http://indexuniverse.com/component/content/article/3864.html

In it, you’ll see that the results are mixed either way, and that the more important question to ask is what your asset allocation should be like.

Sometimes, simple questions don’t come with simple answers.

I would also add that not a investment companies are created equal. Sadly, the company that’s handle 401k isn’t that great (in my opinion), AND all of their funds still have a load. The second I leave this job, I am taking rolling my money out, pronto!

However, there ARE good, reputable, actively managed fund companies out there. And yes, to a very large extent, I agree that that you’re essentially investing your money in a fund manager. However, it would also depend what type of investment and goals. All this should be available in the prospectus, and I think it’s important enough for all investors to pore through.

I didn’t quite catch the wording “long-term” the first time around, but if that is the case (your 401k), and assuming that you DO have a choice (and like me, you may not right now), but if you do have a choice, using, say, Vanguard’s Target Retirement Fund is actually pretty efficient. For one fund (of funds), you really can’t go wrong. But again, that’s for the long time, and that’s stating my bias as a Bogle fan.

My shorter-term investments are in either actively managed funds or individual stocks.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1105775

If after reading this, and other like it, you think you can consistently pick the winning active managed funds, then I wish you luck.