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I'm doing great on some GMAC bonds I recently pick up.
I never understood why people invest in index funds. In a few minutes I brought up dozens of stock funds that have beat the index (S&P 500) over the past 1yr, 3yr, 5yr and 10yr periods. I'm on the investment board of our companies 401k plan. Among others we have a bunch of American Funds in our 401k. The charts they give us each quarter compare the funds to the S&P 500. In some cases over the long haul the American Fund have grown to more than double what the S&P 500 did. The standard for what makes our 401k is that it has a high Lipper ranking and consistently beats its corresponding index. With this info so readily available this is the route we go instead of just settling for average index returns.
Sure, returns change over time but if I'm going to invest my money today why wouldn't I pick option A (managed fund) if both over the short and long term it has always done better than option B (unmanaged fund)? I know the fees are cheaper but I feel this is a case of getting what you pay for. It's not about what you pay it's about what you earn after expenses.
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