Author Topic: Investment management Fees  (Read 1540 times)

Much Fishing to Do

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Investment management Fees
« on: May 03, 2015, 10:39:27 AM »
Do any mustachians use an active investment manager paying the usual 1%?  Or would that be a very non-mustachian thing to do (both paying the fees and the somewhat active trading involved)? Seems like it would be impossible to justify paying someone 1% of your assets every year when that is 25% of your income based on a 4% safe withdrawal, but so many "normal" wealthy people do it I was wondering.

forummm

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Re: Investment management Fees
« Reply #1 on: May 03, 2015, 12:19:19 PM »
I think it's a very non-mustachian thing to do. In the Investor Alley section, pretty much every poster who mentions paying a manager a percentage of assets is advised to stop doing that yesterday. Some will advise that it's OK to get some advice on a fee for service basis. But if they are charging more than Vanguard to invest your money, you are lining their pockets at the expense of yours. Almost all active managers underperform the market in the long run (and frequently the short run too).

Monkey Uncle

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Re: Investment management Fees
« Reply #2 on: May 03, 2015, 02:00:45 PM »
Funny you should ask that question.  Just moments ago I was cruising the Schwab website, checking out their "private client" section.  My assets have reached the point where I can actually afford some of the minimums now, so I wanted to see if I was missing anything.  All of the strategies they offer charge somewhere in the neighborhood of 1%.  And almost every one of those strategies underperformed its respective benchmark over the 3, 5, 10 yr, and life-of-strategy time periods.

Nothing to see here.