Message:

<p>[QUOTE=&quot;Del Pinto, post: 2093164, member: 73128&quot;]The stock market isn&#039;t ONLY winners, though. It&#039;s the Enrons, the Worldcomms, the Pets.coms and the Lehman Bros. (Remember that firm? How quickly stock investor pretend it never happened.) Hundreds of thousands of shareholder companies lost everything: they&#039;re simply OMITTED from your cherry-picked data.&nbsp; That fantastical &quot;7%&quot; ratchets down hard, if you get honest here.</p><p><br /></p><p>For example, on the safest established capital market in the world, 19th C. survivorship bias was calculated by unbiased economic researchers at 2% per annum. So how much worse in an emerging mkt like the USA, 1802-1870, 3-4%? And how much does that diminish your imaginary CAGR?</p><p><br /></p><p><a href="http://www.voxeu.org/article/has-equity-always-earned-premium-evidence-nineteenth-century-britain" target="_blank" class="externalLink ProxyLink" data-proxy-href="http://www.voxeu.org/article/has-equity-always-earned-premium-evidence-nineteenth-century-britain" rel="nofollow">http://www.voxeu.org/article/has-equity-always-earned-premium-evidence-nineteenth-century-britain</a></p><p><br /></p><p><br /></p><p><br /></p><p>FEES! Yes: why do you suppose that a retail investor would only spend &quot;1%&quot; to have someone manage his small money in 1802-1870, or even as late as 1950?&nbsp; Mutual funds had <i>much</i> higher fees 1926-80; low cost index funds were UNKNOWN until the 1970s.&nbsp; So what did the average retail broker charge the smallest clients in management fees, each year from 1802-1987?</p><p><br /></p><p>(Consider what it cost to own shares in the first US mutual fund, &quot;Massachusetts Investors Trust&quot; back in 1926. You paid a broker upfront, what, ~5%? MIT then charged 6% of earned income, annually. Simply calculating &#039;fund return&#039; omits these very real costs, still as high as 3.5% in 1949. Loads, trading costs, brokerage account fees: the compounded return of real dollars invested falls dramatically, <i>if we get honest</i>.)</p><p><br /></p><p>No, there&#039;s no such thing as a free lunch in equity investing! Tell us what it <i>really</i> cost, not &#039;Wall Street Make-Believe,&#039; thanks.[/QUOTE]</p><p><br /></p>

Your name or email address:

Do you already have an account?

• No, create an account now.
• Yes, my password is:
• Forgot your password?

Stay logged in