Investing 102

[Woody]

Greg,

You have really opened my eyes to investing in stocks. Up until now I have been investing most of my retirement funds in mutual funds. I own six funds right now and have my money evenly divided between small cap, mid-cap and large cap funds. I was just doing some research on the ten year performance of my funds. The ten year total returns (including dividends) has ranged from 22% to 147% with an average return of 68%. That equates to roughly 6.8% per year (simple interest).

Just for comparison sake, I took 12 stocks, most of which have been mentioned in this thread and calculated ten year total returns (including dividends) The stocks included were HD, PFE, CVX, MCD, MO, KFT, JNJ, KO, T, KMB, PG and CAT. Ten year returns ranged from -2% to 383% and averaged 143% which is approximately 14.3%, more than double my mutual funds average return.

I have reviewed the stock holdings of my mutual funds and I believe I own all of the stocks mentioned within the mutual funds. However, the funds also own 100+ other stocks, some of which I have no clue as to what they do.

Anyway, this has been a real eye opener for me. Thanks again for your insight.