Practical Investing: Evaluating Actively Managed Mutual Funds in Relation to their Respective Indexes

Abstract

In today’s world, every working individual is faced with the enormous goal of preparing for retirement and evaluating the myriad of investment options toward that end. This article analyzes actively managed mutual funds in relation to their respective indexes in an attempt to identify which type of investment may be the best long-term wealth accumulation strategy. Specifically, this study focuses on evaluating an investor’s options in preparing for retirement. The average working individual is not equipped to and/or interested in analyzing investment choices, and this study seeks to provide the everyday investor with tools to make better-informed decisions about retirement investing, based on a 10-year historical analysis of annualized rates of returns for mutual funds and their respective indexes.