It's the little things that kill: when it comes to investing the little things are fees

I recently switched employers. Most people nowdays do that probably at least once a decade. In the government contracting world, it tends to occur even more often. What a new employer means, of course, is a new roster of benefits. I went from three weeks of vacation a year to two weeks. I had an upgrade in health insurance by moving to Blue Cross Blue Shield of New Mexico. Finally I switched from a 401k to a SIMPLE IRA.

After filling out about five or so forms requesting my address and other personal information I was given a roster of about 20 mutual funds from which to select. No information regarding fees, loads, or anything like that, just 20 names such as AIM Small Cap Growth or Fidelity Advisor Opportunities. I scanned the choices for anything with the word Index. Nothing. 20 choices and not one index fund. I made some selections, figuring I could always research and adjust later, and turned in the form.

What my research has revealed is fees, fees and more fees. There were some no load funds, sure, but the lowest fees on the funds are in the range of 1 to 1.5 percent. On top of that, the account provider itself has a 5.75% load to pay for such things as maintaining their website, letting you day trade across their roster of funds and most importantly marketing themselves to other small businesses.

I like the SIMPLE IRA. The 3% match is an improvement over my previous employer's 2.5% in the 401k. I like the fact that you are vested 100% right off the bat. But would it kill to have an index fund for those of us who came from the Vanguard school of thought on investing? I try to be opstimistic, but I also like to play the odds. Give me an investment approach that has historically outperformed 8 out of 10 funds anyday, especially if it is the simpler choice.