Dylan from New Mexico recently asked financial guru Dave Ramsey why he would pick four individual small-, mid-, large-cap, and international mutual funds and invest in them equally instead of simply investing in the S&P 500 index, especially when mimicking the S&P 500 index is the key metric.
Ramsey often references the S&P 500's returns over the decades on the Dave Ramsey Show, but he himself recommends four mutual funds covering industries of all sizes. He described Dylan's query as a very good one and explained that 50% of the mutual funds in the growth sector do not outperform the S&P 500 index.
