But honestly, the funds are such a lame way of investing with the charges they take. The individual shares in total have earned far higher dividends over the years, and somewhat higher total capital growth as well.
often, yes. i own three funds in the form of etfs in my “for fun” portfolio. their expense ratios are .03 percent, .05 percent, and the highest vgt is .1 percent. zero commission traded and no cost drips that allow partial shares. though i’ve never been with a broker that charged for drip or didn’t allow partial shares from drips. and zero commission trading has become standard even for company shares in the last year.
lesser regulation surrounding etfs has made it possible for middle class investors to buy funds with minimal expense ratios that would have prohibitive minimums in the form of true mutual funds.
and my net (as in after expense, not tax; it’s unrealized) rate of return on vgt is over 30 percent in 2 years and 3 1/2 months. that’s the time period since the position was initially started and the return on all the money i’ve put in to it since. i’d need to get my laptop out to check the rate of return on the initial investment.
i’m sure the funds in my 401k are stuck and bleeding, but starting a 401k when you were too green to know about that isn’t exactly something to regret.
that said, i own and have owned shares of companies that have doubled in a little more than that amount of time. but i’ve owned shares of companies that have become worthless and required the broker to dissolve the position because there was literally zero demand (there’s some term for that i cannot remember). well i’ve only made that mistake once because brokers usually charge a fee to get rid of that position for you and also have a fee for holding worthless positions (got it waived the first time and made sure not to let it happen again). but i’ve sold others right before it got to that point, taking almost a complete loss.
only fund i’ve ever lost money on was an eft tracking oil futures. that doesn’t count and i now understand how silly it was.
in the grand scheme of investments, these passively managed funds are actually high risk. so they’re probably not appropriate for most retirees living off of their investments. i chopped your quote and kinda got off track of the original context. it’s just that shares of individual companies are about the highest risk.
warren buffett said — or it’s a popular rumor — he wants his wife to move their money to an ultra low expense ratio s&p tracking fund when he dies. but she’s not gonna be pressured into selling low like a normal person could.
