2 and 20, or 0.15 and zero?


Given that most people simply don’t have enough money to invest in the top tier hedge funds (these are the most consistently profitable funds), and are instead marketed funds from the more mediocre end of the spectrum, it is pays to consider the polar opposite of hedge funds: passive equity investments. Investing is not about buying hot products so we can look clever at dinner parties. No, it is about being sensible, boring even, and thinking about the long game. On this note, consider this recent post from econoblogger Felix Salmon:

‘Abnormal Returns is written by an anonymous private investor, who’s clearly torn today, after discovering that a diverse global ETF portfolio can be put together with an overall expense ratio of less than 0.15%, and the whole idea of investing one’s money oneself is becoming less and less attractive.’

‘It’s really hard to argue that there’s any equity in managing one’s own money any more, not when you can buy a handful of ETFs with tiny fees and just head to the beach.’

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