Over the ten years from Jan 2003 to Dec 2012, an average mix of the low-cost funds I use would have increased by 8.3% annually — an increase of 120% in aggregate. Did your investments more than double in the last decade? If not, we should talk.

What created this return? First, the stock and bond markets did pretty well, despite plenty of ups and downs. Second, I use very diversified mixes, with mutual funds holding thousands of positions, domestic and international, so no one bad investment could have hurt much. Third, the fees are low – a critical element. The less you pay, the more you keep. Fourth, the mix would be re-balanced annually (buying the losers and selling the winners to get back to your original weightings). That’s the opposite of what many investors do.

Anyone can find mutual funds that did well in the past and tell investors they should load up. Unfortunately, there is no evidence that the “actively-managed funds” which did well in one period will do well in the future. But if you use passive, index-like funds — the kind of funds I use — you keep fees low, and you can’t cherry-pick past returns.

A few warnings. First, with any investment, the future may be different than the past. Second, this mix (60% stocks, 30% bonds and 10% alternatives) may not be right for you. Everyone’s risk profile is unique. Third, there were some very tough times in the last decade, and achieving this return would have required not selling when stocks were down. Fourth, these returns exclude my fee. (Adjusted for my max 1% fee, the 10-year increase would have been 100%.) Fifth, these returns are hypothetical — they do not represent any specific individual’s return, and several of the components use indices, when the fund did not exist the full ten years.

There are no guarantees in investing. But I am confident that patient, long-term investing with diversified, low-fee funds is the only way to go.