Passive Investing: The Evidence the Fund Management Industry Would Prefer You Not to See



http://sensibleinvesting.tv -- the independent voice of passive investing A remarkable 54-minute film featuring some of the world's top economists and academics and demonstrating: * how the claims of active fund managers to be able to beat the market are largely a myth * how costs are the biggest drag on performance - and why active costs more * how passive investing offers the best experience for the vast majority of investors * the benefits of a diversified portfolio in guaranteeing consistent returns * why passive investing is better for your health * why active investing has held sway for so many years.... * ... but why things may be changing * and why passive is the rational, mathematically proven route to investing success. Investing for the future... It's an issue none of can afford to ignore. No one's job is safe these days... How would you cope if you lost yours? We're all living longer too... So are you saving enough to fund 25 years or more of retirement? Can you really afford to pay for your children or grandchildren to go to university - or help them onto the property ladder? And what about all those holidays you promised yourself? We entrust the vast bulk of our investments to fund managers. Here in the UK, according to Her Majesty's Treasury, the industry has more than four TRILLION pounds of investors' money under management. Fund managers invest people's savings wherever they see fit - mainly in equities, or shares in listed companies. They claim to be experts at making our making grow, using their expert knowledge to pick the shares that will outperform the market. But all too often the returns they produce are considerably lower than the average return of a benchmark index like the FTSE 100 - or the S&P 500 in the States. For veteran investment guru John Bogle, the problem is simple. Fund managers just aren't as smart as they like to think they are. As it means trading against the view of numerous market participants with superior information, buying or selling a security is effectively just a bet. So, whilst your fund manager might lead you to believe it's his knowledge or intelligence that enables you to beat the market, he's really no better than a gambler. So, you might be lucky enough to choose the right fund manager. But you could just as easily pick the wrong one. According to the financial services company Bestinvest, there are currently nearly £10 billion of UK investors' money languishing in what it calls dog funds - in other words, funds which have underperperformed their benchmark index for at least three consecutive years. Ultimately, of course, fund managers are businesses. They exist to make money for themselves. They want our business - even if it means persuading us to invest in a fund which they themselves wouldn't want to put their own money in. It's now time to look at what it actually costs us to invest. Fund managers are, of course, businesses. And, like all business, they have overheads. Running a big fund management company doesn't come cheap - esepcially when top managers earn around £2 million a year, including bonuses. And remember, it's you, the customer, who picks up the tab. Ultimately, though, fund managers need to make a profit. In fact they'e making around £10 billion from us every year - and that's regardless of whether or not they manage to produce a profit for us. Part of the challenge is working out exactly what we are being charged. Investors typically use something called the annual Total Expense Ratio, or TER, to compare the cost of investing in different funds. But, the TER excludes dealing commission, stamp duty and other turnover costs that can add considerably to the expense of investing over time. So, apart from those hidden charges, what else are we having to pay? More importantly, what sort of impact do charges have on the value of our investments? And the bad news doesn't stop there. Despite a marked increase in competition, management charges in the UK have been steadily rising over the last ten years. There are some encouraging signs for consumers. The FSA's Retail Distribution Review will require fund managers to be fairer and more transparent when it comes to charges. In the meantime, investors should be on their guard. For more videos like this one, visit http://sensibleinvesting.tv

Comments

  1. I am trading with a secured environment of ECNCAPITAL. They have very strong security of their clients funds. They are giving guarantee of their trader’s funds in any kind of investment. Because if you found unsecured environment then how could you invest your money to trade? Regulated trading broker are mostly secured to invest money. My broker is a regulated trading broker. So who wanted to join in a secured environment can join them.
  2. "nobody knows nuthin" !
  3. Given perfectly efficient markets above normal returns can only be achieved through luck, thus index fund it is. Or risk free securities like government bonds.
  4. I appreciate Bogle's honesty and what he's built Vanguard into. That's why I invest almost my entire portfolio in low cost Vanguard index funds.
  5. I've been using Wealthfront for some time now. I would highly recommend it for beginners, and those looking for lower expense, yet quality (read: Vanguard, Schwab, iShares, etc) ETFs. Here is my link for an additional $5,000 managed free!

    Link: https://wlth.fr/2fw1mma
  6. Who wouldn’t like getting money when they aren’t even working for it all the time, right? This is exactly what this tool >>> https://www.facebook.com/BinaryOption-1048631025200309/app/190322544333196/ is providing to thousands of clients, who are earning quite a lot of money through it.
  7. I think the best companies are van guard and fidelity
  8. Don’t waste your time on other apps because I have done that myself and have lost quite a lot of my money. So learn from my experience and don’t go for these apps when you have something as beautiful as (https://plus.google.com/u/1/102135744004462700008/posts/CAEdYumaQRw) which is amazingly effective and very easy to use even if you are new in binary option trading.
  9. If you want to win over 85% of your trades and make over 200 dollars/day trading options online then go here: HootStocks. com
  10. Thanks for the video, very helpful!
  11. Good luck to those investing in passive funds over the next 5 years...
  12. So ETF's it is ...
  13. Excellent presentation and information!
  14. DCA TO A LOW COST INDEX FUND OR ETF.
  15. Why do shows like this always show city streets with people walking around? It's not relevant to nothin'!
  16. You might as well buy corporate and government bonds and hope for the best.
  17. 1-2% annual management charge, yet if the manager can get you a 10% annual return don't really think that the charge would have much impact
  18. The fund performance studies at the start of this video is complete BS, the studies where conducted in the worst time of the market, after 08 crisis and the dotcom bubble burst.
  19. All the people here saying fund managers just try tO make money for themselves are wrong. Proper investors do their research, fund managers have a track record they need to maintain and if you look at some top fund managers at top firms such has fidellity you can see they have avg returns of about 20-30% which is well above the market. Hedge funds make most their money on the 20% performance fee giving them an incentive to do well. Can't believe the amount of people here saying that actual, proper investors are frauds.
  20. Dow was 995 silver dollars and 995 bank dollar debt notes in 1966. Dow is 995 silver dollars or 18,000 paper debt note dollars fifty years later in 2016. In real money, US Treasury silver dollars there is no gain in fifty years. In counterfeited debt bubble paper debt notes the prices are higher. Why? The debt dollar has lost 95% of it's buying power in fifty years. It's simple fraud. Silver dollars would have equalled the Dow. It's just fraud, counterfeiting debt, debasing the paper debt notes. Get it? It's fraud.


Additional Information:

Visibility: 236925

Duration: 53m 54s

Rating: 1316