Originally Posted by ryberg
Well I think their point is that while that might be the case, you might nevertheless be happier
-- usually several points happier, in fact-- than somebody who had a managed mutual fund focused on the Nasdaq then. Or that is to say, their point is that managed mutual funds really by and large just suck.
Index funds are not their top pick overall. Indeed the stock market isn't their top investment pick overall, if you've got a new small business you're starting up, for example, or other such things. But they're clearly their top pick for those who again may not have the time, energy or inclination to do all the research themselves. A sort of way out between that as a rock and mutual funds managers and fees as the hard place.
No matter what way you decide to go, some research should be done. As for mutual funds, it makes a huge difference on how much you have to invest. Fees or types of funds you qualify for depends on how much investment to start. For example : (a $250 investment would cost us 7% up front sales fee, $100,000 investment cost 3.75% and a $250,000 investment cost 2.5% and over a million is free).We just found an investment advisor through our local bank( a subsidiary). The funds we invested in have a great track record for the last 33 years with close to the lowest fees. This portfolio we have is very diversified and therefore in the medium risk category. Sure you may get 25+%, but for the most part you will have a far higher risk factor, and we are not willing to take that risk.
I am not shy regarding our investments so here is where we have ours. We have a combo of 3 different American Funds. Google it ( it has never paid less than 12% over a 10 year time frame). That is all it will take to satisfy our needs.
Edit: also what class of funds you get makes a big difference on the fee structure.