passive investment approach that utilizes index funds and ETFs has the highest probability of meeting your financial goals and is the most prudent choice for your money. <I>The Power of Passive Investing</I> will show you why this is true as well as how this approach can work for you.

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