When you examine long-term performance data, what you learn is that investment fees that seem reasonable in the short term can be devastating in the long term. Devastating? Yes. The longer you invest, the smaller the performance difference between entry into the top 25 percent of performers and entry into the bottom 25 percent of performers. The difference is so small that over 15 years it may amount to less than you pay in fees. In other words, what you pay in management fees, all by themselves, can wreck your investment performance. This is why I often refer to professional money management as an iatrogenic illness – a treatment that is worse than the malady it purports to cure.
When you examine long-term performance data, what you learn is that investment fees that seem reasonable in the short term can be devastating in the long term.
Devastating?
Yes. The longer you invest, the smaller the performance difference between entry into the top 25 percent of performers and entry into the bottom 25 percent of performers. The difference is so small that over 15 years it may amount to less than you pay in fees.
In other words, what you pay in management fees, all by themselves, can wreck your investment performance.
This is why I often refer to professional money management as an iatrogenic illness – a treatment that is worse than the malady it purports to cure.
