There Being Two Markets

There being two markets - a long-term investment market and a transactional market that gambles investor money.

There are two games going on.

One game is for long-term investors in stocks, bonds, and mutual funds (the tuna), and the other game is for short-term investors like hedge fund managers and professional traders (the sharks). As you may know, hedge funds often prey upon mutual funds like sharks feed on tuna.

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Mutual funds help themselves to the money of unsophisticated investors through fees and expenses.

I know the plan offers a few tax incentives, but the those tax incentives hardly make up for the cash being heisted out of the account via fees and expenses, nor would the tax incentives make up for the losses incurred just because of market volatility.

Mutual funds are simply an unintelligent investment designed for the financially unintelligent.

As a caveat, I am not against the concept of mutual funds. 

I am, however, against the high fees and hidden expenses of mutual funds that rob investors of their money. On top of that, there are thousands of mutual funds, but less than 30 percent of them actually beat the S&P 500. 

In other words, all you have to do is invest in a S&P Index Fund, and you will beat over 70 percent of all mutual fund managers - all with less money and higher returns. 

As stated in the previous chapter, mutual funds are generally for average to below average investors, the C students in the world of financial intelligence. 

A- and B-level investors do not need them.