Types Of Mutual Funds — Good, Bad, Ugly

The last series talked about what investments to buy and the importance of asset allocation. I said that your most important decision is how much to own in stocks, and how much in bonds. Your second most important decision is whether to hold these as individual stocks and bonds or to use mutual funds or exchange traded funds. Ultimately your decision should largely be determined by costs.

In addition to the selected videos on this page, you might consider checking the commonly asked questions and answers in these categories:

Select Video Tutorials about Investing With Different Types of Mutual Funds

All are excellent videos. The transcripts can help you make best use of your time.

Short videos about index funds:

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Quality,
Length
Title
Description
Title for passive investing with index funds
5-star rating (53:54)
Learn why passive investing with index funds is best investment strategy for most investors. (Video with experts)
academic evidence supports index investing
5-star rating (1:21:01)
Evidence that index investing is the winning strategy. Compelling argument for passive investing with index funds.
Vanguard describes: what is index fund investing.
4-star rating (2:16)
Learn what is index fund investing and how it differs from actively managed mutual funds. Learn why index funds are important for your investment portfolio.
Why indexing works.
4-star rating (55:44)
Experts reflect on why indexing works and agree: it is largely due to costs. Simple math ensures low costs index funds must beat managed funds in long run .
John Bogle talks about Vanguard index funds
4-star rating (58:46)
John Bogle, advocate for ordinary investors, speaks in special interview about importance of Vanguard Index Funds.
Stock trading is a zero sum game.
4-star rating (5:36)
Before costs, trading stocks is a zero sum game. When actual costs are considered, index funds always win in the long run. Learn what Zero Sum Game means.

Short videos about target-date funds that use index funds:

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Quality,
Length
Title
Description
What are target date investments?
4-star rating (4:24)
Not all target date funds are index funds, but the Vanguard Target Date Funds are. Moreover, they are a fund-of-funds without an additional layer of costs.
Target Date Fund Glide Path
4-star rating (7:28)
A Target Date Fund is usually a fund of funds so it is important to find a Target Date Fund that doesn’t have an extra layer of costs. Vanguard is example.
How to choose target date investment
4-star rating (3:39)
No fixed rules about how to choose target date funds. Start with when you’ll retire, then consider the stock/bond ratio today. Adjust target date as nec.
Vanguard Target Date Funds
4-star rating (7:43)
Vanguard Target Date Funds set a high bar to compare against. They use low-cost index funds with no additional cost to manage this fund of funds.

Short videos about actively-managed mutual funds:

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Quality,
Length
Title
Description
Investing Basics Mutual Funds
4-star rating (55:44)
Start your investing education by asking, “What are mutual funds?” They provide diversity with convenience and low-cost. There are good funds and bad funds!
The Truth About Mutual Funds
4-star rating (18:34)
Every investor must learn “What is a Mutual Fund?” Good mutual funds are broadly diversified and very low cost. The bad ones both speculative and expensive.

Short videos about exchange-traded funds (ETFs):

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Quality,
Length
Title
Description
What are ETFs?
4-star rating (11:46)
What are ETFs? An alternative to mutual funds. This video is beginner’s guide to what ETFs are, how they work, when to use them, and their drawbacks.
Index Funds and ETFs
4-star rating (4:32)
ETF Index Funds compete with traditional mutual funds for lowest annual cost. Both have pros/cons so it often boils down to transaction costs.
Why Jack Bogle Doesn't Like ETFs
4-star rating (4:25)
While ETF investing is fine for long-term investments, ETF investing invites rapid trading, market speculation, or gambling. This is what Bogle objects to.
John Bogle Says Don't Trade ETFs!
4-star rating (4:38)
John Bogle says the proper ETFs used in the proper way is just fine—just don’t trade ETFs! The temptation is speculation and market timing—that’s gambling.
ETFs Part 1 Open Ended Funds
3-star rating (9:38)
To explain “What is an ETF?“, part 1 of 3 looks at the most common type of mutual fund, the open-ended mutual funds.
ETFs Part 2 Closed End Funds
3-star rating (4:51)
To explain “What is an ETF?“, part 2 of 3 helps you understand the different types of mutual funds by looking at a type that you will NOT need to buy: closed-ended mutual funds.
ETFs Part 3 Exchange Traded Funds
3-star rating (55:44)
To explain “What is an ETF?“, part 3 of 3 looks at a different way of purchasing an open-ended mutual fund—on the stock market. So, it’s an Exchange-Traded Fund (ETF).