This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

How Wall Street Eats A Third Of Your Savings And Makes You Work Longer

What if those fees paid off?

The illustration above assumes that the chosen mutual fund provided no value for its 1.5% fee. This is consistent with the overwhelming evidence that the majority of actively managed funds (those that pay a management team to pick the investments within the fund) do not outperform a relevant index fund (which just buys all the investments within the index, and saves a lot of money in the process). But approximately a third to a quarter of actively managed funds do outperform index funds. In these cases, the funds earned the fees they charged you.

Or perhaps you're paying an investment advisor, who is helping with your decisions about asset allocation - i.e., how much to invest in U.S. stocks, international stocks, bonds, cash, etc. Plus, the advisor might be providing financial-planning services, such as calculating whether you're saving enough for retirement or offering tax-saving tips. Assuming the advisor is providing good advice, this may also be a case where the fees are more than justified.

But if you've chosen either or both routes - investing in actively managed funds and/or hiring an investment advisor - make sure you're keeping tabs on the costs and benefits. Empirical evidence as well as my own experience tells me that many investors are paying too much for too little. Or, again in the words of Schoolhouse Rock, “Hey! That's not fair, givin' a guy a shot down there.”

(“Darn, that's the end.”)

3 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $94.02 -2.67%
FB $104.07 -5.81%
GOOG $683.57 -3.45%
TSLA $162.60 -7.26%
YHOO $27.97 -4.05%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs