Back in 1987, Gordon Gekko in the movie Wall Street asked, “ever wonder why fund managers can’t beat the S&P 500?” The S&P 500, by the way, is simply a list of 500 big companies’ stocks. Gekko answered, “because they’re sheep, and sheep get slaughtered.”
It turns out, Gekko was right. 90% of mutual funds can’t beat either the S&P 500 index or even their own benchmarks. Check out this study if you want to see how bad it is. But why would mutual fund managers care? They make money from you whether they make money for you or not.
With a track record like that, you would think that mutual funds would be the cheapest financial product on the market. Wrong. They charge huge fees to underperform. Some of the fees are obvious, some are hidden.
If we all know that mutual funds fail to beat a passive index 9 out of 10 times and the funds charge high fees, why in the world are employers stuffing these things into everyone’s retirement accounts? Great question.
We think employers who have retirement plans need to do better.
If you have a company retirement plan that is packed with mutual funds, give us a call. Don’t worry if you don’t understand these things. We do. We will evaluate your plan for free and discuss your options with you. You may be able to recover your losses, including the excessive (and often hidden) fees you have been paying.
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ADVERTISING ONLY: The information on this blog is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.
Past results obtained by Biller & Kimble, LLC are no guarantee of future results. Each case or matter is different and must be judged on its own merits.