UnThreaded | Threaded | Whole Thread (52) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: Rayvt Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76079  
Subject: Re: Wade Pfau: 3% is the new 4% SWR? Date: 3/2/2014 8:54 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 10
I just simply do not understand the knee jerk rejection of a whole category of investing, simply because of the fees involved.

Well, the knee jerk rejection is because almost 100% of FAs don't deliver on the implied promise of beating the index or benchmark.

"You can only outperform the index by diverging from it.
That almost always means losing correlation: your best times won't be at the same time as the best times for the market. You will underperform sometimes."

Almost all people who use a FA don't understand this, and will yank their money away when the FA inevitably has a year or two of underperformance.
The only type of FA that survives is the type that sticks close to the index -- which means that he does *not* add value, and therefore his fee is a deadweight loss.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (52) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:
Macro Economics

Ringing the NASDAQ Bell
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement