Mutual Funds or Individual Stocks. Which One Did Better?

Mutual Funds  vs. Individual Stocks: 

Which one did better? The Mega Mutual Funds or Individual Stocks? 

1) Fidelity’s largest  Mutual Fund vs. an Individual Online Retailer Stock:

If you had invested $10,000 in Fidelity’s largest Mega Fund, The Fidelity Contra (FCNTX) [Net Asset Value of $108.50 Billion] on May 16, 1997 – Mar. 1, 2014, (16 years and 10 months), you would now have $51,897.

But, say you put that same $10,000 in an Online Retailer Stock Company: Amazon.com  (AMNZN). You would now have $2,081,676: YES, over 2 million US dollars – that’s over 40 times more than if you had invested in Fidelity Contra Fund!  

 $51,897.00  v. $2,081,676.00.00!  Need I say more? Yes? Ok let’s look at 3 more examples:

 2) Vanguard’s largest Mutual Fund vs.  an Individual Real Estate (REIT)Stock:

If you had invested $10,000 invested in Vanguard’s  largest Mega Fund (VTSMX) [Net Asset Value of $301.98 Billion] on June 20,1996 (Now Feb. 25,2014, just under 18 years), you would now have $39,889.64!

But, say you put that same $10,000 in a Dividend Real Estate Company (REIT): Realty Income Corporation (O). You would now have $200,000.00—that’s over 5 times more than if you had invested in Vanguard mega fund.

3) Pimco’s Largest Mutual Fund vs. an Individual Water Company Stock:

If you had invested $10,000 in Pimco’s largest Fund (PTTRX) [Net Asset Value of $236.93 Billion] on May 31, 1996 (Now Feb. 28,2014, just under 18 years), you would now have $34,043

But, say you put that same $10,000 in a Water Company :Aqua America Inc, (WTR). You would now have $125,323.38—that’s over 3 times more than if you had invested in Pimco’s Mega Fund. I will do one more example below to prove my point.

4)American ‘s Largest Mutual Fund vs. an Individual Credit Card Company Stock:

If you had invested $10,000 invested in American’s largest Mega Fund , Growth Fund of America (AGTHX) [Net Asset Value of $138.90 Billion] on May 25, 2006- Feb. 28,2014, just under 8 years), you would now have $17,536.58

But, say you put that same $10,000 in a Credit Card  Company:  MasterCard Inc (MA). You would now have $173,093.58—that’s over 8 times more than if you had invested in American Mega Fund.

Do you still like Mutual Funds? Or will you keep your head in the sand while these fund companies just keep nibbling away at your hard-earned money with fees?

Try this for yourself: Pick any individual company that pays increasing dividends. This is very simple. Think of a company where you and millions of other people use their products and services on a daily basis (like, water, toothpaste or soap) and go back as far as you can (be warned: the Mutual Fund companies try to hide their bad historical years) and run a test against the Mutual Fund you have in your 401(k), IRA, or other investment instruments. 

Once you do this, you will understand why billionaires do not invest in mutual funds.

Sherwin Brown

About Sherwin Brown

Sherwin has been an entrepreneur since he was twelve years old. He currently teaches, writes, and speaks to people about how to improve and safeguard all aspects of their financial portfolios.

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