PBS Drops Another Bombshell: #WallStreet Is Gobbling Up Two-Thirds of Your 401(k)

[BlueStreak]

8. It is possible, but most people don't do better

In fact, most "professional fund managers" don't do substantially better than unmanaged index funds, and very few fund managers consistently outperform an comparable broad-based index fund on a sustained basis once you factor in the fees.

If a person wants to be in the stock market, index funds (or ETFs of indexes) are the lowest risk, but that is not "low risk" by any stretch of the imagination.

If a person is looking for ultra-low risk, certainly they can purchase a diversified mixture of utility stocks, top-grade corporate bonds, and tbills on their own. But for 2/10 of a percent, you can diversify 100 times more than an individual is likely on their own account. That seems like a good deal to me.