Passively owning “the whole market” has become a popular investment strategy, and for a good reason. It is widely reported that the average investor dramatically underperforms the overall market. Using an index fund, and just trying to match the market, eliminates the uncertainty of deciding which investment idea might be the best. It also generally comes with low costs. For the average investor, it makes sense.

But there is a benefit to including an actively-managed investment strategy as part of an overall portfolio.