I would say more like less than 1% of us should make more complicated investments than index. And that is generous, considering that there are much fewer people than that in the US today that have made consistent money picking winners and losers. Almost anyone you know that makes a consistent living in the stock market is actually making money through commissions and management fees.

The entire point of a hedge fund is to do this for people, for a fee. An index fund, on the other hand, is simply a direct purchase of stocks. 95% of Americans should not be blindly investing in indices because that would completely divorce the index constituents' valuations from their fundamentals - and as a result, when this is corrected, a lot of people would lose a lot of money.