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.

In late December, Avista Capital Partners agreed to pay $530 million for the Star Tribune, less than half of what McClatchy paid for it in 1998. The deal comes amid growing concerns about the future of newspapers, which are facing competition from the Internet. But in spite of the ugly long-term outlook for newspapers, they may make an interesting investment for now.

For starters, Avista is purchasing the newspaper for 6.5 times its cash flow. Newspapers don't have the large capital expenditure requirements that many more booming businesses do. The industry is in decline, but it's still making money. I'm reminded of a profound statistic that I first read about in Jeremy Siegel's book The Future for Investors: Since 1957, railroad stocks have outperformed airlines, trucking, and the S&P 500.

This is of course not attributable to dramatic growth in the railroad industry. Rather, most investors saw that the companies were in decline and the share prices were driven down, and then provided a good return. The moral of the story: valuation matters. Most stocks are a good deal at the right price.

Are newspapers the new railroads? There are numerous similarities. Railroads were replaced by airplanes and trucks, but the railroad stocks were the better investment. Newspapers are being replaced by the Internet, but that in no way means that Internet stocks are better buys. Here's a quick look at some of the bigger newspaper stocks:

• Gannett (NYSE:GCI): Owner of 91 daily newspapers, including USA Today. The also own around 1,000 non-daily publications. Trades at around 11 times cash flow.
• E.W. Scripps (NYSE:SSP): Owns some newspapers, but also television stations, including HGTV and the Food Network. Also owns Shopzilla.
• Tribune (NYSE:TRB): Trades at around 8 time cash flow. Owns 11 daily newspapers, the Chicago Cubs, television stations, and other media interests.