Here's part 17 of the series from top personal finance bloggers offering their single-best piece of advice. Today, we'll hear from the Canadian Capitalist who says:
"Many investing gurus like Warren Buffet, John Bogle, Burton Malkiel and Jeremy Siegel, think that stock market returns over the next 10-20 years are likely to be modest (in the 6-8% range). In this low-return environment, it is especially important to pay close attention to frictional costs like mutual fund fees, trading commissions, taxes etc. It is foolish to pay 2.7% in mutual fund fees (the median equity fund fees in Canada), when the long-term returns are in the 8% range. Like many bloggers have pointed out the easiest way to accomplish this is to invest in a diversified portfolio of low-cost index funds or ETFs representing different asset classes and holding them over the long-term."
Yikes! 2.7%! I recommend not investing in any fund with an expense ratio over 1% unless you have a very good reason for doing so.
I personally invest in index funds for the majority of my investments, and I do so through Vanguard, which has some of the lowest expenses in the industry. Every tenth of a percent saved on fees is that much more money available to you, so keep a close eye on expenses.
For all of you readers, this is the last post in this series (and you thought it was never going to end!). I hope you enjoyed it, got a lot of great information, and were introduced to some new, wonderful personal finance blogs.
Thanks for the great series, some really useful stuff (and yes I was wondering how long it would go on for!).
Posted by: Rob Lewis | July 14, 2005 at 07:05 AM
Fantastic series! I'm actually sorry to see it end.
Posted by: geoff | July 18, 2005 at 07:03 PM