Excessive Fees Will Eat Up Returns
Betterment CEO Jon Stein was recently published in The Huffington Post, discussing the importance of cost in investing.
Here are the highlights:
1. Cost does matter: A study by Morningstar found that low-cost funds outperformed high-cost funds in every single time period and data point tested. Low cost is the first thing to seek when selecting your investment account (401(k), IRA, regular investment account).
2. Know your cost: Many employers have no idea what fees they and their employees pay for 401(k) plans, a recent report shows. Thankfully, a new rule means 401(k) charges must be fully disclosed. Arm yourself with all the info – and move your money into an IRA if you’re being overcharged.
3. Success for all: Understand how you pay for your investment. If a broker makes money when you spend money, something’s wrong (ditto for high AUM fees).
4. Beware of those touting the secret sauce: they’re not telling the truth! Check out our recent blog post on this too.
Read the full article on The Huffington Post.
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