Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
@ Edward: Thanks for the above article, in this month's commentary. I was wondering if anyone is using the above mentioned , indexing & ETF's, to lowering their costs & therefore put a few more bucks into one's pocket. After rolling two 401-ks I'm thinking of doing something like this with 1/3 of my assets. Thanks for any & all replies, Derf
A factor that affects returns about as much as expense ratio is turnover. Here's an old but readable column citing research from a decade ago supporting the thesis that trading costs amount to at least as much as costs included in the ER: https://www.advisorperspectives.com/pdfs/newsltr27-2.pdf
I tend to lean toward managed funds, but at the same time I also keep an eye on expenses, both documented (ER) and implicit (trading costs via turnover). FWIW, with the exception of a few placeholder positions I have (in case I ever want the funds), and one major bond fund holding, all of my funds have less than 50% annual turnover. Of those, all but one fund has under 40% turnover.
M*'s portfolio analysis claims that my weighted average ER is about a half percent below a "similarly weighted hypothetical portfolio". So while my expenses are not rock bottom, I'm satisfied with my average expense ratio too.
One minor gripe concerning the cited AAII article - it uses RMDs as withdrawal amounts. The main problem with this is that people's need for cash in retirement is fairly stable, as opposed to RMDs. RMD calculations require you to take 1 / (remaining lifetime), which grows exponentially as you get older and your expected lifetime shrinks toward zero.
Comments
https://www.advisorperspectives.com/pdfs/newsltr27-2.pdf
I tend to lean toward managed funds, but at the same time I also keep an eye on expenses, both documented (ER) and implicit (trading costs via turnover). FWIW, with the exception of a few placeholder positions I have (in case I ever want the funds), and one major bond fund holding, all of my funds have less than 50% annual turnover. Of those, all but one fund has under 40% turnover.
M*'s portfolio analysis claims that my weighted average ER is about a half percent below a "similarly weighted hypothetical portfolio". So while my expenses are not rock bottom, I'm satisfied with my average expense ratio too.
One minor gripe concerning the cited AAII article - it uses RMDs as withdrawal amounts. The main problem with this is that people's need for cash in retirement is fairly stable, as opposed to RMDs. RMD calculations require you to take 1 / (remaining lifetime), which grows exponentially as you get older and your expected lifetime shrinks toward zero.