If you pay an individual or a big company to invest your money for you, you should be aware of the fact that there is an extremely convincing case that you are foolishly throwing your money into the garbage can.

This is not even a secret! It has been amply demonstrated many times before that "active" investment management—which means you paying a smart guy in a suit to pick where to invest your money, on the assumption that he will give you a better return than you could possibly get on your own, because hey, he's a professional, and has a nice suit—does not generally pay for you, the investor, once you subtract the fees that you pay to these god damn investment advisers. And yet the industry persists! Today, there is yet another study out, this one from State Street, containing a variety of numbers that show quite plainly that the entire Guy In A Suit Charging You To Invest Your Money industry is one big ripoff.

"In total, the industry generates approximately $600 billion in active fees every year." Six hundred billion dollars we hand over annually to these investment managers in order to help us "beat the market." The concept of "beating the market" is referred to as generating "alpha," and it is the entire reason that we give $600 billion to these people in the first place. And how do they do? Well, in 2006, "the percentage of funds delivering 'true' alpha [meaning from skill, not luck] had shrunk to only 0.6 percent."

Zero point six percent. That is the chance that you have of selecting a mutual or other fund that will actually be worth what you pay for it. It is also, by the way, the chance that the person you pay to select funds for you has of selecting a worthwhile fund. It is not a good chance, in either case. So when the report notes that "only 49 percent of investors believe their provider is acting in the investors' best interest," the only real question is why that percentage is so low.

Perhaps you should just pick mutual funds on your own? You will still almost certainly lose! Consider: "researchers followed the returns of 715 US stock mutual funds, which had posted top quartile performance as of March 2010. Only two of the funds persisted in remaining in the top 25 percent throughout the subsequent four-year period (March 2010 to March 2014)." If you believe that it makes good sense to pay a premium fee to a mutual fund manager who has a 2/715 chance of having just four good years in a row, you are exactly the sort of sucker to whom the mutual fund industry would like to send a glossy pamphlet full of stock photos of attractive business people.

You can buy extremely low-cost index funds from companies like Vanguard that seek only to match the market, not to beat it, and you will save yourself a boatload of fees that you would have otherwise paid to Some Guy In A Suit who is no better at "beating the market" than you are, in all likelihood. There is $600 billion to be saved. We can spend that on candy.

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