Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

In this Discussion

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.

    Support MFO

  • Donate through PayPal

The car I selected, and the investing reasoning I used

I was deciding between a VW GTI, Audi A3, and BMW 230i. No boring index fund (would that be a Camry?) for me.

I wanted performance (high returns) a smooth ride (low risk/volatility), something that wasn't too expensive to buy (no load) or to operate/repair (lower ER), though I was willing to pay up for what I wanted. I was willing to travel out of state to get what I wanted (find a broker offering the fund). I did not care what the nameplate (fund family) was.

I eliminated the BMW first. Someone here suggested I look at repair/maintenance costs. While German cars do tend to have higher maintenance costs, BMW's seem to be stratospheric. Add to that the highest purchase price (with fewest features on the base model), and one sees a car that's too expensive, regardless of its performance. Likewise, there are top performing funds that I simply won't buy because they are IMHO excessively costly, and who knows when they'll break down.

I never even got to test driving the BMW - two months and the local dealer never had one in stock to try (apparently low demand). I like buying things that not everyone owns, but when demand (or AUM for a fund) remains very small, it raises questions. I also didn't like the idea of no spare tire and the harsher ride of the requisite run-flat tires.

The A3 and GTI are siblings - same platform. Perhaps something like BIMIX and BCOIX. Same management, same broad category (compact car, intermediate bond fund). Similar underlying components (engine, bonds). For the same cost, BCOIX adds a dollup of junk bonds and provides better performance (albeit with modestly higher risk). For roughly the same cost as the base A3, you can get a higher end GTI trim with added safety and comfort features.

The GTI loses on style, but what I want in a vehicle (whether literal or financial) is something that performs well and gets me where I want to go - smoothly, safely, and with some fun. I went with the GTI.


  • Consumers recent issue addresses cost of owning various brands. Audi is high, but not the highest. BMW is the worst, with VW about in the middle. You could have driven a Camry for very little. We are a Honda family looking for a late-model Accord to replace our 2007 V-6. May go hybrid.
  • nifty analogizing
  • Given the recent scandalous and unethical behavior from the makers of Volkswagen you missed the opportunity to connect that manufacturer to a certain bank and quickly eliminate the GTI from contention.
  • Never thought about it in this way, msf. Nicely done! Guess there is some carry over in our family as well. We want something sturdy but a bit different, not too fancy, ok mileage but uppermost in mind is safety with comfort. Is that why we are the owners of two Subaru vehicles? It is sort of how my combination of passive and active funds/ETFs looks when viewed from afar.
  • I've had a BMW 328 for a year now. Great car (and no cheating company).
  • edited August 2017
    I had an '05 Acura MDX for 11 years and loved it - low TCO and great ride. I tried a BMW x3 SUV and after 3 years hated it -- not only were there so many others on the road, but I needed more legroom following foot surgery. (You can't remove the stupid footrest/deadpedal on the left side, which jerked my foot into an odd position.)

    I traded it on and side-graded into a BMW 340xi last Nov -- it's a BMW 3-series *hatchback* .... there are not many of them on the road (stroke the ego a bit) but I have more legroom AND trunkroom in this thing than I did in their SUV, plus a tad more power as well. The thing is truly a joy to drive and makes my 80-mile roundtrip to campus 3x weekly much more comfy.

    Maintenance is covered the first 4 years ... after that, I'll see what happens and/or what I might do.
  • I'm planning to keep my 328xi for a long time.
  • Regarding diesels and cheating companies - I'd thought about that (though more in terms of MF scandals than bank "improprieties"), but I figured that was a whole 'nuther thread, perhaps tacked onto ESG.

    Not trying to dive into this ethical/legal quagmire here, just giving a sense of how far into the weeds one can go with this ... Not simple questions, but people are right, there are more parallels here.
  • What! No Tesla or other alternative fuel (Nat, gas, electric = niche funds) try outs?
  • msf
    edited August 2017
    Nice observation.

    I would not be able to plug a car in at home (and couldn't see parking at Whole Foods every time I needed refueling). Otherwise I would have loved to have looked into the Model 3.

    In the case of Tesla, one isn't just looking at a niche fund, but a startup company where the founder/fund manager has a track record but the company's prospects are still unknown. Will the fund be able to survive while absorbing expenses? Will the manufacturer be able to get production costs under control so that it doesn't sell below cost to the mass market?
  • Audi did not run a prototype at Le Mans in June, reportedly because of the diesel scandal. I think it's a matter of time before Audi suffers the same indignity as VW. It's really a shame about the Europeans not making the diesel passenger cars clean. I have driven diesel rentals in GB, France, Germany, Spain, etc. at different times in the past 20 years and I was always impressed with performance and mileage.
  • "It's really a shame about the Europeans not making the diesel passenger cars clean. I have driven diesel rentals in GB, France, Germany, Spain, etc. at different times in the past 20 years and I was always impressed with performance and mileage."

    Yes, likewise. I agree with you re being a shame, in more ways than one.
  • Hey msf, I resemble that remark:)
    No boring index fund (would that be a Camry?)
  • @msf, you are talking about me, except our family drive Honda. Interesting analogy to investing choices and consideration. Would drawdown and recovery be equivalent to crash test?
  • edited August 2017
    I'll note that this car comes front loaded with a turbocharged engine. But is reported to handle sharp curves with ease - useful in the event markets turn turbulent.
  • I'm not sure about recovery, but drawdown might line up with depreciation. I buy cars/investments for the long haul, so I want something that is sturdy and will carry me for many years. I definitely want the vehicle (car, investment) to be able to survive a crash (accident/market plummet).

    Turbocharging - yeah, that's something I generally avoid in investments - not leveraged, nothing too esoteric. That's not to say I don't buy some funds that have a little more oomph, though I try to keep them on the more "refined" side, like the car. Nothing that bops around from top decile to bottom with little in between.

    A friend suggested looking at the Subaru WRX, but this USNews comparison is fairly representative: "The WRX is the more powerful, ... the more track-ready ... but the GTI is no wimp either, and [it] ... may win over buyers who are willing to trade about 50 horsepower for a more refined daily driving experience. ... If you want a car that’s pure power, go for the WRX. But if you’re looking for something that you can commute in easily, and then take to the track after work, go for the GTI."

    Not only does it handle sharp curves, it can adapt to different conditions (asset allocation funds) with a variable suspension that can be stiffer on those curves, but more forgiving on the day to day potholes. (General overview, VW-specific, and VW tech details for wonks.)
  • We are a Honda lovers past 20 years, includes 1 Acura for 4 years. My 2014 lease is up Sept but requested an extension for 2-3 months. The 2018 Honda Accord is due out Sept or Oct. It's a totally designed car and I'm interested is seeing it. I know new cars can be troublesome but I have a lot of confidence in Honda if it stays in my price range.
  • And then there are other perceptions (ESG funds?). We have an Airedale Terrier and a Portuguese Water Dog, so we need some volume. This is my wife’s car, so it can’t be TOO big. She refuses to have an SUV, so that pretty much leaves a station wagon. She was happy as a clam with her Subaru Outback, but in 2010 it became an SUV, in her opinion. No good.

    In the Subaru, the dogs could fit in the back seat with three large suitcases in the way-back. Life was good. I really wanted to like the BMW 3-series wagon. So, I hauled the suitcases to the dealership (and my whitewater kayak, but that’s another issue). Didn’t fit in the 3-series wagon. Or the 5-series wagon. Or those goofy looking 3- and 5-series Gran Turismos. And I thought the leather seats felt suspiciously like plastic, compared to Volvo sport seats.

    On to the Volvo dealer to look at the AWD V60. Suitcases? Check. Kayak fits in the passenger side between dash and tailgate? Check. Drivability? Fine. Fancy electronics to annoy wife? Check. Wait, What? They’ll pay our way to Göteborg to pick it up in Sweden? Pay for two weeks’ driving insurance and ship it home for free? Factory tour and Swedish meatballs in the company cafeteria? For less than the dealership would sell it off the lot? Sold.

    (Seriously, if you are considering a Volvo, you need to at least look at Overseas Delivery. is a site run by a dealer rather than the company, but does a better job of explaining the details.)
  • Classification problems are another similarity between funds and cars. There's Lipper and M* and others, and how you classify affects how the vehicle is perceived.

    You have US News including the GTI in its June 19, 2017 article, 11 Best German Sports Cars, along with cars like the 911, Boxter, M2, 4, and 6, R8, even the $200K+ AMG SL65. (Ridiculous - I'm not suggesting the GTI is in that class.) At the same time, US News ranks it fourth in "Compact Cars", and also ranks it among Hatchbacks.

    Form, size, function. All different groupings. When you buy a growth fund, do you want a high octane fund, or GARP (growth at a reasonable price)? Do you want something large and stable, or something smaller with a bit more maneuverability?

    SUV, crossover, sedan/coupe, station wagon, hatchback. Large or small (but large enough for cargo/dogs). Everything's gotten so blurred. My best guess (feel free to correct) is that SUV and crossover indicate height (vs. the lower seated vehicles). SUVs are built on a truck platform, the others on car platforms. Hatchback vs. station wagon may be in seating/rear opening - station wagons providing more seating and/or easier gate access for people. Not sure where that fits in with your dogs - are they "people" or "cargo"?

    A number of European manufacturers have a European delivery option. Had I gone with BMW, I likely would have done that. But Audi dealers seem to give higher discounts so it would cost more to go Germany for delivery. Glad to hear you could get a nice trip out of your Volvo purchase. (Even if I could have, I don't think I really would have wanted to take delivery of my car in Mexico - I might have had to drive it all the way home.)
Sign In or Register to comment.