Approximately 80-90% of all public fund managers are not able to match the performance of a market index after deducting all costs in the long term.
Hence, index investors do not even start to try and achieve an above-average performance with financial analysis methods. They focus on accurate asset allocation (the subdivision of investments into different categories) and implement their structure with the help of index funds in a cost-effective way.
Index funds reflect a market index that represents a certain investment class. In general, their costs are much lower than the cost of actively managed investment funds.
While the financial analysis methods (value, growth) aim to achieve a better performance than the market in the longer term, index investors largely want to avoid a subnormal performance.
Indexation as a long-term strategy is particularly appropriate for investors who do not want to rely on the quality of analytical capacities and methods for their investment success.