- Higher fees tend to correlate with worse investment performance, as suggested by research from Vanguard based upon the historical analysis of active and passive large-cap mutual funds.
- Research suggests that the lower the fees, the less likely that a fund will underperform its benchmark (which is good for the investor).
- Sound investing comes down to being able to differentiate between what you can control and what you can’t, and then doing your best to focus on the former while still maintaining a solid understanding the risks associated with the latter.
- Given that you can control how much you pay in fees, but not whether a fund will outperform, a passive approach has strong merit over an active one.
Continue reading → Passive is the New Aggressive (Part 4)