In no particular order, here’s a few interesting things I heard and read recently that I wanted to share:
The Great Fund Fee Divide (Barron’s, by Reshma Kapadia)
You want to know what I love about this article – EVERYTHING. Well, it may be boring to some people, but if you want to know more about where the mutual fund industry is headed from a fee standpoint….you will learn something here. The bottom line is there are fees with all mutual funds, and as the industry becomes more transparent there will be fee compression. This would be a good thing for investors as investments are forced to become more and more competitive. Over my 20+ years in the business, I have trended away from mutual funds and more towards lower cost products such as ETFs (aka exchange traded funds). Part of the reason is because I want to make lower cost portfolios for clients – and pass along the cost savings. The other part is because I operate on a fee-only basis, and do not make any more or less money depending on the type of product nor how much buying/selling takes place. Now, I will say that a fund’s expenses are not the only factor to evaluate – in fact, it could make sense to pay higher funds expenses if the investment is producing returns that outweigh the costs. But overall and in most cases, reducing costs is not a bad thing…particularly if returns of the higher cost investment is very similar to the lower cost investment. This has to be confusing to the average investor: not only do mutual funds have various share classes that contain internal expenses…there could also be minimum hold times and other marketing fees (aka 12b-1 fees) involved. In this prolonged bull market where people have become (…ahem…) complacent, it might not matter much. But if we get a pullback, I would think this topic would come into the spotlight a little more – as people would want to become more fee-conscious.
Improving Your Relationship With Money in 2018 (Forbes, by Michael F. Kay)
Look, I have never been “into” New Year’s Resolutions because if there is something I want – I usually just go for it, regardless of the day/month/year. But because most people are not like me, I wanted to share this insightful piece which provides some solid talking points. My wife also thought this article was interesting, especially since it mentions one of our favorites – Simon Sinek. My favorite tip: consider the potential roadblocks and surround yourself with those who have expertise and support you to get you where you want to go. A close second favorite, is to break things down into smaller steps. I used to fall guilty to this myself, especially when faced with a big project. It’s so easy to just have that “deer in headlights” feeling, not knowing where to start and garnering enough energy to get going. But if you break down the larger task into smaller, manageable steps, I found it much easier. Some tips I would share are first, while keeping the BIG picture in mind, figure out what the step-by-step process needs to look like. Second, come up with a logical order of what needs to happen first, second, third, etc. Then create a timeline for each step even give yourself a deadline to complete it. Adding it to your calendar will keep you on point. And if you stick to the timeline, you should allow yourself time at the end to review (or fix unexpected issues that may pop up). Good luck with your resolutions in ’18!
No one can pull you down (if you are doing these four things) (StartupsVentureCapital.com, by Daniel Truex)
For an energizing and feel-good read, check out this self-help piece by Entrepreneur Dan Truex. It bullet-points how to get out of the mediocrity rut and into the mindset of producing extraordinary results. Some of the lessons are similar to what I posted before, in that one needs to put in time/effort/energy/hours into something before they can reasonably expect to be doing great work. Some have said that a minimum of 10,000 hours needs to be put in before one can actually become great (yikes, that’s a lot!). The reality is that someone can do nearly anything, if they put their mind to it. While you may never achieve the “great” status, you can at least say that no one kept you down! So if you are feeling in a rut, spend a few minutes and pick up some ideas that might help get you going.
Enjoy the light reading!