Fortune: "Cost is the principal reason that investors are unable to outpace the market index"

In July 1975, in an article entitled "Some Kinds of Mutual Funds Make Sense," Fortune's Editor A.F. Ehrbar concluded some things that seem pretty obvious today: "While funds cannot consistently outperform the market, they can consistently underperform it by generating excessive research costs (i.e., management fees) and trading costs.…It is clear that prospective buyers of mutual funds should look over the costs before making any decisions."

He concluded that "funds actually do worse than the market." He had little hope that the mutual fund industry would rush to fill the gap created by the new view that cost is the principal reason that investors as a group are unable to outpace the market index.

But Ehrbar described the best alternative for mutual fund investors: "a no-load mutual fund with low expenses and management fees, about the same degree of risk as the market as a whole, and a policy of always being fully invested."

Ehrbar's conclusion holds true to this day.