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One almost honest Wall Street Guy April 12, 2010

Posted by shaferfinancial in Finance, Uncategorized.
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Jason Zweig, writing at the Wall Street Journal has opened the door for some honesty.  Now he hasn’t been completely honest about the real returns investors get from mutual funds, but he has opened a door of perception, which is a start.  Now he is not my favorite Wall Street propagandist, because he edited a Ben Graham book and added in his thoughts on mutual funds, which took Graham’s work in a direction he would not of approved of IMHO.  Note that the few honest money managers are saying you have to save more, in order to make up for the lack of returns they are likely to get for you.   And also note that the majority of money managers over promise and under deliver.  This is the result of not looking at the reality of returns they have gotten and of course always thinking they are better than their record really is.  

Yet, there it is, in black and white, you can only hope to beat inflation, fees and taxes by 1-2% making it mathematically improbable to replace your income by only investing 10-12% of your income for 30-35 years!  This is the truth I stumbled on 12 years ago that led me to change my investing philosophy!  Hopefully this truth will seep into your consciousness too!

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