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Index Funds Vs. Active Management

I often read in the paper and hear from individual investors that index funds are the best investment for them given the funds low expense ratios.

When I make a presentation to someone and they are indignant about the fact that they may have to pay us 1.25% to manage their stock portfolio compared to 0.25% to own an index fund, I am amazed at how good of a job the index fund providers do in their marketing.

Our clients have enjoyed a > 14% annual average return over the last 9 years. As you can see from the graph above, people investing in the Vanguard 500 Index fund have averaged 0% over the last 9 years.

Hire us or any competent manager, don’t just passively sit back and earn nothing.

Mark