If you're going to be an investor, you need to know this number: 72.

According to Standard & Poor's data cited in Money magazine, 72% of actively managed large-cap funds have failed to beat the stock market over the past five years.

In other words, while Wall Street, as you know, is chock full of well-paid financial professionals who run mutual funds to help us make money, apparently the vast majority of them are not faring too well. If they can't beat the market average, then we're better off just investing in a simple broad-market index fund, which will deliver the market average. Better still, it can do so at a much lower cost. While the typical managed stock fund may sport an expense ratio (annual fee) of around 1%, there are index funds that charge 0.2% and less.

A simple S&P 500 index fund, for example, will instantly plunk you in 500 of America's biggest companies, from the biggest -- ExxonMobil (NYSE:XOM), General Electric (NYSE:GE), Microsoft (NASDAQ:MSFT) and AT&T (NYSE:T) -- to the not-quite-as-big, such as Tenet Healthcare (NYSE:THC), Circuit City (NYSE:CC) and Dillard (NYSE:DDS). Over many decades, the stock market's average annual return has been about 10%.

Aim higher
You can try to do better than the market, if you want to put in a little more work. After all, if 72% of managed large-cap funds underperformed, that means that 28% outperformed. There are some top-notch mutual funds out there. You can screen for them yourself -- perhaps at sites such as Morningstar.com. I did and came up with funds such as:

Fund

10-year avg. return

5-year avg. return

Expense ratio

Dodge & Cox Stock (DODGX)

12.08%

15.47%

0.52%

American Century Equity Income (TWEIX)

10.70%

12.37%

0.97%

Blackrock Equity Dividend (MDDVX)

9.85%

15.48%

1.07%

Van Kampen Comstock A (ACSTX)

10.35%

13.66%

0.80%

Source: Morningstar. As of Aug. 31, 2007.

Don't rush out to buy these just yet, though. You'll need to research them more first. (And some may be closed -- such as the Dodge & Cox Stock fund.) But if the idea of studying gobs of funds without any help doesn't appeal to you, I invite you to try our Motley Fool Champion Funds newsletter service, which recommends many terrific funds with low fees, strong performances, outstanding managers, and great prospects. A free, 30-day trial will give you access to all past issues, so you can read about every recommendation in detail.

Longtime Fool contributor Selena Maranjian owns shares of General Electric and Microsoft. Microsoft is a Motley Fool Inside Value recommendation. Try any of our investing services free for 30 days. The Motley Fool is Fools writing for Fools.