This episode of the Finance Flash Go podcast discusses mutual funds.
A mutual fund is a collection of stocks that some financial “expert” puts together that she or he thinks will perform very well i.e. the value will overall trend upward. This is a form of active investing in which you or someone tries to pick the best stocks and time the market, meaning choose when the stocks will go up or go down.
Unfortunately, active investing has shown to not work. Passive investing is better. In fact, by managing your portfolio passively), statistics show that you have a portfolio that is better than 80% of people in any given year who try to actively “beat the market.” Can you believe that people pay more (in advisor fees, transaction fees, and taxes) for active investment management?
Pay more to do worse. That’s a losing hand.
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