It is all in the fees
on Tuesday, 26 February 2013. Posted in ETFs, Investments
There are two factors that drive investment returns 1. The assets you buy and 2. The fees you pay for those assets. It is not always certain that the stocks, bonds or property that you have bought will make you money.Hopefully you are working with a good advisor that knows what they are doing, but even then no body has a perfect track record when it comes to picking investments. Even the great Warren Buffet has made his share of mistakes.
There is one certainty when it comes to investing, if you are able to reduce what you pay in fees it will have an absolute positive impact on your investment returns. The below link, to the article “Buffet Wins with An Index Fund”, discusses exactly this point. Buffet bet a set of hedge funds that he could beat their returns over a 10 year period by simply investing into a passively managed ETF and is easily winning. It is not that the hedge fund managers are bad at what they do, it is the fees that they charge that are dragging down the returns.
So the next investment you enter into take a careful look at the fees.
http://blogs.barrons.com/focusonfunds/2013/01/25/buffett-wins-with-an-index-fund/