Quote:
Originally Posted by lukeh
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I know people like Vanguard because they are "cheap" and don't like load funds because they are "expensive" but sometimes I wonder if people focus to much on the fees and forget about the performance. Sometimes you do get what you paid for.
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not sure what all is included in those rankings - Vanguard has many actively managed funds for example.
The trick is whether you can pick (or pay someone not much money to pick) the funds...
I pay a small amt. to have professionals pick the funds with the best management, and I do use active funds mostly, not indexes.
The huge hit on expenses is with bond funds - you are not making that much anyway and the mgmt. fees will eat you alive there. In contrast, a reasonable mgmt. fee seems valid for a foreign stock fund where you really need some expertise to reduce risk, and where the returns should be higher.
I started out buying individual stocks when I hit the slaray big time with my post-doc (as a grad. student I made $7,000/yr and that went way up to $18,000/yr as a post-doc (or visiting ass. prof., as it was a bit more cheese than most of the post docs there got) - I didn't really care about spending money (except to fly to visit a gf & to go on my idea of a big vacation - backpacking & mtn. travel) so I stuck the "left over" $$ into equities.
The last para. is to emphasize that living cheap means you can accumulate bucks. And that is a very valuable investment tip.
Things like doing your own work on your German sports car can be fun and save $$...