An interesting thing about indexing is that it is never the best investing strategy when we look back in time. There is always some other strategy that would have been better if only we had known to make the right decisions.
If only I had known the stock crash of 2008 and 2009 was coming. I could have sold out of stocks in advance and bought back at the bottom. But I didn’t know and I rode stocks down and back up again. Unfortunately, we can’t invest to make past returns. We can only invest and accept whatever the market brings in the future.
A common human failing is the tendency to think that past events were predictable. We don’t know what will happen over the next month, but after it happens we tend to think that it was obvious that things would unfold as they did. But it was not obvious beforehand.
For those who look back, there is always a strategy that beats indexing. But for those who look forward, the best bet for the vast majority of investors is investing in inexpensive broad indexes.