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> As long as I make money too and my retirement account grows what do I care if they take some off the top? You should care because for long term investing, an
by samjmck 6y ago
> As long as I make money too and my retirement account grows what do I care if they take some off the top?
You should care because for long term investing, an actively managed fund is very likely to underperform the market. The vast majority of hedge fund managers aren't doing anything that you couldn't do yourself, i.e. pick a few stocks out of the S&P 500 and hope that they outperform the market.
> The returns I get are way better than I could get on my own.
Look into index based ETFs. They simply track an index so your performance is equal to the market's, so no handpicking stocks or gambling. They are traded like stocks, so you can probably buy them with your broker. The best part about them is that they have almost no fees - the most popular ETFs cost 0.10-0.20% per year.
If you're American and believe that the American stock market will continue to outperform the rest of the world, then an ETF like SPY (tracks the S&P 500) would be a good bet. If you'd like something more diversified, have a look at funds tracking indices like the MSCI World or FTSE All-World.
- valzam 6y agoQuick note: There is also FTSE Developed World, which has outperformed All-World over the last few years AND has a lower TER than most All-World indeces. You can always hold 10% Emerging Markets + Developed World.
- samjmck 6y agoThe FTSE All-World has returned 82.5% over the last 5 years, while the FTSE Developed has returned 82.9% [1]. The difference is neglible if you ask me, and 5 years isn't that long anyway. The fees depend on the ETF you buy - in Europe, the difference between ETFs tracking All-World and Developed is around 0.08%. The biggest difference is that the Developed index "only" has 2000 stocks instead of the 4000 of All-World. Another issue in Europe is that the accumulating ETFs (more tax efficient in most countries) tracking the Developed index have low liquidity. 1. https://research.ftserussell.com/Analytics/Factsheets/Home/DownloadSingleIssue?issueName=AWD&IsManual=false https://research.ftserussell.com/Analytics/Factsheets/Home/D...