Tuesday, September 01, 1998

Seven Years in the Dark
by [email protected] ([email protected])

I can't believe that I'm actually writing this letter. But I want you to know just how Wise I have been.

I am a CPA and consider myself rather wordly in the broadest financial sense. A few years ago, after getting married and having three children, I started saving some extra money each week. Being Wise at the time, I hooked up with a financial advisor and invested my money in mutual funds he recommended.

Flash forward seven years: I stumble upon The Motley Fool Investment Guide and read it on vacation. I am stunned by the quote that 91% of all mutual funds fail to outperform Vanguard's S&P 500 index fund. I can't wait to get back from the beach to see how my mutual funds have performed against this benchmark.

Back from the beach, I am stunned to see how my mutual funds have performed. I have a total of $117,000 in all of these things combined, and the average YTD return is a whopping 4.72%. And that's before the load I am paying on several of the funds! Ouch. Compared to Vanguard's 12.4% YTD return, I actually lost about $9,000 in the first eight months of this year. What's worse is the five-year average for each of the fifteen (yes that's right -- 15) funds I am currently in. Of the 13 funds which have been in existence for at least five years, none have outperformed the S&P 500 return of 164%. My best return was 131%, and 11 of the 13 had a total return of less than 90%. Good thing I'm too dumb to calculate how much my $117,000 would be worth at the S&P 500 return rate.

Needless to say, I have scheduled a meeting with my broker this week and will start investing my money my way. And that will be Foolish, finally.

[Hey Fools, why not pen a Fribble, yourself? We welcome submissions from readers. Just click here and read the "What's a Fribble?" item, pen a short masterpiece, and send it off to TMF [email protected].]

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