No more closet indexing, time to get active

Trader on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
Trader on the floor of the New York Stock Exchange.

As the S&P 500 clings to a 2 percent gain for the year, many Wall Street strategists agree: Just mimicking the holdings of the benchmark—a practice known as closet indexing—is not going to cut it anymore.

As the sixth year of this bull market inches along, stock picking will be rewarded, they said.

Here's why and what they are telling clients to do.