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I don't doubt the flaws in both EMH and MPT (I already pointed out behavioral economics has challenged both), so I agree that when "MPT uses variance from the mean as a measure of risk", that is a serious flaw. However, I continue to disagree that MPT led to indexing.

"MPT suggests that we can minimize risk by diversifying across asset classes, which is what we attempt to do when we use indexes to diversify for us"

This is where we disagree on what an index does ... Or perhaps on the "why it does it" ... Or perhaps we're just referring to different indexes. I'm not sure I buy that an S&P 500 index is designed (causal) to provide diversification. Since it's market weighted, the diversification has limits. It may provide some in practice, but I wouldn't confuse correlation with causation.

If you read the articles that caused Bogle to start Vanguard, I maintain that indexes are based on a concept that trading is a loser's game (primarily due to costs)... This is a consequence of applying EMH to the real world; it is not about diversification.

Eugene Fama: "A weaker and more economically sensible version of the efficiency hypothesis says that prices reflect information to the point where the marginal benefits of acting on the information (the profits to be made) do not exceed the marginal costs".

This is supported by a more recent article from Fama:

Another counter-argument relates to sector indexes - which are definitely an index - but I would argue fail to provide diversification as the MPT would assert is necessary.
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