Morningstar recently released the latest edition of their Mind the Gap research. Once again, “allocation” funds (e.g., balanced funds, target-date funds, LifeStrategy funds) had the smallest gap (i.e., best investor returns relative to reported performance figures). Investors tend to just buy them and leave them alone, which is generally the best strategy. And again “sector” funds had the highest gap — which is also not surprising because, if we’re being honest, how often is performance chasing not a part of what’s going on when somebody has a industry-specific fund in their portfolio?
Other Recommended Reading
Thanks for reading!
New to Investing? See My Related Book:
 |
Investing Made Simple: Investing in Index Funds Explained in 100 Pages or Less
|
Topics Covered in the Book:
- Asset Allocation: Why it’s so important, and how to determine your own,
- How to to pick winning mutual funds,
- Roth IRA vs. traditional IRA vs. 401(k),
- Click here to see the full list.
A Testimonial:
“A wonderful book that tells its readers, with simple logical explanations, our Boglehead Philosophy for successful investing.”
– Taylor Larimore, author of The Bogleheads’ Guide to Investing
August 19, 2024
