The other day I was talking to a good friend about retirement investing. He mentioned Dave Ramsey, who has a show about helping people do the right thing financially. I’m sure Dave Ramsey has a lot to offer when it comes to getting out of debt and budgeting, but when it comes to investing, I’m not so sure. Remember, even smart people can be duped  by the financial industry.

 

Following Ramsey’s advice,  my friend got into five different low fee mutual funds. Because of the lower than average fees,  he is doing better than the average mutual fund investor. Here are the funds and their results along with the S & P results.

 

Average returns:                                                                       2015       5 year     10 year

Euro Pacific Growth Fund ® (AEPGX)                                        -13.84%     1.22%      2.98%

Victory Sycamore Small Company Opportunity Fund (GOGFX)     -1.24%      8.35%      7.12%

MM S&P Mid Cap (MDKAX)                                                          -9.80%        NA           NA

Ridgeworth Large Cap Value (SVIIX)                                           -8.07%      7.68%      5.83%

Alger Capital Appreciation (ALARX)                                            -2.10%     11.41%     9.76%

 

S & P (Benchmark)                                                                      1.35%     11.58%     7.01%

 

 

Investing $10,000 equally into each fund over the last five years under performed the S & P. Investing in just the S & P would have significantly saved on fees which plays a major factor in the results. Bellow are the comparisons.  I used five years of return numbers and cut out the MM S&P Mid Cap Fund (MDKAX) because the fund doesn’t have a five year track record.

 

Euro Pacific Growth Fund ® (AEPGX)                   $10,000 at  1.22% for 5 years = $10,628

Victory Sycamore Small Company Opp (GOGFX)   $10,000 at  8.35% for 5 years = $15,159

Ridgeworth Large Cap Value (SVIIX)                     $10,000 at  7.68% for 5 years = $14,663

Alger Capital Appreciation (ALARX)                      $10,000 at 11.41% for 5 years = $17,643

                                                                                                          TOTAL = $58,093

 

S & P (Benchmark)                               $40,000 at  11.58% for 5 years   TOTAL = $71,172

 

 

By investing $40,000 in low fee mutual funds for five years, the account is worth $58,093. By investing $40,000 in the S & P for five years, the account is worth $71,172.