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Author: galeno Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19380  
Subject: Re: Load Vs. No load mutual fund Date: 6/4/2000 10:23 AM
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peppermintpatty wrote:
In a rising market Index Funds should be expected to lead the pack, with managed funds attempting to keep up and/or surpass the index. However in a flat or declining market you might find yourself better off in an actively managed account, where a fund manager can
cull out underperforming assets.


I refer you to the following link:
http://www.vanguard.com/bogle_site/april062000.html


Over any 10 year rolling period, a simple S&P500 index fund soundly beats 90% of all managed money. Period. When you extend the rolling period to more years, the index fund shines even more brightly.

The main problems with managed mutual funds are cost, agency conflicts (short-term thinking and emotionalism), over-diversification, portfolio turnover, and more that I can't think of right this second.

Over the long run, the stock market goes up 2/3ds of the time and down 1/3rd of the time. Investors understand this. Traders don't. Unfortunately, almost all managed mutual funds are run by the traders' mentality.
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