Low Cost - a critical difference
The lessons of the last fifty years show that investors can稚 control some things. But among the most important levers that they can control are costs and fees.
Low costs can help to turn good investments into great ones and high costs can smother all but the most extravagant returns. Many costs are not readily apparent, and while it is true that there is no free lunch, a discriminating investor can make intelligent choices.
One way to keep costs low is to cut the number of transactions. The typical mutual fund turns over its entire portfolio each year in the fruitless hunt for more attractive securities.
By contrast, asset class investors save by buying a tiny bit of everything in the class and realizing the underlying economic return.
Another potential source of savings is in management fees. While many fees are hidden, they all impact results.