How Dave Ramsey's Mutual Funds Have Performed Since 1973
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- Опубліковано 21 вер 2024
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In 2023, the Biggest lesson i learnt in the mutual funds market is that nobody knows what is going to happen next, so practice some humility and low a strategy with a long term edge.
It's crucial to have a well-thought-out strategy and not make impulsive moves based on short-term market fluctuations. Patience and a long-term perspective are key. You should consider a market expert to guide you.
that's the more reason I prefer my day to day investment decisions being guided by an advisor seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using my advisor for over 2years+
I just started a few months back, I'm going for long term, I'm still trying to wrap my head around it, who’s this advisor you work with ?
Sharon Lee Peoples is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
I looked her up, and I have sent her an email. I hope she gets back to me soon. Thank you
Why don't you tell us WHAT those funs are? He never actually says the names of these funds. If they are so great, why not share them with us? Truth is, low cost index funds are the best investments any of us can make, and that's not my opinion, it's Warren Buffett's.
Warren Buffet has 99% his money into an actively managed fund called berkshire Hathway that has outperformed the market since 1965
I was thinking the same thing
Why would you ever tell people your portfolio?
@@dhaufjebzjchseis3828 must be one those best kept secret things 😅
He might switch his funds over time if they underperform. But the video will live on and people will invest into them still thinking they're Dave approved. He doesn't want to be accused of getting a kickback from these funds.
Once again Dave, the issue is NOT that growth funds cannot beat the S&P. The issue is that growth funds cannot beat the S&P index funds when you factor in costs and taxes. If a growth stock fund has a 2% annual fee and the index fund has a .03% annual fee, then the growth stock mutual fund has to beat the S&P by 2% every year to truly beat the S&P index fund. This is the problem that you aren't acknowledging that people have an issue with.
TheRosswise couldn’t agree with you more. I’m not sure what Dave is smoking claiming that he has an average of 12% annual returns.
So true!!
All active & passive mutual funds and ETFs are required by the SEC to list their growth rate after fees. This is in order to compare apples to apples. He's saying to look at the long term growth rate vs long term growth rate when comparing funds. He never said it would beat the S&P each year, but yes his beat it most years.
My thoughts exactly
Why can’t people READ, and LISTEN? You guys are hilarious, let’s do this daily…..😂
The part that he doesn’t factor in is the 0.85% expense ratio with those 12% mutual funds plus there’s a 1%+ dividend with S&P 500 indexes. Why risk 2/3 underperforming when you can nearly guarantee the consistent 10% with basically no expense ratio and a small dividend
yeah expense ratio for mutual funds big ouch while theres extreme low cost index funds/ etfs that does the same
I love my index funds. Long term investing with low fees.
Yea funds have higher fees typically...
“That are in existence today that were around 40 years ago”
That is called survivorship bias. 40 years ago you could only speculate that they would be around today. That is why 90% is an accurate number.
Three fund index portfolio (either ETF or traditional index mutual fund) is the best way to go. Everything else is speculation, not investing.
Please, please invest. Savings rate, asset allocation, and minimizing fees are the three most important factors when trying to achieve everyday millionaire status (after completing baby steps 1-3)
Licensed financial professional here; everyone please do your own due diligence, always be skeptical with information you do not have a source to.
Stop confusing yourselves, the most important things is for you to start investing
yes. and the earlier the better. It will negate any advantage of "beating the market" In fact, if you start early enough buying the total stock market index fund (not S&P 500) in a bull market will give you plenty of return with less risk.
VTI
Just buy the Vangaurd ETF s&p 500 (VOO). Low fees and good returns in the long run
Do you buy into this ETF as a Roth or regular brokerage or both?
Eric Tastet As a Roth. I wouldn't buy any mutual funds, the fees are way higher. I think the fees for the ETF I am holding is somewhere around 0.04%. That is LOW compare to mutual funds.
Eric Tastet The 5 year return on this is 15.7% and the 10 year return is 8.5%. The average person won't be able to beat out the s&p 500, even the professionals has a hard time doing it so it's best to just go with something that you know will grow in the long run (30 years) by 7%-10%
I just bought this fund on the Vanguard app. I’ve been investing with them for a while, but I had it in other funds. Thanks for the advice guys!!!
SWPPX has even lower fees
Is this taking in account the fees that the mutual funds charge? Those will rob you blind and kill your ROI for compounding interest. Robbing 1 to 2 percent every year.
If inflation and the 15% government tax wont something else will.
I was fully invested in mutual funds and after all the fees they didn't perform well after 10 years so I switched everything to index funds and did much better. Anyone else have the same experience?
He’s also comparing growth funds to the s&p which is BS. Buy index funds. Don’t buy what Dave Ramsey has a vested interest in.
@@Mwaynick disagree I’m happy with my class a mutual funds I know which ones he has and I got them and they do good for me
@@robertguthrie4113 What exactly do you disagree with?
I’m happy with my return rates in my class a
Which my funds are Amcpx
Abalx
Agthx
Aivsx
Amrmx
Anefx
Smcwx
How can you not be happy with those return rates per year
@@robertguthrie4113 There we go! Now i can go and do some research!
Dave has a lot of great advice. I'm not exactly sure on this one though. I would be curious to see what his expense ratios are and what percentage he really makes in the end. I'm curious to know if they beat index funds at that point.
whos here in 2020 in covid19 stock market crash and trying to get their finance degree off youtube and start making some stacks?
What are stacks? Im new to all this...🤔
@@roosterc1546 stacks of cash
😂🤫🤫🤫
Here 😁🙋🏾♀️🙋🏾♀️🙋🏾♀️💵
What crash?
What Dave doesn't know is probability. 20, 30 or even 40 years of track record still doesn't guarantee future performance. And he even admits more mutual funds underperform than the index funds.
I am not sure how his team came up with this statistics however he only considers survived funds which inflates the %% of the "winning" funds. If he considered all the funds which started in 1993 and tried to calculate the % of those beating the index (obviously funds which went bankrupt contribute to "losers" stats) he'd end up way closer to 90/10 rather than 70/30
Dave is right. If you want to be rich, ask a rich person. If you want to learn how to save, ask Dave. If you want to learn how to invest, dont ask Dave. Ask Warren Buffet. He said ETFs. Ask John Boggle. He also said ETF. Any billionaire investor including Mark Cuban says to invest in ETFs.
chan stanley what is an ETF?
@@BaliBug exchange traded fund schd, schg ,schx
I'm sure the mutual funds that outperform the S&P 500 exist, but has Ramsey actually owned these funds since 1973? Or even 20 years? You could just keep switching funds and running after ones that happen to succeed. I realize we only have authorities to listen to when I say this, but if Warren Buffet says he hasn't met a guy who can beat the index, how come Ramsey has and is able to even mock people who disagree with him?
You’ve not discussed how you performed after accounting for fees. Often these funds don’t outperform the market when accounting for the fees you’re paying.
Also, past performance does not guarantee future results. You cannot assume because they’ve performed well in the past that they will in the future.
It's amazing how even when showing the numbers, people won't believe you. Dave is right, there are SOME investment funds with open access that outperform the S&P index fund even with their expense ratios applied. Some of you just want to play smart and base your answers on beliefs and whatever others say, rather than doing your own complete research.
After paying the loads (commissions ~5%), the ELP's fees, Dave's cut, on top of the mutual fund's fees (including paying the active manager), you'll find that over time virtually every mutual fund will under perform a simple low cost s&p index fund from Vanguard.
Exactly It would be like using a personal investment banker at a large bank, they're going charge a pretty penny to use their services. My bank practically begged me to use their banker and after some research, as I expected you're better off on your own.
Incorrect. Front-load on your (hypothetical) 100k is 5750, compared to, let’s say, 1% per year maintenance on the same 100k in an index fund for 10yrs is 10k. I’m an index guy, because I’m risk-averse for the time being, but mutual funds are definitely worthy of consideration. And the reasons they may not be to someone shouldn’t include “commissions”, because the math proves they don’t matter.
John Smith I like the 1st part of your strategy, but index funds will just never give you the returns mutual funds will. And for the time being (while you’re building income), that’s okay. Yes, some mutual funds have exorbitant fees; avoid those. As I said, I’m an index guy for the time being, but mutual funds are definitely in my long term plan.
@@bourbonbs2382 , your statement is incorrect. Front load funds have the same 12b-1 annual management fees that no load funds have. And in many cases the no load funds have even lower annual fees than managed funds. No load funds are not restricted to index funds, either. When shopping for mutual funds, consider historical rate of return, but also compare historical costs, as well as front or back end loads.
Amen
Dave's funds have averaged 13.04% and the S&P 11.8%, what he's leaving out is the extra fees incurred that eat into his returns. Some actively managed funds have very high expense ratios over 1%. By the time it's all said and done, even with his extra 1.24% extra performance he may have under performed the S&P 500 after accounting for the extra fees paid.
His numbers are net.
bingo
Well, do you actually know his expense ratio? Yes, SOME investment funds have a 1%+ expense ratio, but also alot of investment funds have a 0.20% average expense ratio or a 0.1% expense ratio.
@@victorpopescu5813 He has a different video that I saw once but can't find where he argued that SOME actively managed funds are worth it because they still have great returns even after the management fees. He actually named a couple names in that video but I can't find it. You need to carefully research funds and be sure you understand to avoid nasty surprises.
Dave never ever specifies what exact mutual funds he invests in. I’ve looked high and low and he never gives a straight answer on this. Makes one wonder how great they really are🤔
Maybe he doesn’t want every person who can’t control their emotions to dump money into either one of the funds he’s in and then rip them out when people get scared.
I suspect there's some lawyer stuff keeping him from giving out the ticket symbols. But I'm sure someone has found the mutual funds he just talked about which start in 1973 and 1934. Now for me to find them.
@@entrepreneurlife649 if you find them please let me know 😁
I think he invests in American funds !!!
Abalx formed in 1932
Agthx formed in 1958
Aivsx formed in 1934
Amrmx formed in 1950
Anefx formed in 1983
Smcwx formed in 1990
Apples-to-oranges comparison. First, the S&P 500 is NOT the market. VTSAX represents the market. Second, Dave is advocating having different types of funds and then rebalancing. This is sound advice when you are in the accumulation phase. Being more diversified (than the S&P 500) and rebalancing will more often, beat the S&P 500. What Dave Ramsay doesn't tell you is this can be done with Indexed Mutual Funds/ETFs. Any do-it-yourself investor can do this without paying a load to one of his ELPs (Which takes $$$ out of your pocket to line the ELP and his pocket). Also, his "average" returns is deceiving - he needs to show compounding returns and his returns needs to reflect the loads he has paid.
If 2% cash back isn't going to make me rich, an extra 1% return compared to the index isn't going to either.
These are not including all the funds that shut down. And with the fees you better be beating the index by more than 2-3%. Good luck doing that over the long haul.
Lol why comment if you don't know what you're talking about
@@lr4439 he does know what hes talking about. just look at the the vast research in this area. past performance is not an indicator of future performance. Low MER funds easily outperform mutual funds over the long run.
Why does he NEVER share the specific names of the 4 funds he chooses? Hmmm...
WITNESSx I'm guessing liability issues? But the finding funds that beat the s&p isn't hard
Skullo4, He could always put a disclaimer
Because he won't get commission from his smartvestors pros
RRR, If that’s true that true that means he isn’t using his own recommendations. Why should anyone?
It’s not just 4 funds, but 4 types of funds. I’m sure he has several funds.
It's weird how Dave is so heavy on "behavior over math" when it comes to getting out of debt. But when it comes to investing, he won't advocate for Indexing (very easy to do behaviorally) and instead advocates for financial advisers and selecting mutual fund managers to grind out an extra 1%. I wonder why.
Fees fees fees.
I'd say the opposite. If you don't engage you wont stay with it. Set it and forget it = bad plan.
Because there's a difference between costing you money and making you money
I assume he makes money from the SmartVestor Pro’s he endorses. But I also believe he genuinely believes his advice to be good. I personally can’t follow it as I’m Australian and his advice is really US-based and it’s not as straight-forward as it seems to transfer his advice here.
@@Pandorash8 intresting
I was expecting the names of the mutual funds. Please tell us.
This would be very helpful. But I assume he can’t give financial advice as specific as that without a high risk of litigation...
@@notpublic8961 I would prefer to give the benefit of the doubt, but you could be right. I’m not from the US, so it doesn’t help me anyway.
American Funds New Perspective Fund (ANWPX)
More than half the mutual funds did not outperform. AND THAT DOES NOT INCLUDE ALL THE UNDERPERFORMERS THAT SHUT DOWN. Index Funds beat mutual funds in the U.S. These funds have done even worse recently!
@Three Sixteen which ones are they
And that’s before fees! 98 percent underperform when fees are taken into account!
@@macjohnson5384 schd schx schg these are charles schwab funds I own
You have to factor in the percentage that you manager, usually 1-3 percent, is getting paid for the is not factored into the "out-performing" of the S&P. You say your funds made 13%, Dave, which is beating the S&P. BUT is that including the loads you have to pay for you manager. I think not, but tell me I'm wrong.
But I wonder what the expense ratio was.. 12-13% can go below s&p500 if the cost is high. Was that is return after costs?
UE853 fees are high. 3-5%
It's stupid to invest in growth stock mutual fund. Index fund is much better. Most don't outperform the index. The fees of index funds are much cheaper and it's easier to set up.
I love Dave but he is telling people to take unnecessary risks.
Outstanding!! 👏👏👍
I am averaging 12- 15% every year following this plan!
I love the way he NEVER actually names his funds. Guess we are just supposed to believe everything he says is true.
The historical performance of mutual funds is available online and not hard to check.
@@mastrake - OK? Which funds?
The point is for people to research their own investments
American Funds. His specific funds he mentions are: Growth Fund of America. Investment Company of America. As of today, Growth Fund of Am has returned 13.89% since inception & Investment Co of America has returned 12.09% since inception. This does include the initial sales charge of 5.75% but does not include the annual expenses which are .64% & .59% respectively for the Class A share of the fund. I don’t know what his aggressive growth or international funds are. Hope that helps.
@@jhight589 Appreciate all those smart enough to do their own research
What funds is he using? i'd like to check those out.
Bro gatekeeps
There are a couple of sleights of hand here.
1) Survivorship bias. He quotes outperformance of current funds which existed 40 years ago. They still exist because they outperformed, while other funds at the time no longer exist as they underperformed. You are investing now, not 40 years ago, and you don't know which of the funds currently available we outperform and exist in 40 years.
2) This is reinforced when he looks at 20 and 10 year periods. The rate of outperforming the index drops like a stone, because the Survivorship Bias effect has less time to work.
3) He says his current portfolio has outperformed. But he doesnt talk in terms of the price he bought in at to now, just the overall 40 year performance. If he invested in a fund that had done well for 30 years, which then underperformed for 10, it could still have beaten the S&P over 40 years while giving him sub par returns.
I have no idea how Dave is allowed to quote performance numbers with no disclosures, while actively making financial advice. If any investment firm tried to do this they would get fined a lot of money. And it’s probably worth saying how many underperforming funds have opened and since closed in the past 40 years. You gotta share the whole picture, Dave.
Easy, he is a fruad toting the line between what he can and cant say legally. He can give personal financial advice without any type of certification as long as the advice doesn't benefit himself or a company that he runs, or something like that there is a bunch a legal jargon and loopholes about it. He cannot give LEGAL advice on anything without having a BAR certification however. thats why he dances around alot of questions and legal issues with callers about money. Then he rakes in the youtube ad revenue and money from his books and speaches to pay off his bankruptcies and laughs at the rest of us.
Because he is not an investment advisor, he is a financial advisor. I am sure there are regulations on telling people what to buy... it's not rocket science.
@@drewthomasshow exactly. He’s not managing people’s money.
He fits the media exclusion . He isn’t recommending specific funds to purchase (think fidelity large cap yada yada) nor is he actually selling them. So he isn’t considered an investment advisor. He doesn’t need disclosures because he is quoting his his personal funds, which he has not disclosed the names of his funds. And he doesn’t need some license to state how the S&P has performed which everyone can easily pull up and see. You genuinely could not listen to what Dave says here and then pick out his funds - hence he isn’t recommending an investment for you to buy nor managing your money. And he prefaced it all as his opinion and nothing more so what damage does that cause?
@@drewthomasshow its highly unlikely his stock portfolio made of 4 mutual funds outperformed the sp in 20 30 years when 95% of mutual funds underperform the index in a 10 20 year window. he prob holds the sp, some swachb or fidelity funds. prob even berkshire othe big shark. and even if they outperformed by how much? 1% 2% ? is it worth the risk? a lot of shenanigans in his talk tho. he never discloses the truth.
I prefer to go with a few individual stocks combined with Vanguard index funds.
Why not aggressive/growth stock ETFs? They are cheaper than mutual funds...
Zach Wolfe that's what I buy. Just ETF. Specifically Vangaurd s&p 500 (VOO)
...and those ETFs don't have to be S&P-based. Diversify!...
Schg
Average vs. Actual return is a day and night difference.....actual return is what "actual" you receive in your account..
Dave ,please let us know the mutual funds you actually have !
Please share your great knowledge with us .
Theres honestly nothing wrong with doing a sp 500 index, just make sure youre doing it ROTH after taking advantage of all the match you can get. Youll do fine over the long haul, but why not try to do better than fine with good mutual funds?
Can you share your fund ticker symbols? Thanks.
they charge you fee for managing your funds whether the funds go up or down.
Dave you forgot a key element here, out of the 1/3 mutual funds that beat the market, once you consider the fees that were charged, you would be left with less money. I’m sure out of the 1/3 that beat the market, once fees were considered, most of those left you with less money.
No discussion of risk or fees. For a beginning investor, I would strongly suggest index funds. Later, after you become more knowledgeable, you can branch out and diversify into different segments.
All you need to do is click on the research tab see any set of history in performance. My experience is closer to 85% do not out perform their index.
Then look at the expense ratio of those funds.
Why are you pretty much re-posting the SAME content as the video posted a few weeks ago in the video "You're getting bad advice on Mutual Funds"?
This is the same exact flawed statistics... does no one on the team actually have the integrity to pass on the FACTS from the people who legitimately have a problem with this type of advice and stats Dave is giving? Honestly and in true concern...do you who moderate this UA-cam account blindly follow Dave or are you really about the math itself? This is not about Dave's wrong, I'm right.. it's about the truth! I'll re-post the same concerns, again.
1) His statistics are only accounting for surviving funds, that's fallacious as many pointed out in the last video. It's actually 96% of funds that don't outperform the S&P and that comes from people like Tony Robbins who has done extensive research and conversation with people like Warren Buffet and Jack Bogle...not some unknown advisors. If I had my other book by Bogle right now I'd get more stats to post but I let a friend borrow it. Dave HAS to take into account funds that were shut down because of bad returns because people put their money in there TOO!...and lost it or had bad returns. THOSE matter!
a) To break this down more in an analogy. Lets say someone says "You have a 25% chance of being injured crossing an 8 lane highway. See, look!... in the last 10 days we've had 4 people cross the highway and only 1 was injured!" But what they don't talk about is the 95 other people who tried to cross the highway, were killed and never made it. THAT is the same analogy as Dave's stats...skewed! I don't think he's doing it to be a liar or purposely promote his stuff, but he has to be honest with ALL the stats... not just the ones who made it in 40 years. He cannot just take the stats from his advisors without analyzing them in light of the full picture.
2) Dave, using even your 40 year stats you stated you *beat* the S&P by averaging 13.08% over those 40 years and the S&P Index averaged 11.8%. With just a basic 1% fee from your advisor you need to take off 1% from your gains. That puts you at 13.08%-1%= 12.08%. Now you've only beat the market by .28%. Now if you're up front about those stats, could you share the actual tickers? Because if your fees are more than .5% that likely puts you at losing to the market. This doesn't even take into account the consistent 5.75% front load fee on every transaction that you've lost or the turnover rate.
We get it, you've made money. No one said you couldn't or wouldn't(or that no one else could using your advice). You could have made millions more, that's all(and we could also). We want the same, so that's why we are after you for more full disclosure and transparency.
Perfectly put. I don't think him or his team are stupid, but they clearly have some motivation to boost mutual funds with their bank fees over index funds outside of the objective data.
Thank you for explaining that so I could understand it. And, I see what you're saying. I do believe Dave's intentions are honest, though. His focus has always been on Savings and investment rate over savings and investment returns because rate of savings is forefront in positive financial outcome.
You sound exactly like the people he describes. lol sheesh get over it. Dave is right as always. He just proved it.
JC Rarela don't think you know what youre talking about if you think this video proves anything. Rather than complain about "people like me," since we are putting up the same arguments that multi-billionaires tell us about... Engage the arguments themselves.
Edit, notice also there's a reason that I currently have 34 upvotes from the commenters if you actually read through the comments. We want honest answers from Dave. This is why I assume that you likely do not know what you're talking about when it comes to mutual fund/index fund investing because fees matter. I can break it down another manner if you'd like...
What Dave is saying is equivalent to saying "I got a half off deal on a product you bought for $30 locally.... I got it for $15!" If you don't ask further, then you falsely think he "beat you" financially until you ask where he got it from. Then he says "China!" Then you ask, "how much was shipping?" and he responds "Shipping was $25" then he didn't "beat you."...since the costs of the shipping raised it higher than your purchase price.
This is a similar concept to investing, except it could cost you hundreds of thousands. Look at the other examples on the other video posted about the the similar subject. He compared some Vanguard fund with a baseline investment of $10k into the funds Dave is talking about. One fund DID beat the Vanguard fund even though it had $230k in fees after 40 years, but the other one lost considerably to the Vanguard index fund with $230k in fees. The Vanguard fund had $13k in fees over 40 years. If you think "Dave is right," then you need to do some math and continue to learn more about what you claim since mathematically---Dave is incorrect about "beating the market." He may barely beat a comparable index fund based on the information he gives.
I'd honestly like the person who moderates this account to pass on comments like ours onto Dave so he can honestly respond with full net(after fees...ALL fees) returns. If he still beats the market overall in a comparable index fund... great for him, he chose a few of the 4% of funds that beat the market over the long term. I'm not wishing ill upon him or loss of monetary gain... we just want the truth.
Droptozro, I agree with you but this is Dave's channel. Whoever runs this channel has to agree with Dave, unless they want to look for another job. Do you really think that Dave would allow someone running this channel to post anything that goes against Dave's teachings? As for these comments getting back to Dave, I say that it's pointless. He's heard these same arguments so many times from different people. Some people say that he's intentionally being deceptive on behalf of his endorsed local providers. I don't know if that's true, or if he truly believes what he's saying. Perhaps he's right & everyone else is wrong... One thing is for sure, right or wrong, he's very stubborn & he's not going to change his advice. There's no purpose in directing these comments towards him. The good thing about comments like your's is that maybe they will influence other people to do more research & decide for themselves whether or not to take Dave's advice on investments. There's no point in trying to change Dave's mind.
Dave are you saying they outperformed including fees?
The mutual funds discussed on this video are: 1. AGTHX 2. ICAFX. They are good mutual funds but they have load fees for the class A shares. Certainly not worth going to an adviser to get, for most people.
And ICAFX (Investment Company of America) has not beat the SP500 on an annualized basis for either 1, 3, 5 or 10 years....
Hmmmm. I notice Dave doesn't tell me the funds so I contact a smartvester pro? Nice ad Dave.
Is that net of fees. Numbers from mutual funds are often not net of fees and the fees are substantial.
I am making around 9% Per Annum in Fixed Deposit and 11% Hybrid Mutual Funds(Combination of Debt and Equity) without any Risk. Why should I invest in Mutual Funds and Stocks that is only averaging and its got some risk? I feel the rewards are less.
Investing as Dave explains has got me a 19% return YTD. And I don’t know what he has. A little research and continuing investing does work!
You are a genius.
@@cerbico12 No he isn't. He's a gambler.
So what funds should we invest in what are the names
S&P500 Index ETF's like Vanguard's VOO have expense ratios of 0.03% hence all these managed active funds are a rip off and Ramsey is probably getting massive finder's fees for marketing all these managed funds with much higher expense ratios. Plus the vast majority of funds underperform the market case in point a bet made by Warren Buffet and a top hedge fund where Buffet challenged them to beat the market consistently over a period of time. A few years into the bet the hedge fund gave up.
Would you please let us know if you factor fees associated with mutual funds? This is a very important factor that i believe listeners should know, especially since many of us follow your advice.
Fees for certain mutual funds can be quite high. However, when you calculate out the final projected earnings difference between low fee and medium-high fee funds, the fees actually end up being worth paying - for the funds that have historically outperformed. Because the difference in earnings can be quite significant over the period of 20, 30 plus years. So it's all about looking into historical ror numbers and making the right calculations to base your decisions on when it comes to picking the right mutual funds! Always do your research
Why can't you provide a list of these funds? Share the wealth Dave...
I've given you 2 of the 4
He can. But then you wouldn't learn anything now, would ya?
Ive been depositing one hundred dollars a month into to savings accounts for each of my children which are 8 and 10 years old and I’m considering investing that money into Growth Stock mutual funds instead. where do I get those accounts started?
How come you don’t specify what mitral funds you’re investing in?
Where can we research the funds that Dave invests in? Is it only through the ELP’s or can we be privy to which funds that Dave invests in?
Eric Tastet good question I have a list of stocks that Warren Buffett invests in so why not Dave's list.
I wish I knew the names of those funds so I could start investing in them
1) Over 90% of fund managers do not beat the S&P. It is not a lie, as Dave says. He is cherry-picking by only including funds that are 40 years old. But most of those don't beat the market either as he states.
2) The average rate of return is meaningless. The compounded rate of return after inflation for the S&P is about 6% over the last 40 years. That is still really good but don't double it.
Almost all of my money is in growth stock mutual funds -- mostly in index funds. They have done really well over the last 25 years. And the expense ratios are really small.
Dave has stated before that the key is investing the money. Not where it is invested. Why is he going off message here?
Correct. This is ridiculous... To be honest one of Dave's books is what led me to invest and achieve to be a millionaire - I was 13 years old at the time... this is way off message. It was the only book I read of him but it was enough to have a positive influence on me. What he states is incorrect. And yes real returns of indexes are within 6-7% ... which half comes from economy growth and the other half from dividends ... the other 3% (10% return) comes from inflation ...
The best place to park the money ofr average joe is low cost index funds!
well more funds probably do beat the market but is just not the same ones every cycle or decade.
agree that average return % is not the best measure. returns are not linear.
Growth, capital appreciation is great building to retirement then you need income cash flow in retirement so you are not selling your shares in retirement. Actually you can make safely a lot more than average or 12% with ETFs. Never understood why he never says what he holds. I do and it's simple no secret.
Still have never heard the names of the funds so we can verify......
Bill Carlson exactly what I’m saying.
I know right that’s what I’m waiting to hear the names of the funds to start my investment I have had already try but I wasn’t sure I was about to put my bank info down and I step back I really need some help please 🧐
There is no guarantee that past performance is going to continue in these funds that beat the market. It amazes me that the 13% return in Dave's Mutual Funds vs the 12% in S and P 500 is Dave's rationalization that mutual funds are the better way to go. Way more risk to get that extra 1%. If the fund slips, switches to a dud manager, any other curveball, you've lost. I wouldn't rest easy thinking about it. S and P is guaranteed to give you your fair share of the market's returns. I'm more than happy to be "average" here.
It's also hypocritical that Dave's justification towards paying off your mortgage before investing in the market is due to the high risk of the stock market..... and mathematically, that difference is more like 5-6%! Complete contradiction when comparing the two issues.
Does someone know what mutual funds he invests in specifically?
Dave what about the fees from mutual funds? It would have been great to address the difference of fees between index funds and mutual funds since mutual funds have much higher fees which cut into your returns.
Lorenz Garcia, great question! Feel free to call the show and we can talk.
@@TheRamseyShow just answer the question, here i'll tell the guy, they give you the quote of how much it has made is after expenses
True. Fees for certain mutual funds can be quite high. However, when you calculate out the final projected earnings difference between low fee and medium-high fee funds, the fees actually end up being worth paying - for the funds that have historically outperformed. Because the difference in earnings can be quite significant over the period of 20, 30 plus years. So it's all about looking into historical ror numbers and making the right calculations to base your decisions on when it comes to picking the right mutual funds! Always do your research.
Love Dave Ramsey, but an index fund still looks good to me, as a complete novice and wanting something as easy, cheap, and hands off, as possible.
"so i beat it" what a boss
Is he accounting for the expense ratio of those funds though?
Doesn't sound that way.
Excellent question!
Dew Time that’s the million dollar question but even factoring fees he is kind of overall right provided you stay invested without trading in all those growth funds for 30 40 years in a row. A comparison benchmark to s and p 500 might not be most accurate but it kind of is accurate enough. Even today all small mid large cap growth funds both index and a few active Mng ones are killing it and beating any benchmark. Also even though there is some survivorship bias it’s legit because he recommending at least funds with proven track records regardless of fees. The fees for all 4 of his growth funds justified. Period end story Dave in this exact case is actually right.
He’s answered this question by saying he looks at the overall average return compared to the index.
Good question, and a good question deserves a good answer
Expense ratio though.
I looked up two of the the exact funds he's talking about and compared them to the s&p500, over a 10y span the s&p out performed both of them.
He never says which specific funds he chooses so we can't verify it has beat the Stock Market
I may be wrong, but I believe Dave does not give the symbols because he does not want to become a spokesman for them. I think the message he is giving is research and invest with these 4 principles on what you feel comfortable with. Just my 2 cents
And after a 5 second google search, it appears he is talking about American Funds' Investment Company of America (MUTF:AIVSX).
@@kevinerosa correct, and the AGTHX
Many do underperform but if you actually LOOK at past performance, which isn't hard, you can find funds that beat the S&P500 like Dave said. He also says to stop worrying about the specific details and just DO IT because that's why most people don't have money for retirement.
Funds pretty much never over perform the year after yet alone after 5, 10 years. Over performing in one year is almost always a deviation, and it's incredibly rare that it repeats
Fake it until you make it? He never tells you the funds.
That's because the majority of his wealth did not come from investing in "good growth mutual funds" like he claims. His wealth came from his businesses and real estate. His annual salary is 30 million dollars a year, plus he has over one thousand employees working for him. Where do you think all this money is coming from to fund his salary and his employees? I'll tell you. It comes from advertiser revenue, sponsorships, brand deals, booksales, and endorsements. He also owns hundreds of millions of dollars in residential and commercial income producing real estate. The reason he is pushing for everyone to see one of his "SmartVestor Pros" (Formally known as Endorsed Local Providers or ELP's for sort) is because he collects a yearly fee from these advisors to be included on his "Pros" list. That right there is a huge conflict of interest.
I have been listening to Davr for quite some time BUT he never answers complex financial questions like this:
Why doesn't Dave ever report NET annual returns? Commissions and high expense loads will eat into your investment returns. Most of Dave's stances are very principled, but his investing advice is all about pushing you into financial products that make other people money.
If you scroll through comments there are many others...
It's always sell a car, sell house, sell kidney, deliver pizzas, be a millionaire at 95 etc,. The idea is nice, but if you are intelligent and hungry for success this is not the best place to go.
So where is? Honestly?
Hey Dave You fail to
Mention all the fees you have to pay
You can outperform the SP500 by using factor-tilted ETFs (size, value, profitability and investment factors), so not a fair comparison here... A small value SP600 index has outperformed SP500 by 3-4%/year on average.
13.04% would not include fees
The reality is you should have a blend of growth index commodities and bonds.
I was looking at one of your smart vestors websites. They talk about daily rebalancing. How do they rebalance if they don’t have access to the money like you say the shouldn’t? Am I reading into this wrong? Can we have a video on explaining what rebalancing is?
I mean Dave knows about the expense ratios and the bs, and he probably knows this is bad advice for the average person who isn’t going to pick the best funds. But he’s old, and the whole parley used to work on active investing. In the world he would’ve come up in, corporate fundamentals were everything. I don’t think he recognizes that the markets don’t move on fundamentals anymore, passive investing has taken over (which I think it’s dangerous to the overall economy) and your last years profits don’t matter, if your in the sp500 does and fed printing does. To save having a fund manager probably seems like it adds an important element because of the period of history he comes from
This whole speech is either a story of gross incompetence or a blatant lie.
The percentage of mutual funds out performing the S&P 500 that he quotes here IS NOT correcting for survivorship bias.
He only calculates the ratio of successful funds compared to non successful funds out of those who have survived the 25 years.
The simple reality is that most funds that fail don’t last 25 years before they are closed.
You’re right Dave it’s not rocket science - it’s basic finance that you’re getting wrong and your insulting your audience by thinking you can fool them with biased numbers.
A few real world examples of each category would be really helpful. Not sure if that’s something you have to pay for.
Okay, so let’s say Dave convinces you to go to one of his “endorsed local providers” (ELPs) and then let’s say you’re lucky enough to pick from among the 1/3 (skeptical of that fraction, but let’s stipulate that it’s accurate) that he says beat the market… and let’s say that your fund gets that 11 or 12 percent average that he is claiming, as opposed to the 10% average or approximate amount that he says the S & P 500 index earns… if you’re coughing up the average amount of money in fees that all of those active funds charge, that’s completely countering whatever gain you had coming from beating the market. And of course if the law of averages catches up with you and at some point the fund(s) that you picked are in (or become among) the 2/3 of funds that DON’T beat the market, you’re screwed, because you still have to pay those high yearly fees. Jack Bogle was right: why on earth would you give so much of your hard earned wealth to the croupier? With a good quality index fund you pay PEANUTS in maintenance fees compared to what a group like American Funds would charge you.
So why take that chance? By promoting high fee active investment funds at the expense of low cost index funds, Dave is, in effect, encouraging his clients to go to the casino. It is irresponsible and goes TOTALLY against the stated philosophy / mission of his show, which is to show listeners ways in which they can increase their wealth. And of course Dave has done well with the funds he has… he supplements them with the money he receives from the ELPS that he promotes and endorses and gets his followers to choose from. It’s sly and subtle salesman-style tactics and it feels dishonest and sleazy.
Very well said. 👏 He is a total hypocrite. He does not recommend that people buy individual stocks, but all of these actively managed mutual funds that he promotes, the managers of those funds are picking and choosing stocks. They are, in a sense, day trading.
Funny he doesnt go into detail about his funds like some other financial people.
Would these returns before fees? If not then all of them would fall well short of the s&p..
Fees are not that high, expense ratios tend to be around 0.3% or 0.5%.
Advisors with fixed fees could ask for few hundreads dollars per year.
The biggest issue are the taxes on funds with high turnover, in a 401k or an IRA it could be fine, but on a taxable account they can have a big impact.
Dude Dave got Rich by real estate not by mutual funds. No one on this planet made serious money by mutual funds
I'm 25, I have a Roth IRA, & a brokerage. I have QQQM in them both. I'm considering adding in VOO & SCHD. But also 1 mutual fund. I'm going to do research but if anyone knows the best one LONG TERM, drop it down in the comments.
Thank ya!
Pure BS, that he invest in mutual funds that outperform the S&P500 every single year!
A classic case of survivorship bias.
Just get some nice vanguard index funds. Bam!
Index funds participate fully in any bubble, and they also participate fully in any downturn.
That's investing...
D Storm
I didn't get index fund until the market dropped during the Great Recession. That was the only opportunity for me.
@@blackworldtraveler3711 how was that the only opportunity?
Vanguard does not "revenue share" i.e. no commissions from loads (they're no load) or 12-b fees (they 12-b fee free). So his ELP o,r whatever they are called now, will not promote them. Dave shouldn't be in them either, if he is honest about it. Most likely he using the American Fund group.
Amazing, I’m 15 right now and have been listening since 5 Years :) you are very good.
TheZFDPRO Vlogs
You do realized you could be contributing to a Roth IRA.
I started my nieces and nephews at 12 years old.
Did Ramsey ever mentioned that in your 5 years of listening?
@@blackworldtraveler3711 As long as he/she has personal income
Renie Handler
Always been that way since 401k and IRA started.
@@blackworldtraveler3711 I understand that. You statement just implied you could invest money for a minor in a Roth IRA.
Renie Handler
You can. I'm the custodian. They can't physically do it anyway.
I call it uncle match for extra funding.
I didn't realize that past performance was predictive of future results. Thank you for the financial advice Dave!
Well it’s not
@@HateTheIRS lol he’s being sarcastic, cmon kid.
The past is certainly a better predictor than the random hum going in people's heads.
Unless you have a crystal ball, there is no way you can pefectly predict future results. Past performance is the best tool we have without access to magic, ESP, or extremely good luck. If you know a better way to predict future performance I'm sure we'd all like to know.
No thank you!
Fees Fees Fees Fees. Compounded over a lifetime. Fees.
Dave is so behind the times with his mutual fund investments and investment strategies.
What's your net worth?
Chris Vandernaald
Much more since I stopped investing in Mutual Funds and started using other investment options that keeps more money in my pocket that I can use for more Investments within the same risk assessment.
@@rotaxrider do you mind sharing your investment tips..I'm totally new to all of this and it's overwhelming but I definitely want to learn and begin on the right path to financial growth.
Yes. The advent of no commission trading and fractional shares has changed the game as well as freely available research. It’s relatively easy to build your own portfolio with zero fees that mirrors any index you want and fill in gaps with low cost etfs.
how about naming names? Vanguard? Fidelity? who's FUNDS?
He won't tell you cuz he wants you to go to his Smartvestors who take huge fees.
BFOCX or CNRWX there... It's not hard to use a screening tool and check out funds
Either way you look at it, invest. Don't invest in single stocks, invest in things with a long record that has preformed well.