Mutual Funds: Direct vs. Regular? Why investor behavior trumps cost.

• Direct mutual funds are cheaper as they exclude advisor commissions, potentially offering higher returns.
• Regular mutual funds include advisor fees, leading to higher expense ratios and lower net returns.
• The choice between direct and regular funds depends on investor behavior, discipline, and need for financial advice.
• Direct funds suit disciplined investors who can manage their portfolio without external guidance.
• Regular funds with a competent advisor can benefit investors prone to emotional decisions, justifying the higher cost.

Why It Matters: It helps investors choose mutual funds based on their behavior and discipline, not just cost.