quote:
I tried to use MOrningstar too, but all I see is returns. No where do I see them tell you how much you had in costs. They just label expense ratio and are done with it. Or how much turnover in the fund cost them. Those funds had 28%, that has to incur some costs. Maybe I'm looking at it wrong.

The quotes on Morningstar comparison charts include expenses and fees in their total return. For example:

Going back to the VFINX fund's inception in 1976 through today, a $10,000 investment would be worth $368,692.70.

Compare that to AGTHX in the same exact time period, that same $10,000 investment would be worth, WAIT.........FOR.........IT, $1,155,560.60.

Now, I'd be happy to pay the additional fees for the additional return of almost $800,000. Wouldn't you?

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Posted by Teddy Ruxpin

Member since Oct 2006

39617 posts

Posted on 2/1/13 at 6:45 pm to Vols&Shaft83

quote:
Now, I'd be happy to pay the additional fees for the additional return of almost $800,000. Wouldn't you?

Well sure. I'd also like to know who won the Super Bowl before its played. You're betting on the Saints to win in 2009 with info from 2013.

What about this fund would have made you invest in it BEFORE you would have gained $800,000? What are the odds I pick this one and not others who didn't win by 800k?

And really that is the other crux of the indexer theory, that of course you can find winners after the fact, but not before. If it was so easy to pick winners, I'd imagine there wouldn't be thousands and thousands and thousands of funds to choose from, since by now, everyone would have aggregated to the winners.

Let me sum it up:

The theory goes that index will win more often than not. Also, it will win because of costs.

It doesn't propose that it never loses. It preposes the chance of you picking a winner is close to nil, therefore, you take the sure bet that will "win" over the long term in comparison to ALL the choices you had. I believe that correctly summarizes it. We can all pick winners after they won. I'll know who won the Super Bowl on MOnday, that is obvious. Today? Not so.

Well, unless Notre Dame is playing.