4 ms·

The punter does not win on average with stocks due to fees and spread.

by shric 2y ago

hermitcrab 2y ago
IIRC average stock market returns have historically been around 7% per year. Index funds charge around 1% per year. My stock ISAs have gone up pretty much every year (after inflation and fees).
- rfrey 2y ago
  Putting your money into an index fund is the exact opposite of what is being advertised, e.g. trading platforms optimized for day trading, complete with blinkenlighten and "learn to trade" mini courses teaching technical indicators and other voodoo nonsense.
  - hermitcrab 2y ago
    There is a reason they spend loads of money on ads trying to get you into day trading. ;0)
- lmm 2y ago
  > Index funds charge around 1% per year. You're getting ripped off, you should be paying a small fraction of that.
  - hermitcrab 2y ago
    Vanguard UK charge 0.06% to 0.6% per year on their index funds: https://www.vanguardinvestor.co.uk/what-we-offer/all-products https://www.vanguardinvestor.co.uk/what-we-offer/all-product... Plus a 0.15% account fee: https://www.vanguardinvestor.co.uk/what-we-offer/fees-explained https://www.vanguardinvestor.co.uk/what-we-offer/fees-explai... Most others charge more.
    - lmm 2y ago
      That 0.6% one is actively managed. The true index funds on that list are charging 0.2% or less (0.12% for most of the ones you'd want). So 0.27%-0.35% all-in. I stand by 1% being be a rip-off.
- quickthrowman 2y ago
  1% is quite extreme, the S&P 500 fund I use (FXAIX) charges .015% per year which is almost 70 times less expensive than 1%.
  - shric 2y ago
    Indeed, I am mostly in ASX:IVV (another S&P 500 ETF) and it charges 0.04% per year.
- eviks 2y ago
  > Index funds That's not what the ads for the stock trading platforms want you to do
- shric 2y ago
  I was very careful with my words. I said: > The punter does not win on average with stocks due to fees and spread. Literally 100% of my investing is the stock market. I have so much faith in the stock market that I rent because I don't want to waste the opportunity cost on equity in property. A punter is informal slang for a person who gambles. I buy and hold a diversified portfolio of index funds over decades. I am very much not a punter.
  - hermitcrab 2y ago
    It seems there is more than one definition of 'punter'. I meant it as 'customer/client'. But other sources define it as 'a person who gambles, places a bet, or makes a risky investment'.
    - shric 2y ago
      I'm only familiar with the latter definition. My mistake I guess.
      - hermitcrab 2y ago
        >My mistake I guess. Not really. There just seems to be more than one meaning, and we were each aware of different ones. The meaning might vary by country (I am in the UK).
        shric 2y ago
        It was a mistake because I got downvoted by issuing a correct statement (if punter is interpreted as a gambler). I am from the UK but moved to Australia about 35 years ago
        hermitcrab 2y ago
        >It was a mistake because I got downvoted by issuing a correct statement (if punter is interpreted as a gambler). I wouldn't lose any sleep over it. https://xkcd.com/386/ https://xkcd.com/386/ ;o)

The punter does not win on average with stocks due to fees and spread.

by shric 2y ago

The punter does not win on average with stocks due to fees and spread.

IIRC average stock market returns have historically been around 7% per year. Index funds charge around 1% per year. My stock ISAs have gone up pretty much every year (after inflation and fees).

rfrey 2y ago
Putting your money into an index fund is the exact opposite of what is being advertised, e.g. trading platforms optimized for day trading, complete with blinkenlighten and "learn to trade" mini courses teaching technical indicators and other voodoo nonsense.
- hermitcrab 2y ago
  There is a reason they spend loads of money on ads trying to get you into day trading. ;0)
lmm 2y ago
> Index funds charge around 1% per year. You're getting ripped off, you should be paying a small fraction of that.
- hermitcrab 2y ago
  Vanguard UK charge 0.06% to 0.6% per year on their index funds: https://www.vanguardinvestor.co.uk/what-we-offer/all-products https://www.vanguardinvestor.co.uk/what-we-offer/all-product... Plus a 0.15% account fee: https://www.vanguardinvestor.co.uk/what-we-offer/fees-explained https://www.vanguardinvestor.co.uk/what-we-offer/fees-explai... Most others charge more.
  - lmm 2y ago
    That 0.6% one is actively managed. The true index funds on that list are charging 0.2% or less (0.12% for most of the ones you'd want). So 0.27%-0.35% all-in. I stand by 1% being be a rip-off.
quickthrowman 2y ago
1% is quite extreme, the S&P 500 fund I use (FXAIX) charges .015% per year which is almost 70 times less expensive than 1%.
- shric 2y ago
  Indeed, I am mostly in ASX:IVV (another S&P 500 ETF) and it charges 0.04% per year.
eviks 2y ago
> Index funds That's not what the ads for the stock trading platforms want you to do
shric 2y ago
I was very careful with my words. I said: > The punter does not win on average with stocks due to fees and spread. Literally 100% of my investing is the stock market. I have so much faith in the stock market that I rent because I don't want to waste the opportunity cost on equity in property. A punter is informal slang for a person who gambles. I buy and hold a diversified portfolio of index funds over decades. I am very much not a punter.
- hermitcrab 2y ago
  It seems there is more than one definition of 'punter'. I meant it as 'customer/client'. But other sources define it as 'a person who gambles, places a bet, or makes a risky investment'.
  - shric 2y ago
    I'm only familiar with the latter definition. My mistake I guess.
    - hermitcrab 2y ago
      >My mistake I guess. Not really. There just seems to be more than one meaning, and we were each aware of different ones. The meaning might vary by country (I am in the UK).
      - shric 2y ago
        It was a mistake because I got downvoted by issuing a correct statement (if punter is interpreted as a gambler). I am from the UK but moved to Australia about 35 years ago
        hermitcrab 2y ago
        >It was a mistake because I got downvoted by issuing a correct statement (if punter is interpreted as a gambler). I wouldn't lose any sleep over it. https://xkcd.com/386/ https://xkcd.com/386/ ;o)