You have some savings built up and want to invest it in something with better returns than the .009% you get with checking accounts.  What do you do?  If you are like me, then a safe mutal fund would sound wise.  However, the Heath brothers (authors of Made to Stick) point out some illuminating facts for an article in this month’s issue of Fast Company.

Instead of settling on a mutual fund managed by a Harvard MBA, it seems that you would be better off choosing a boring index fund.  The reason: research conducted by finance gurus rom 1979 to 1998 reveals that mutual funds underperformed the Vanguard 500 Index Fund by an average of 2.8% per year (after taxes).  This means that if you picked an average mutual fund and the Vanguard 500 in 1984, and then invested $140,000 in both, then in 1998 your Vanguard fund would be worth $1 million and the mutual fund a mere $550,000.

I think this is enough evidence to make me think about a boring index fund.