Every year, you and I give up $530 billions of our returns to the middle people who claim they can outperform everyone else. Most can't and we lose. The average investor earned just 3.79% annually while a market index earned 11% over any period for 30 years. http://www.dalbar.com/Portals/dalbar/cache/News/PressReleases/DALBAR%20Pinpoints%20Investor%20Pain%202015.pdf
According to an unbiased Morningstar study, low-cost funds beat high-cost funds all the time. It is a myth of Wall Street that you must pay more for good performance. You are just paying for the Wolf of Wall Street's toys. Other Wall Street myths: Buy low, sell high; manager tenure; proven performer; get in on the ground floor; concentrate portfolio.
Warren Buffett, master investor, says "use low-cost index funds":
"A very low-cost index is going to beat a majority of the amateur-managed money or professionally-managed money."
Mr Buffett also said that his secret is compound interest:
My wealth has come from a combination of living in America, some lucky genes, and compound interest.
Compounding high investment returns is money earning money on its prior earnings over time.
Simple but powerful.
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