The True Cost of Investing in ETFs
One should never try to predict with certainty what markets will do – that’s really hard. Predicting what investors will do on the other hand, is pretty easy. Chances are they will either look at past returns first and then consider the MER/fee, or (if they regularly read the business section of the newspaper) they look for a low cost investment first, and then look up its past performance.
This is especially true of ETFs, which are supposed to be all about driving cost into the dust. ETFs can do much more than give you access to low fee investments however. They can help you manage risk, and set up asset allocations which you couldn’t otherwise implement as an individual investor. In this week’s Globe and Mail piece. I make the argument that the biggest cost of investing is the outcome of your various buying/selling decisions over the years.