William Dickens wrote:
>
> >Ie, why do people accept lower returns just for the >privilige of
> >picking the stocks themselves?
>
> Mostly because they believe they are smarter or more knowledgable than average and
>will outperform the market. I know some very sophisticated people who believe this
>(and at least some of them have portfolios that do outperform the market on a regular
>basis (note that this could be endogenous)). There is another reason howevr. Even the
>lowest cost index mutual funds have more overhead then you are going to have if you
>use a discount broker and buy and hold (and they hide these costs
Who is the "they" - mutual funds or discount brokers? And how are they
being hidden?
> - - I'm not talking about the loads or transactions costs you pay for some mutual
>funds, but the management and trading fees that get deducted form your investment
>each year). If your portfolio is large enough to allow sufficient diversification you
>can do somewhat better on your own - - particularly if you want to diversify beyond
>the S&P500. - - Bill
Discount brokers can really beat a .2% annual fee with no loads on
either end?
--
Prof. Bryan Caplan
Department of Economics George Mason University
http://www.bcaplan.com [EMAIL PROTECTED]
"He lives in deadly terror of agreeing;
'Twould make him seem an ordinary being.
Indeed, he's so in love with contradiction,
He'll turn against his most profound conviction
And with a furious eloquence deplore it,
If only someone else is speaking for it."
Moliere, *The Misanthrope*
