In this episode, Mark talks about how if you don’t understand how a return was accomplished, how do you even understand the amount of risk taken to get that return? The power of knowing what you own and why you own it. Most of the time markets are going up and people are happy with status quo - just happy their investments are going up for the year. Most people do not know or understand risk adjusted return. A mutual fund is not an investment, an etf is a vehicle, and fees are relative. The fee may be the dollar amount you pay but what are the other values you’re getting? It is extremely difficult for the average investor to look at a return and fully understand what that means. Sometimes nicer things cost more money - investing and saving are different.
October 5, 2017