Below-average results are really starting to hurt investors, but new research by Rik Frehen, a Dutch finance scholar, suggests that mutual funds are not bound to under perform or be overshadowed by pension funds. The trick is to not follow the trends of buying and selling based on short-term emotions, but instead to be patient and think more about the long term.

In his research, Frehen analyzed a period between 1992 and 2004 and looked at the returns of 4,000 mutual funds and 700 pension funds. In both cases, both pension funds and mutual funds underperformed the broader market in general; however, on average, pension funds only trailed by 0.1% a year and mutual funds were off by 1.4 percentage points.

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