This is a simple explanation of the method used to calculate the losses to the average American family's mutual fund holdings, over 5 years, from two types of the mutual funds fraud.

Mutual funds (not including those in retirement accounts) make up 12.2% of all families financial assets
In the US, 18% of families have mutual fund accounts (outside of retirement accounts).
Consider family with income in middle quintile (that in the 40%-60% range)
	$40,300 average income		66% own their home
	Imputed average mutual fund holding of middle quintile				$47,000
	Reported average mutual funds holding in 2001(from SCF 2001)				$83,600
	Figure complile from direct holdings plus half of tax deferred retirement accounts
Estimted costs to typical family over 5 years:
	Sum of brokerage overchanges, dilution from market timing and transactions costs from market timing
	Estimates taken from Bullard, Zitzewitz, and Greene-Hodges
	Brokerage overchanges averaged			1,820	$364	per year
	Dilution costs per year			0.14%
	Related costs (transaction cost)			0.14%
	Estimated return on S&P over 5 years from Mar 1996 to Mar 2001			13.26%
	Net return after costs of dilution and transactions			12.98%
	Start	S&P gain	S&P less costs	Loss
	Holdings in 1996	Holdings in 1991
	$47,000	$87,595	$83,854	$3,741
	Losses from "market timing" alone
	$47,000	$87,595	$86,518	$1,077
	$47,000	$87,595	$86,518	$1,077
	Compounding equation for cell D27
	This equation compounds the loss from the brokerage overcharge and the loss of 0.28% return for each
	of the five years.
	=(((((F14-F20)*(1+E24)-F20)*(1+E24)-F20)*(1+E24)-F20)*(1+E24)-F20)*(1+E24)
	Alternatively
	=($F$14*(1+$E$24)^5)-(364*1.1298^5+364*1.1298^4+364*1.1298^3+364*1.1298^2+364*1.1298)
	Compounding equation from D30
	=($F$14)*(1+13.26%-0.28%)^5
	Alternatively
	=($F$14*(1+$E$24)^5)