Why You Should Avoid Mutual Funds

by Todd McLay

October 11, 2019

Over the past several decades, mutual funds have been used heavily to manage investment risk. However, here are a couple staggering facts that should make you think twice about investing in mutual funds.

First, picture yourself at a Blackjack table for a game of 21. You are dealt two face cards. Do you stand with your 20, or do you hit for the ace? While my “inner idiot” might say, “Hit me!” I think everyone would agree this is a pretty risky bet.

What if I told you it is twice as likely that you would draw an ace as it would be for you to choose a mutual fund that would actually beat the stock market?

The fact is 96 percent of all actively managed mutual funds do not match the market over a 10-year period. This includes pensions, hedge funds and every mutual fund and segregated fund in the marketplace.

Twice as many poor-performing funds are eliminated than are actually active in the market today. When you consider what is thrown out, almost all mutual funds wouldn’t match the market over 10 years.

There are alternatives to consider for growing and protecting your wealth. The dealer is waiting. What’s your move?

* Source: S&P500 Dow Jones Indicies LLC,


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