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Basic mutual fund investment questions
In summary, you are correct that the goal of investing is to maximize returns, while paying low management fees.  Index investing has become very popular because of the low fees.  There are many actively traded mutual funds out there with very high management fees of 2.5% and up that do not beat the market.  This begs the question of why you are paying high management fees and not just investing in index funds. Consider maxing out your tax sheltered accounts (401(k) and ROTH IRA) to avoid even more fees on your returns. Also consider having a growth component of your portfolio which is generally filled with equity, along with a secure component for assets such as bonds.  Bonds may not have the exciting returns of equity, but they help to smooth out the volatility of your portfolio, which may help to keep peace of mind when the market dips.