Beginner Question: % return or 10K growth for mutual funds?
Hey all,
I am wondering about the difference between an annualized returns (say 25.6% 5-year return) and a 10k growth over 5 years. Right now, I am comparing different mutual funds, and some of them have a higher return over 5 years, but the 10k growth place some of the funds that had a lower return over those 5 years as having a higher value. For example:
FUND A: 25.6 % 5-year return ; Growth of 10k over those 5 years: 15k
FUND B: 22.4 % 5-year return ; Growth of 10k over those 5 years: 18k
These are just made up numbers, of course. Also, the growth of 10k already takes into account expense ratios, but no sales expenses.
What I am trying to know is:
1) By which number should I guide to allocate my investments? Return or Growth of 10K ?
2) Are mutual funds better or worse than investing in stocks in the long term?
Btw, I am using Morningstar
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