Financial Advisors Encourage Bad Behavior

Seeking financial advice is bad for your wealth. New research by top academics concludes that the advisor industry mostly reinforces bad behavior, rather than fixing it, even when clients start with a well-diversified, low-fee portfolio. High fees and commissions incentivize advisors to promote performance chasing and costly actively-managed products. The Market for Financial Advice: An [...]

How Friends Help Friends Become Indexers

You’ve learned to discount high-cost, actively-managed funds, ignore Wall Street brokers, and see the pitfalls of model ETF portfolios that use tactical asset allocation and charge high fees. You’ve seen the light and clearly understand why a low-cost index fund portfolio has the best chance to achieve your investment goal. Now you want to help [...]

Brutally Honest Investment Advice

Getting brutally honest investment advice is a necessity when managing your money. It will save you a lot of frustration in the short-term and a lot of time and money in the long-term. Unfortunately, there are very few places you can get brutally honest advice. Magazines, newspapers, websites, and investment advisors can offer honest advice [...]

Where Oh Where Have My Dividends Gone?

U.S. companies paid about $100 billion in cash dividends into equity mutual funds during 2011. Little of this money made it into the hands of fund investors. It was diverted to the fund industry to cover fees and expenses, and provide a healthy profit margin. This cash loss to shareholders creates a huge hole in [...]

SPIVA Spikes Mutual Fund Managers Again

Standard and Poor’s has been meticulously documenting mutual fund returns for the past decade and comparing them to appropriate indices. The latest results are now available in the bi-annual SPIVA Scorecard.  I don’t know how much S&P earns from doing this research, but I believe that active fund managers would pay a hefty sum not [...]