If you're regularly investing but not getting wealthy, this might be why:
While researching my list of the greatest fund managers, I routinely find that only about 3% of U.S. equity mutual fund managers outperformed their benchmark over 10 years. This means that the people who have put trillions of dollars in the other 97% of mutual funds are paying high fees for fund managers who only have about a 20% chance of beating their benchmarks.
The list of mutual fund managers who have outperformed their benchmarks for the last 10 years is not long.Make a list of the mutual funds you own that are not on the list. Consider selling those funds and investing instead in either an index fund or a fund on the list tied to the same benchmark. If you choose a fund on the list tied to the same benchmark, you may not save any fees, but you are getting a manager who has beaten the benchmark for long enough for it to be more than luck.
If you have doubts about the economy, choose the manager who has outperformed the benchmark by the largest amount. That is the manager who has shown the most evidence of investment skill. If the economy slows and the market tanks, that's who you want to have to decide what stocks to buy or sell. In contrast, the index fund will always be 100% invested which is great in a bull market but terrible in a bear market.
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