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URL:  https://boards.fool.com/laurendi-ltltokay-i-admit-it-im-a-novice-10355788.aspx

Subject:  Re: Funds or stocks for the long term? Date:  10/6/1998  9:55 PM
Author:  SnootFool Number:  5889 of 106062

Laurendi:
<<Okay, I admit it. I'm a novice investor and very confused. On the one hand, given educated stock
purchases, even in a bear market or a correction, I can see my retirement nest egg building considerably. On the other hand, I worry about market highs and lows wiping out my retirement savings, leaving me to ponder my poor choices.>>

Don't think for a moment that stock mutual funds are immune from losing money thru making 'poor choices'! The only difference is that you have zero say in how a mutual fund invests your money. If history is any guide, index funds will keep beating actively managed funds decisively, especially once expenses & taxes are included. And the Foolish Four, RP4, etc. will probably keep beating the index funds, on average.

<>

If I may make a sweeping generalization, around these parts, the only good mutual funds are "true" index funds (i.e., those with very low expense ratios & other costs). And even index funds are considered adequate only when either:
1) it's your only choice (e.g., most 401Ks don't allow buying of individual stocks) and/or,
2) you're just starting out & don't have a lot of money to invest. Even deep discount $10-12 commissions eat up too much of your dough unless you're investing >$1K-2K minimum per stock. (expenses again!)

Go ahead & read TMFIG, it will help reduce your confusion.

Chris

PS- If retirement is 5-50 years away, you definitely don't want to buy any bonds or a bond fund. You want stocks!

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