Bona-fide financial education is the alternative today to conflicted 401(k) plans
Am I Better Off With an Index Fund or An Actively Managed Mutual Fund?
With an actively managed fund, the portfolio manager will do all the work for you. With passive investing, you may not know what indices to choose. If you pay an advisor to select the indices, you have the risk they will not choose the right indices and you will underperform the market after the advisor fees. The most conservative option is to go with one of the few portfolio managers that has proven they can outperform their index.
Use independent education and the proper tools to choose the very few funds that have consistently outperformed the relevant index. The concept is very simple. Out of the 10,000 actively managed funds, which are the very few that outperform the index with trusted managers, with low fees, with low portfolio turnover?
There are just a hand-ful of these portfolio managers that have withstood the test of time.
If you were invested in Index Funds this year, you would have lost out significantly, as Not On My Nickel bona fide education and tools will show you. Can you understand this Yahoo Chart below? Has your Fidelity Advisor or CFP taken you through the steps to learn how to select the few actively managed funds that consistently outperform the relevant index?
Come join us at Not On My Nickel and we will give you the education and tools to select the best mutual funds out of the 10,000. All you need is one or two balanced and growth funds, if you are young and starting out. In the chart below we compare Fidelity’s Target Date Fund 2045 to three NOMN researched funds, a balanced fund, a growth fund and an aggressive growth fund. The NOMN growth fund has outperformed the S&P Index for over 20 years by over 5% over the past 15 years. The balanced fund is below the S&P index since it holds bonds. but it still outperforms the Fidelity Target Date Fund. The blue line is the Fidelity 2045 Target Date fund. The red and green lines represent all the lost potential, by not in investing in proven portfolio managers who outperform their index, with low fees, over many years, sometimes two decades. The red and green lines represent the opportunity costs of investing in passive funds, when there are a handful of top fiduciary portfolio managers that have consistently beaten the relevant index.
There are a handful of true fiduciaries that operate in the best interest of the retirement investor. Remember your advisors do not file regular performance results. It is significantly more conservative going with the portfolio managers that do file performance results with the SEC.