“Few advisers want to say it, and no client wants to hear it, but your best bet isn't obsessing over funds and strategies but simply raising your savings rate.
The investment industry - and clients - are intensely focused on how to maximize returns, with much ink, brain power and tears spent on trying to divine which fund to choose and what strategy to adopt.
While this is entirely appropriate, and sometimes even fruitful, it is also, in many ways, a self-defeating diversion.
The truth is that the primary generator of wealth is earnings, and the only earnings that really count are those you don't spend but invest.
Deferring consumption is a much tougher sell than the alchemy of fund selection, and so the industry, with clients and advisers both complicit, spends far more time thinking of one than the other.
Putnam Institute has done a well-constructed study which looks at the impact of fund selection, asset allocation, rebalancing and simply saving more, and finds that over the long term delaying gratification is the name of the game.” Bottom line: it’s how much you save, stupid! By James Saft for Reuters. 9/13/12 Read details at: http://www.reuters.com/article/2012/09/13/us-column-investing-saft-idUSBRE88C10S20120913
Crystal Balls vs. Bag Lunches
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Reviewed by Pisstol Aer
Published :
Rating : 4.5
Published :
Rating : 4.5
