2025 was promoted to be a great year for active mutual fund managers.
To prove their annual investment advisory fees were worth the investment.
Wild swings in AI stocks created the perfect stage.
But the end-of-year 2025 investment returns were disappointing again.
The S&P 500 returned 17.9% in 2025.
The top 10 stocks in the index were up more than 108%.
How many of those top ten stocks were in your 401(k) mutual funds?
Decades of institutional and academic research.
Come to the same conclusions for many angles.
Passive stock market index investing tends to outperform active management.
This fact is especially true about 401(k) mutual funds.
Because 401(k) mutual funds all own the same stocks.
And end up with close to the same annual investment returns.
Too many individual 401(k) investors still try to out-guess the S&P 500.
Paying many times more annual costs for active management.
Versus the low annual costs to own an S&P 500 mutual fund.
The best odds for long-term 401(k) success are clear.
Own the best mutual funds available on your default 401(k) mutual fund menu.
Not the active management “stock picker” mutual funds.
The lower cost and passive-management S&P 500 mutual fund.
How many 401(k) mutual funds you own were up over 17.9% last year?
How many mutual funds on your 401(k) menu were up over that much?
If you are going to take the risk of stock market investing in your 401(k).
You might as well get the stock market investment returns you deserve.
P.S. One more improved mutual fund pick can change your 401(k) trajectory.
