Passive Index Investors Beware

Great article by Henrly Blodget that makes a good case for why a passive investment approach is a risky proposition over the next few years.  The premise is that both corporate profit margins and valuations are elevated currently and since both measures tend to revert to the mean over the long-term, it's tough to see US markets achieving their historical annualized return aveage of 10%.  The article supports our belief that stock markets will favor active investors over passive investors for the next several years.   Definately worth a read.