Part 5/9:
Numerous academic studies affirm that index funds outperform most actively managed funds over the long term. A 2023 study showcased that from 1991 to 2020, a significant proportion (54.8%) of U.S. equity mutual funds underperformed compared to an index fund, even before fees were considered. Once fees were accounted for, only 30.3% of equity mutual funds managed to outshine the index fund, emphasizing that choosing index funds generally leads to better financial outcomes.