The latest biography on the world’s most famous investor is titled “The Snowball – Warren Buffett and the Business of Life.” The term “snowball” is a metaphor for a core investment concept: the Law of Compound Returns. Understanding it is critical to your success as an investor and should be at the center of all [...]
Category Archives: Law of Compound Returns
Do Your Homework To Understand Mutual Funds and Their Fees
Tuesday, April 13, 2010
The Supreme Court finally examined the problem with mutual funds with regards to their fees. The result – not much protection for the average retirement investor. The Court decided to rule against further legislation and to keep the onus of fee due diligence on investors. You can imagine that the $11 trillion mutual fund industry [...]
The Law of Compounding Makes Fees Quite Sizeable Over Time
Friday, February 5, 2010
Many do not flinch at paying 1-2% of their asset in fees to a financial advisor, but if one were to better understand the Law of Compounding one might look at 1-2% differently. The Law of Compound Returns is a force of nature. Simply put, the Law of Compound Returns says money left alone creates more money. [...]
Tracking 9 ETF Portfolios – Surprise Winners and Losers So Far in 2008
Thursday, September 11, 2008
The famous professors at Yale have proven that asset allocation accounts for 90% of a portfolio’s return and that stock picking and market timing account for less than 10%. So what a great time to look at how different asset allocations are faring in this market!
In 2008 it turns out that asset allocation decisions have everything [...]
