Active trading

(A) investors, overall, will necessarily earn an average return, minus costs they incur; (b) Passive and index investors, through their very inactivity, will earn that average minus costs that are very low; (c) With that group earning average returns, so must the remaining group—the active investors. But this group will incur high transaction, management, and advisory costs. Therefore, the active investors will have their returns diminished by a far greater percentage than will their inactive brethren. That means that the passive group—the “know-nothings”—must win.