MUST-READ article on the “hidden costs of mutual funds”. Study shows the average annual trading costs (commissions, spreads, market impact and opportunity costs) of mutual funds to be about 1.44% IN ADDITION to the publicly disclosed expense ratio, which averages another 1.3.% per year. That means the average fund costs 2.75% per year!

Mutual Fund Trading Costs Go Unreportedhttp://online.wsj.comIn selecting mutual funds, most investors know to check the expense ratio, the standard measure of how costly a fund is to own. U.S.-stock funds pay an average of 1.31% of assets each year to the portfolio manager and for other operating expenses, according to Morningstar Inc.