Index Funds Aren’t Boring. You’re Just Addicted to Feeling Smart

Why simple investing feels unsatisfying — and why that’s the point

Key takeaways:

• Index funds aren’t boring; they’re a recipe for predictable growth with a high probability for success.

• The more complex your investments, the more chances there are that something can go wrong.

• A basic index fund can often outperform most hedge funds, private equity funds, and active managers.

Here’s how it usually starts: you open a Roth IRA, you Google “what to invest in,” and somewhere along the way, you encounter some research by Vanguard and end up with a total stock market index fund. You feel good, and you should!

And then, six months later, it feels boring. You subscribe to a few investment newsletters with charts that you don’t exactly understand but generally get the gist of. You start wondering if you should be doing more, like buying individual stocks, getting in on private credit, maybe gold, maybe real estate. Or maybe whatever that thing your coworker’s husband is doing with AI and shipping containers.

Getting bored with index funds is like getting bored with drinking water. Eventually, someone with a podcast will try to sell you structured notes with adaptogens.

But you don’t need access to private equity. You don’t need a position in gold. You don’t need to chase yield in private credit or pick a biotech fund that promises “asymmetric upside.” You need a system that works when you’re busy, distracted, and not in the mood to think about markets at all.

That’s what public markets are for. And for most investors, they’re more than sufficient. An index fund simply owns a broad slice of the market at once, hundreds or even thousands of companies across industries, so you’re not betting on one winner, you’re betting on growth as a whole. Want to invest in AI? In biotech? In renewable energy? Great. You can do all of that by buying one simple fund.

Sure, it’s tempting to chase higher returns. A 30 percent return at the end of the year could move you closer to your goals faster—early retirement, financial freedom, whatever version of “work optional” you’re aiming for. But higher returns always come with higher risk. And while you might think you can stomach that risk, the market has a way of testing your conviction when it’s least convenient. There’s a difference between your mental capacity for risk and your financial ability to take it. If you’re young, time is on your side, and that cushions some of the downside. But if you’re not, or if your income is tight, or your timeline is short, a big loss doesn’t just sting. It can change your whole plan and ensure that you cannot afford to fly first class in retirement. Risk only works for you when you can afford to lose money.

And if you don’t get used to the slow, steady progress of so-called boring investing when you’re young, it’s going to be much harder to shift into it later. Because eventually, the window for big bets closes. You wake up at 42 or 57 and realize you don’t have time for something that promises “high upside” to maybe work out. But by then, you’re not just facing market risk—you’re facing regret, urgency, and a shorter runway. That’s when people start reaching for Hail Mary strategies they don’t understand, because they’re trying to make up for lost time. And frankly, that’s also when people get scammed. Maybe they’re not desperate, but they’re more open to shortcuts. More willing to believe in something that promises to catch them up. The better move is not to lose the time in the first place.

Still, once people start learning about investing, many feel pulled toward complexity. A basic index fund strategy starts to sound too dull. Too passive. The moment you know a little bit about markets—a rate hike here, an emerging technology there—it starts to feel like you should be doing more. You want your portfolio to reflect that awareness.

If you’re smart enough to follow what’s going on, shouldn’t you be using that insight?

Alternatives Look Sophisticated. That Doesn’t Mean They’re Necessary.

When people talk about “alternative investments,” they usually mean anything outside publicly traded stocks and bonds. That includes private equity, venture capital, hedge funds, real estate funds, commodities like gold, and increasingly, private credit. The pitch is that these assets are more sophisticated, less correlated with the stock market, and potentially more lucrative.

Private credit, in particular, seems like it’s everywhere in my industry right now. At its core, private credit is exactly what it sounds like. Instead of lending money through public bond markets or traditional banks, investors pool capital to lend directly to companies. These loans are negotiated privately, often to mid-sized businesses that want flexibility or can’t easily access public markets. In exchange, lenders get higher interest rates.

That’s why it’s having a moment. As interest rates rose, borrowing got more expensive. Private lenders stepped in. Yields look attractive compared to traditional bonds, and fund managers are eager to market that income to investors who are tired of volatility and frankly think they are smarter than the boring old stock market.

What often gets glossed over in private credit is what you’re giving up. Private credit is often illiquid. You usually can’t sell when you want. Also, the loans are hard to value because they don’t trade on open markets. So the risk is real, even if the marketing language emphasizes stability. And if something goes wrong, recoveries can take time, or never fully materialize.

Gold sits in the alternative bucket for different reasons. It’s often described as a hedge against inflation or chaos. But gold doesn’t produce income. It doesn’t compound. Over long periods, it has lagged stocks by a wide margin. It can have a role in a portfolio as a diversifier, but it’s not a growth engine.

None of these assets I mentioned are inherently bad. For very wealthy investors with long time horizons, limited liquidity needs, and teams to evaluate risk, alternatives can make sense. But for most people, these alternatives solve problems they don’t actually have. Alts are just itch-scratchers.

Public markets already give you growth, income, liquidity, and transparency. You can rebalance. You can exit. You can see what you own and what it’s worth. You don’t need a special invitation or a minimum buy-in to access them.

Alternatives often get marketed as a sign that you’ve graduated to a higher level of investing. In reality, they’re just different tools. And unless you have a clear reason to use them, complexity isn’t sophistication. It’s just complexity.

Public Markets Are Already Doing the Job

You don’t need alternatives to grow your wealth. Over the past decade, the S&P 500 returned roughly 13 percent annually. That includes inflation shocks, interest rate hikes, a pandemic, and a banking mini-crisis. A basic index fund tracking that performance would have outperformed most hedge funds, private equity funds, and active managers, with better liquidity, lower fees, and far fewer decisions to get wrong.

Here are the annualized total returns for the S&P 500 Total Return Index (SPXTR) for each year from 2016 to 2025, as well as the average annualized return for that period:

I’m showing this because public markets already deliver what most people are looking for: long-term compound growth with a high probability of success, assuming you can stay invested in it over a long period of time.

Curiosity Is Healthy. Ego Gets Expensive.

Learning more about markets is great. It builds confidence and fluency. But there’s a difference between understanding how the machine works and needing to outsmart it.

The impulse to optimize often comes from a deeper discomfort. Simplicity feels naive. You don’t want to be the person who just “set it and forgot it” while other people are optimizing allocations and finding inefficiencies. So you tinker. You shift things around. You want your portfolio to look like it belongs to someone who knows what they’re doing.

But markets don’t reward that instinct. They don’t pay you for knowing more. They pay you for staying invested and letting time do the work.

The more complexity you introduce, the more opportunities you create to mess things up.

Let It Feel Boring

A good investment plan doesn’t care if you’re paying attention. It doesn’t care if you’ve been reading about AI chipmakers or global debt levels or the future of semiconductors. A diversified index fund is doing its job whether or not you’re doing yours. It doesn’t rely on your energy, your conviction, or your ability to predict the future. It just needs you to stay out of your own way.

If your portfolio feels a little dull, that’s a good sign. Predictability is not a flaw. It’s a feature.

Save your intellect for the parts of life that reward originality—your business, your creative work, your relationships. Investing doesn’t need to be a performance. It needs to be repeatable.

Parting Shot: If you’re bored, you’re probably doing it right.