Fees Better Predictor Than Past Performance
- tennisplyr
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- Joined: Tue Jan 28, 2014 12:53 pm
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Fees Better Predictor Than Past Performance
Interesting article in Saturdays NY Times showing that you are better off looking at a funds fees than it's past performance in fund selection.
http://www.nytimes.com/2014/06/01/your- ... -back.html
http://www.nytimes.com/2014/06/01/your- ... -back.html
“Those who move forward with a happy spirit will find that things always work out.” -Retired 13 years 😀
Re: Fees Better Predictor Than Past Performance
Thanks for the link. These days we should all be shooting for total investment costs in the .1% range.
Re: Fees Better Predictor Than Past Performance
Steve,
I agree, but that pretty much rules out using an investment advisor, doesn't it?
I agree, but that pretty much rules out using an investment advisor, doesn't it?
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either |
--Swedroe |
We assume that markets are efficient, that prices are right |
--Fama
Re: Fees Better Predictor Than Past Performance
It does. If you really want an investment advisor. Shoot for all in costs of <0.5%. It should be possible with that new thing VG is rolling out, and it might even be possible with some independent advisors with fees in the 0.3-0.4% range.
I know most people don't need one, but some do. (Complex situation w/ very complex rebalancing, loss of or fear of loss of mental capacity, etc.)
I know most people don't need one, but some do. (Complex situation w/ very complex rebalancing, loss of or fear of loss of mental capacity, etc.)
Re: Fees Better Predictor Than Past Performance
More people are becoming aware that costs matter. Yet newbies and busy professionals continue to line the pockets of the financial industry. The financial industry has a stake in making it sound difficult. Keep it simple and keep your costs low. Jack has done a real service to investors.
Re: Fees Better Predictor Than Past Performance
SGM:SGM wrote: Jack has done a real service to investors.
+ 2 on your thought. His work over the past 50 years has simply been outstanding.
It was a delight for me to meet him ( as well as Taylor Larimore) at recent Boglehead Conferences. Our younger son met him at BH-12 and is really in awe of him.
Shawcroft
Re: Fees Better Predictor Than Past Performance
I believe you could pay an hourly adviser or Vanguard for a few hours of advice now and then and stay below my threshold. If you require anything more than that, the best course of action is probably to simplify. Vanguard can automate so many things - rebalancing (via balanced funds), RMDs, regular transfers to your bank account, etc.afan wrote:Steve,
I agree, but that pretty much rules out using an investment advisor, doesn't it?
Re: Fees Better Predictor Than Past Performance
Good post. I might call the victims of the financial industry mainly "oldbies" though - it seems to be the older folks that are most taken advantage of.SGM wrote:More people are becoming aware that costs matter. Yet newbies and busy professionals continue to line the pockets of the financial industry. The financial industry has a stake in making it sound difficult. Keep it simple and keep your costs low. Jack has done a real service to investors.
- tennisplyr
- Posts: 3703
- Joined: Tue Jan 28, 2014 12:53 pm
- Location: Sarasota, FL
Re: Fees Better Predictor Than Past Performance
Also the financial industry has done a good job of selling the "fear of running out of money"steve_14 wrote:Good post. I might call the victims of the financial industry mainly "oldbies" though - it seems to be the older folks that are most taken advantage of.SGM wrote:More people are becoming aware that costs matter. Yet newbies and busy professionals continue to line the pockets of the financial industry. The financial industry has a stake in making it sound difficult. Keep it simple and keep your costs low. Jack has done a real service to investors.
“Those who move forward with a happy spirit will find that things always work out.” -Retired 13 years 😀