Auto Insurance AUTO

Auto insurance protects you against financial loss if you have an accident.

Read More
Homeowners Insurance HOME

A standard policy insures the home itself and the things you keep in it.

Read More
Business Insurance BUSINESS

Discover the perfect insurance options to meet your specific and unique needs.

Read More
Contractors Insurance CONTRACTOR

Browse a variety of insurance options in order to find the right one for you.

Read More
Medicare Insurance MEDICARE

Learn about different medicare coverage to fit your specific needs.

Read More
Travel Insurance TRAVEL

Finding insurance doesn't have to be difficult. We do the work for you.

Read More

DALBAR Analysis Shows Poor Performance by Mutual Fund Investors by Barron Maestro on April 9, 2012

Simon Constable, writing for the Wall Street Journal, has written about the challenges facing mutual funds in their quest to keep up with, or beat the market. The headwinds the managers of these funds are severe which include fees (both to the investor and brokerage fees paid by the fund), and the drag of any cash balances (paying nearly zero) on returns.

In this article Constable highlights that poor timing decisions by investors in mutual funds add to the challenge of beating the market. He cites the latest data released by DALBAR, a mutual fund research firm operating in Boston.

In the 20-year period ending in 2011, average equity fund investors had annual returns of 3.49% according to DALBAR’s analysis. The S&P 500 had annual returns of 7.81% over the same timeframe. This is a massive difference, and over 20 year amounts to an extreme transfer of wealth from fund investors to the fund companies (and other, more astute investors).

Achieving the returns cited above, average equity fund investors starting with $10,000 over 20 years would have an ending balance of $19,859. Those who chose to invest in the S&P 500 would have an ending balance of approximately $44,500, if you take off .06% per year for an S&P 500 index fund fee.

Constable comes to the conclusion, citing the opinion of Ric Edelman, CEO of Edelman Financial Services, that investors should avoid mutual funds altogether and focus on investing in ETF’s for the long-term.


CAll or Stop in at Insurance Plus to hear about a better Idea for your "hard earned" money.  740-992-6677


Posted 12:04 PM  View Comments

Share |


No Comments


Post a Comment
Name
Required
E-Mail
Required (Not Displayed)
Comment
Required


All comments are moderated and stripped of HTML.
Submission Validation
Required
CAPTCHA
Change the CAPTCHA codeSpeak the CAPTCHA code
 
Enter the Validation Code from above.
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive


View Mobile Version
Facebook
LinkedIn
Google+
Blog RSS
Yelp
Enhanced Insurance
Carriers
Carriers
Carriers
Carriers
Carriers
Carriers
Carriers
© Copyright. All rights reserved.
Powered by Insurance Website Builder