Mutual Fund Mea Culpa

I firmly believe that revisiting your mistakes is one of the best ways to learn. Two of the most important lessons I learned early on in my investing experience were: 1) high fees negatively impact returns and 2) actively managed funds typically under-perform passive indexes over longer periods of time. [1] Prior to using low cost index funds in an asset allocation strategy I owned a number of high fee actively managed mutual funds. Below I’ve compiled a list of the active funds that I used to own against a comparable offering from Vanguard. Ten year annualized returns and volatility of the funds are included for comparison. A more detailed description of my ownership with my insights is included for each fund below.

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The Client’s Best Interest

The financial services industry often gets a bad reputation and some of my personal experiences justify that sentiment. One such experience occurred back in the summer of 2011. The economy was still in the early stages of recovering from the financial crisis and the Federal Government was facing a potential shut down. As a consequence the stock market was experiencing some fairly drastic moves.

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