Norway fund chief warns at Davos of ‘very, very low’ returns for stocks as reported in the FT.
It is a time for some logic.
The average wealth manager charges around 2% per annum (including trading, underlying funds etc etc and etc) If the return is 20% each year, you pay away 10% of your money for others to manage it for you. That leaves 18%. You’ll pay some tax and you get what’s left.
If returns fall to say 5% per annum and you pay the same 2%, you pay 40% for the same job. That’s 4x as much. That leaves 3% and tax to pay.
Many investors will not question or ask difficult decisions of their wealth managers, which is good news for wealth managers. They carry on as usual. Thankfully some individuals will start to think more about the impact on their money. That will make it an uncomfortable ride for wealth managers.
“One reason people succeed is that they have knowledge other people don’t.” Tony Robbins
If you don’t have the knowledge to ask the right questions, you increase the chances of failure.
Investors should seriously question who manages their money and what value for money they are achieving. Period.
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