Red Sox or Yankees? Mitt Romney or Hillary Clinton? Sanjaya or one of the talented singers? These are the important issues of the day that normal people debate. Then there are people like us writers at BloggingStocks who ponder questions like "Traditional index funds or fundamental index funds?" Marketwatch's Paul Farrell wrote an excellent piece discussing this very debate, and now I'm going to give you my take on it.

First of all, some quick definitions:

Index Fund: Pioneered by John Bogle, these are mutual funds (or, ETFs) which seek to closely mimic the performance of a certain index, such as the S&P 500 or the Wilshire 5000 by simply owning the stocks that are in that group. Characterized by low expense ratios and minuscule turnover, index funds outperformed the vast majority of actively managed funds over the long-term, and I believe that they have a place in the retirement portfolio of every single working man and woman in America.

Fundamental Index Funds: This is a new hybrid of sorts, combining elements of index funds and active management. Basically, people have noticed that stocks with certain quantitative principles outperform over the long-term: For instance, stocks with low price-book ratios, low price-earnings ratios, high yields, etc. Other fundamental index funds are cap-weighted which means that stocks with larger market caps are represented more heavily than stocks with smaller market caps, as opposed to weighting based on share price.

And now, my opinion: I say you stick with the traditional index funds, at least for now. Here's why, according to John Bogle and Burton Malkiel, two of the greatest proponents of passive investing:

While index [mutual] funds also incur expenses, they are available at costs below 10 basis points. The expense ratios of publicly available fundamental index funds range from an average of 0.49% (plus brokerage commissions) to 1.14% (plus a 3.75% sales load), plus an undisclosed amount of portfolio turnover costs. The portfolios of market-weighted index funds are automatically adjusted for changes in the market caps of their portfolio holdings, and they require no turnover.

Furthermore, I would argue that fundamental indexing may kill the very outperformance that it seeks to take advantage of. Think about it: If investors pour billions of dollars into these funds to invest in stocks that match the ratios the funds are seeking, these stocks will be bid up so that they are no longer bargains. If investors seek out stocks with high yields en masse because they outperform, they will stop outperforming very quickly.

And then there's Jeremy Siegel, one of the leading proponents of fundamental indexing. While I thoroughly enjoyed his book The Future For Investors, Berkshire Hathaway Vice-Chairman Charlie Munger, one of the greatest minds in investing, had this to say about Mr. Siegel at a recent Berkshire annual meeting: "I think he's demented. He tries to compare apples and elephants in making accurate projections." Well then.

These are tough times for retail sellers of home furnishings and decorative products. Take a look at the five-year charts for Bombay Company Inc. (NYSE:BBA) and Pier 1 Imports (NYSE:PIR), two of the leaders in the category:

This post is written as part of AOL Money & Finance's Best & Worst 2006. Vote for Warren Buffett's glasses or check out the other nominees in the signature style category.

I have taken it upon myself to answer one of the enduring questions in the investment community, the question that has confounded the experts and pundits through the years. Herewith,

The Top Ten Reasons Warren Buffett Wears Those Glasses

1. Alan Greenspan is his fashion consultant in the eye-wear department.
2. Katharine Graham told him that they go great with $2,000 Brioni suits.
3. They came with the deal when he bought control of Berkshire Hathaway.
4. Nebraska Furniture Mart offered him a 10% discount if he wore them.
5. The glasses act as an intimidation factor to other players in his bridge tournaments.
6. The glasses allow him to read twice as many annual reports in an hour.
7. He got a good deal on them from Charlie Munger.
8. He thought they would make him a fashion icon as well as a financial one (one out of two isn't bad).
9. They are the "in" glasses at Gorat's Steak House in Omaha.
10. He is the second richest man in the world and can wear anything that he wants.

For disclosure purposes, the author of this post has owned Berkshire Hathaway stock for many years. He wore similar glasses until marrying his wife. Changing glasses was a condition of the marriage.

Doug Roberts is the Founder and Chief Investment Strategist for FollowtheFed.com, an independent research firm focusing on investment strategies using the Federal Reserve's impact on the stock prices. He previously held executive positions at Morgan Stanley Group and Sanford C. Bernstein & Co.

The Power 30 is Smart Money's November 2006 cover story. It features Warren Buffett and touts the magazine's list of 30 people you could learn from. There is no doubt you could learn from many of these brilliant economic minds. However, Smart Money did not choose to do much more than simply identify them. There was almost nothing to learn unless you wanted to know what they were currently reading. This story would have been better placed in People magazine than Smart Money.

For example, Whitney Tilson, Founder, T2 Partners is listed as having a large following among value investors. They mention him starting his investment fund at age 32 and doubling his investors' money in just seven years. BIG DEAL, I say. They must be joking. No offense to Mr. Tilson, but the average market return is 10% so doubling your investment in seven years is basically an average showing -- minus his fees and subscription costs, it might even be worse than the average.

Here is my Power List -- six glaring omissions of people left off the list that I think matter much more than some that made the cut:

• Alan Abelson, lead editorial writer for Barron's who is quick to point out market fallacies with an astute and well-read high level of cogitation. He gives you something to think about every week.
• James Cramer, of the Street.com and NBC fame who has a following that long ago passed ten's of millions of readers, listeners, watchers and Wall Streeters. He may not always be right, but he is very influential.
• Bill Gates, of Microsoft Corporation (NASDAQ:MSFT) fame, the wealthiest man in the world and largest philanthropist with his finger on the pulse of many worlds, I need not say more.
• Alan Greenspan may not be sitting on his Federal Reserve perch these days but when he speaks the world is listening. If he were to change his manner of expression to one of more specific and harsh tone you would not want to be holding the stock or bond he was trashing.
• Charlie Munger is a titan in the investment world and has had the ear of Warren Buffett for several decades. If Buffett is listening, you and I should be listening.
• Ken Heebner of the CGM Funds is one of those guys you would pay to have lunch with and has a track Record that makes some of the others seem like novices, for some real insights read this.

There are easily another fifty that deserve mention. Next time Smart Money, please give us some information we can use and not more lists. I get something valuable from every issue of Smart Money, but this story was not it.

Interested in reading more? Check out my other posts for Blogging Stocks here.

Sheldon Liber is the CEO of a small private investment company and the vice president for Design and Research of an Architecture & Planning firm.

Microsoft Corporation (NASDAQ:MSFT) has many issues to contend with at the company's current size and complexity. Among them is the disparity of its growing line of products; the lower profit margins offered by hardware sales in comparison to its traditional high margin software sales; and the increased number of formidable competitors it faces in every direction it looks.

This is the continuation of Monday's story Micro'soft' vs Micro'hard' -- Break it up fellas! In the first article I touched upon the scale of Microsoft and their lack of agility. I concluded that even several tremendous successes (swallowing Apple (AAPL) whole was used to exemplify) would only have marginal affect on the share price in the aggregate.

This story is not about whether Microsoft makes worthy products, or is inventive, or can create the next big thing. This is about what Microsoft is, and what it should be as a company going forward. Does Microsoft want to get back to its high-growth days and generate the kind of excitement a Google, Inc. (NASDAQ:GOOG) or MySpace (recently acquired by Newscorp (NYSE:NWS)) does, or do they want to be a large conglomerate. Given the number of new products that are announced weekly, and all the unfinished business the company has started, it is apparent that the die has been cast for the latter; it is a conglomerate.

Conglomerate \Con*glom"er*ate\, n.

Webster's: That which is heaped together in a mass or compacted from various sources; a mass formed of fragments; collection; accumulation.

OR

We received this completely unfounded rumor in our tip line. I hardly knew whether to laugh or weep at the elegance. [Update: as far as we know, it's not based on anything but speculations; it was posted on an AOL message board and also sent to us. It immediately charmed us with its perfect solutions to a raft of divergent problems.]

You see, seven years ago, Warren Buffett visited Wharton, where I was getting my MBA. Buffett attended, but didn't graduate from Wharton, and occasionally returns for a speech. This was a doozy and I (with my best finance geek buddies, hi Jaime!) stood in line for hours for the much-coveted seats.

When he opened the floor for questions, I jumped at the chance, and asked him about his succession plans; both he and his partner and buddy, Charlie Munger, were getting on in years. He joked about the fact that he was coming to Wharton to scope out candidates. I said, "I'd love to!" and the audience, and Buffett, laughed. I almost fainted from the brush with greatness. He said something about living forever, and that was that.

Then last week, I wrote a post wondering if Meg Whitman was about to move on, having accomplished so much as CEO of eBay. Had she outstayed her welcome? I mused. About the same time, Buffett announced in his annual meeting that he might be spending a large chunk of cash -- $13 billion -- on a long shot and everyone wondered what it might be.

Why not eBay?