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The free ride for the mutual funds, which has been more of a magic carpet without bumps than a simple toll-free experience, had to come to an end sometime.

Why is it happening now? There have been plenty of tough times in the past when we viewed giving these funds money when they were down as an article of faith, if not brilliance.

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I have a theory. These funds made you so much money from 1996 to 1999 that anything short of forgiveness and love, if they stumbled, seemed harsh and ungrateful. Now, though, we are running into a hammering that is so extreme that we are spoiling the meat of those gains. The gains of 1999 and now much of the gains of 1998 are being repealed. People are beginning to wonder whether they shouldn't preserve the gains of 1997 and 1996 by pulling out now before they are gone.

I wish I knew the answer. I'm nervous, as many of these managers have never seen a downturn or a situation where no companies in their universes are going to exceed earnings estimates. So much money is run on an earnings-surprise model that no longer works that I fear the people at the helms of these funds simply don't know what they're doing. They don't know how to adjust to a new, more cloudy, world. They weren't investing in the '80s, when you had to buy stocks on the basis of book value and cash flow and relative cheapness vs. other stocks. Their expertise has nothing to do with picking stocks with catalysts that could drive them forward.

Heck, many of them don't even know how to play a down cycle. They can't shift to the coal stocks. They can't start buying Fluor (FLR:NYSE - news - boards) and Foster Wheeler (FWC:NYSE - news - boards).

What compounds the problem are the twin fears of missing the rally and jumping ship after a particularly bad stretch of one methodology. We may have broken the habit of buying the dips, but we certainly haven't cured ourselves of the need to be in for the big run back to Nasdaq 5000, 4000, 3000 or even 2000! We're so conditioned to condemning those who change stripes in order to make money -- "I didn't pick you to invest in drug stocks, you're supposed to be investing in hardware and software, you silly man" -- that we can't now say, "You know what, Jack Bogle had a good point with those index funds at Vanguard."

That's why I'm telling people: Look, I know I can't cure your fears of missing the rally and I can't undo the brainwashing of never firing a manager because his "methodology" is now defunct for fear that the methodology comes back to life after you leave it. I can, however, tell you that with new money, I think an index fund can do much better than most of your existing managers. And it's not for what you're thinking.

It is because the S&P 500 is about as actively managed as you can get out of a supposedly static group of stocks. Take this week's decision by McGraw-Hill to drop Briggs & Stratton (BGG:NYSE - news - boards), an underperformer in the averages for about as long as there have been averages, and replace that with Mirant (MIR:NYSE - news - boards), the energy provider and electricity marketer, at the close on April 2.

This kind of trade is emblematic of the entire S&P process. It takes out a once-hot maker of engines used in things like lawn mowers and adds something that is now hot enough to be the largest position in the Munder New Power fund, the benchmark of flavor-of-the-month funds.