@George Gammon there’s a couple things that are important that are not mentioned.
The Dow Jones, which is what most people refer to as the “stock market” and is used as a benchmark for returns, has averaged a historical return from 1926-present of about 10.6% (I may be off by a tenth or two; going off the top of my head). From this point forward when I refer to the stock market I’m referring to the Dow. The S& P is generally used as a benchmark for the ‘health’ and ‘direction’ the equities market is heading in.
His advice includes what is called dollar-cost averaging, meaning consistently putting in money whether the ‘market’ is making money or losing money; if you’re putting in $300 a month when the market is up 20% you’re still consistently putting in $300 when the markets down 44%, for example. The reason why this is key, is because from 1997-2018, 60% of the stock markets gains were made on 50 DAYS of trading (obviously not consecutive days, they were sprinkled throughout). So his investing principle is based on dollar/cost averaging (buy low/sell high). This enables the ‘market’ to return the 10.6%.
Now mutual fund managers try to beat that and some do, occasionally. I had a mutual fund, T. Rowe Price’s Capital Appreciation Fund that over the last 10 years has returned an annualized/yearly 12.4% return (11.69% after expenses). Most ‘stock’ mutual funds don’t actually contain bonds, some specific ones do, but it depends on the individual fund. Getting a load mutual fund (meaning an expense you pay to invest in a mutual fund in addition the yearly cost (expense ratio) to run it vs. a no-load (just pay yearly expense ratio) affects this also. He intentionally doesn’t mention the expense ratio in the 12% because expense ratio varies from fund to fund.
His advice is for the masses, the unsophisticated, every day person who doesn't know the difference between the S&P and the Dow, who knows they need to do something but no idea what step to take. That is why he recommends mutual funds. Warren Buffet takes this a step further, and recommends index funds, which are the simplest in terms of diversification and tend to be lowest expenses. Warren Buffet, they greatest investor in history in terms of track record and performance, said when he dies he doesn't want his heirs investing in individual companies, REIT's, or even having it professionally managed. Instead he said "My advice to the trustee couldn't be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard's.) I believe the trust's long-term results from this policy will be superior to those attained by most investors ".
