Being smart with $$ - Average is something to count on

Why is "average" good in the stock market? Because if you buy a stock index fund to ensure that you will earn average returns, you know you won't do worse than average.   Money Magazine (Aug'16) discusses mutual funds that were top performers for many years but in the last 3 years were in the bottom 1% of all their peers. People who jumped into these funds 3 years ago are licking their wounds. Why is average good? Because average is something you can count on.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com

Being smart with $$ - Average is above average with Index Mutual Funds

Average is above average. At least that is true when referring to mutual funds. Mutual fund ads often say you should not accept just the average returns of "index funds" which are designed to simply match the market.  The ads say: "Buy our fund and have a chance at doing better." But because Index funds have such low fees, they outperform about three quarters of actively managed funds. If index funds beat three quarters of the pack, then their so-called average returns are above average.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com