Mutual funds are actually a pretty horrible investment in the long run.
I assume you aren't including index funds in that category.
Guy
Actually I am. After fees, index funds are guaranteed to (slightly) underperform the market, plus there are usually restrictions on when you can pull out. I'm not personally interested in an equity investment that is going to tie up my cash and yield a below-average return. I can see why they are attractive to others, though.
Not sure the index funds you are referring to, but I would guess the vast majority do not have restictions on when you can redeem. Further, on average, index funds typically outperform 2/3 of all actively managed funds.