Enter

Matters of Principal and Interest

In Economy on July 26, 2013 at 1:05 AM

July 26, 2013

Here is the math regarding your savings (see attachment).

If you invest $1,000 each year for forty years in an index-fund earning 3% yearly, then your total net return will be $37,663.30 at retirement.  If you invest $1,000 each year for forty years in a day-trading fund earning 3% yearly (one that assumes a typical 2% yearly fee), however, then your total net return will be $12,554.43.

Now enjoy the comfort of realizing that such a broker who is day-trading your savings will be taking away 67% of your market return.

“Gross market return, minus costs, equals net return,” according to John Bogle, founder of Vanguard Group.

Evidently, he was right in 2006 and he is right now.

http://www.pbs.org/wgbh/pages/frontline/business-economy-financial-crisis/retirement-gamble/john-bogle-the-train-wreck-awaiting-american-retirement/

http://www.c-spanvideo.org/program/Critique

Regards,

James Breedlove

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s