For Better Returns, Buy Index Funds, Not Mutual Funds

Before you go, we thought you'd like these...
Before you go close icon

In the following video, Fool contributor Matt Thalman discusses one reason investors should avoid buying mutual funds and stick to an index fund. Today he focuses on returns.

When the average investor is considering what to buy for retirement, based on historical numbers the best option is a simple S&P 500 index fund or perhaps a Russell 2000 fund. While some mutual funds may beat the S&P 500 over short time frames, Matt says, very few consistently outpace the S&P 500 over longer periods of time.

The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

The article For Better Returns, Buy Index Funds, Not Mutual Funds originally appeared on

Check back Monday through Friday as Fool contributor Matt Thalman explains what caused the Dow's winners and losers of the day, and every Saturday for a weekly recap. Follow Matt on Twitter: @mthalman5513 Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

People are Reading