I think mutual funds are fine as long as you stick with index funds which are MUCH lower cost than an actively managed mutual fund. You can also get an ETF that does exactly the same thing, tracks an index. I have no doubt that there is a cost involved with an ETF. Someone is getting paid somehow, but I haven't looked into how they get paid.
Check this out.
The Ultimate Buy and Hold Strategy 2014 - Paul Merriman
He definitely steers you away from actively managed mutual funds. If you own a fund that makes a little more than market, but the fees are 2% so you end up making less than market overall, what's the point right?
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Steve
'08 Boxster RS60 Spyder #0099/1960
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'88 targa
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