Meg Richards, AP Business writer, details results of a Legg Mason study of mutual fund performance over the long term. She notes the active managers that outperformed have a lot in common with index funds.

As it turns out, the top actively managed performers borrow some of the traits that give index funds an edge, including low turnover, which cuts transaction costs, boosting total return, and long-term buy-and-hold strategies.

But the nugget I want to highlight is right here:

The majority of the funds had turnover that was massively lower than average, about 30 percent, collectively. That means the average holding period for a stock was about three years. By comparison, the average equity fund portfolio turnover rate for 2004 is estimated at about 112 percent, which translates to an 11-month holding period..

expenses, including transaction costs, are what I like to refer to as financial friction - a force that pulls opposite of the intended path. You want to save for a new house, a child's education, retirement. Guess what, expenses are trying to keep you from reaching those goals. It's best to keep an eye on them or they'll win.

Oh, the picture - that's good turnover.