70% of the active mutual funds manager are not able to beat the performance of their benchmark index because they try to time the market but fail. They buy and sell the stocks each month; they pay a lot of money in the transaction expenses. On average they charge you 3-4 % for expenses, the market return is approx. 8-9 %; they charge you 3-4% for expenses so you hardly get 5-6% on your money.
You can easily beat 70% of the mutual funds manager and get market return of 8-9% by simply investing your money regularly in the low-cost index-fund that tracks the whole market. In the index Fund, the manager don’t buy or sell any stock each month, they just park their money in those well chosen stocks and thus they don’t pay any transaction fees.
