Why Mutual Funds Are Lousy Long-Term Investments

Eric • 2nd Jul 2006 • Uncategorized

Why Mutual Funds Are Lousy Long-Term Investments: Why the Rich Get Richer – Yahoo! Finance

…”If you invest $1,000 at the beginning of that time and earn 8 percent, that $1,000 will grow…to around $140,000….

Now the financial system — the mutual-fund system in this case — will take about 2.5 percentage points out of that return, so you’ll have a net return of 5.5 percent, and your $1,000 will grow to approximately $30,000 to you the investor.”

I still have to open Excel to verify this, but if it holds true, I’m selling my funds ASAP. Sure, their annualized gains thus far are 20.97%, 20.49%, and 3.24%, giving me a $713.22 gain since I bought on 19-Sept-05, but what would it’ve been if I invested in stocks? More to come….