Disadvantaged Masses

Yesterday, I listened to one of my favorite television shows, Wealth Track. Yale's Endowmment Manager David Swenesen was interviewed and shared some words of wisdom. The individual investor is at a disadvantage. Many investors do not know what their IRA, 401k or ESA owns. The truth is most mutual fund managers underperform index funds. The other truth is that mutual funds want large amount of assets under management to increase the fee income they generate. The problem is that the financial service institutions who receive your weekly payments or lump sum deposits do not have your best interest at heart. The stock broker wants you to make money but he/she needs you to trade and make as many transaction as possible. The mutual fund manager needs to increase assets to make more money for themselves and the firm. Your bank wants to give your money and forget about so they can make loans without worrying about withdrawing deposits. Even thought your 401k gives you a large basket of funds to choose from, they all will underperform the index benchmark. Investors must read and educate themselves. The expert on television makes $1o million annually because you pay him to perform his job in a mediocre way. Investors must take their future into their own hands because most firms do not have their interests aligned with their non-high net worth clients. The masses are deluded if they believe that their financial institution gives them the same attention that a millionaire client recieves.