All DIY Investors need to read chapter 5 of "Your Money Milestones" by Moshe A. Milevsky. Actually, the whole book is worth reading because it's well written and presents a unique look at financial planning. He believes in smoothing lifetime consumption. He tells of an exercise where he asks his students to do a mocked-up personal balance sheet. These, of course, are pathetic and done wrong because, according to Dr. Milevsky, they don't include human capital. Dr. Milevsky explains to the students that they are like an oil well with a stream of earnings forthcoming over the next 40 years years or so. This stream of earnings based on their human capital needs to be taken into account on their balance sheet.
In the tax chapter he presents a typical approach of thinking of Uncle Sam as a business partner and the need to ensure that Uncle Sam doesn't take too big a cut of earnings. He talks about an anomaly that drives economists up a wall - the preference of low income individuals to give Uncle Sam an interest free loan and receive a big tax refund in April.
The part DIY Investors need to understand has to do with mutual fund returns reported for taxable accounts. Assume we see a 10% return for the year. I quote:
In each of these instances the bottom line amount for the DIY Investor is going to be different. Thus, returns of actively managed funds are not always what they seem.
All of this is just further reason to prefer low turnover, low fee indexed funds.