The Real Cost of Low-Fee Funds

The Real Cost of Low-Fee Funds
You Must Include the Cost of Risk When Calculating Total Cost
You Must Have a Quantifiable Hedging Strategy
Where is the Market Going?
Mastering the Market Cycle
What Should You Do Now?
Puerto Rico, Frankfurt, and Here and There

Today, rather than tackle some big macroeconomic issue, we’ll go back to this letter’s roots and look at market timing and portfolio construction issues. I expect this will get both enthusiastic support and at the same time, make a number of readers uncomfortable—if not annoyed.

Why? Because I am going to take on a number of shibboleths many hold sacred and dear. But after a great deal of thought over the last few years, I’ve come to realize that all too often, and this includes myself, investment advisors and investors tend to “talk their book.” We bring prejudices and biases into our portfolio construction, and then if it doesn’t work, we just call it “bad luck.” Let’s jump in.