No. of Recommendations: 8
When I look at an average, it isn't a index, because an index doesn't have the same overhead, but an average of related funds.

Mutual funds are organized by category/sector and sites such as Morningstar rank them according to other funds in the same sector and appropriate index.

Here's an example:

Also, there's a cost of my time and labor to manage funds, it isn't worth much of my time for a 1-2% improvement in returns.

I think you are making this too hard, JR. It doesn't make much sense to compare your returns to an average of related funds because lots of funds/ETFs aren't very good.

Taking your last comment first, not everyone has the time/inclination/ability to manage their own investments. And IMO not being interested is a perfectly valid reason for hiring someone else to do it. Not trying to change your mind on that point. I feel the same way about changing the oil in my car. I know how to do it. I prefer to pay someone else.

But some of your statements don't make sense to me, and apparently are confusing some other posters as well. Up above, you stated you were fine with your financial adviser under performing the index. But if your financial adviser simply invested in index ETFs the performance would be essentially the same. Why are you satisfied with paying him to do worse than the index?

And while not trying to change your mind, surely buying an index ETF would require no more time on your part than you are already spending interacting with your broker. If want to maintain a balanced portfolio with essentially zero effort there are composite funds that do all your re-balancing for you. Just fire once and forget. The 1%-2% fee doesn't sound like much, but over say, 20 years it turns out to be real money.
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