Re: Why do mutual funds get such a bad rap on here?
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So why are so many of the index funds that OP mentioned doing so much better than the market averages? Am I misreading something?
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This is an important point.
This is something we should all be aware of when comparing to a benchmark index... Total Return vs Index Return.
It is true that the S&P 500 this year is up 3.00%. But, the Total Return of the S&P 500 this year is up 4.91% once you factor in dividend reinvestment.
The Dow is negative this year, but if you factor in the dividends you still would have made money if you were invested identically to the Dow 30.
We should all be comparing performance against the Total Return of an index and not just what the number tells you.
The truth is that the 25 funds listed haven't done as well as the OP said. Also, it is expected that index funds should underperform their indexes due to their fees and costs. Finally, I'm not knocking mutual funds... you just have to be careful in selecting them, and you should also be comparing them against Total Return (okay, I'll stop beating a dead horse).
Hope this helps...
-RMJ
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