The True Cost Of Investing In Too Many ETFs

Описание: Is it possible to invest in too many funds? The simple answer is yes. The longer you invest the easier it is to slowly acquire more and more investment funds. This includes index funds, thematic funds, sector funds, and other actively managed funds that charge very high fees. This is a problem I've seen come up quite a bit that needs to be addressed.

The problem with actively managed funds:    • The Truth About Outperforming Index Funds  

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Why People Overcomplicate Investing- The reason anyone holds more than a few investment funds is because of stories and narratives. Two of the most powerful factors in the decisions you make. As you hear about different funds on Youtube and in the media you might start adding a few funds here and a few investment funds there. Eventually, you have a portfolio full of random funds that don't make sense together.

Effort Does Not Always Equal Value- A more complex portfolio does not always mean you're going to end up with better returns compared to a simple 2 fund portfolio or 3 fund portfolio. Even if you do get a higher return you'll need to calculate if it was worth your time. In this part of the video, I'll break down the hours spent on a complex portfolio vs. a simplified investment portfolio.

Financial Professionals and complex investment portfolios- You'll usually see financial professionals put investors into 15+ actively managed funds. The reason for this is that they're incentivized to keep things complicated so you stay with them as a client. If all they did is put you in a simplified portfolio you might question why you're paying them such a high fee. Complexity is job security for these people. On top of that, they'll sometimes get kick backs from some of these actively manged funds which means they're more likely to have you invest there.

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Disclaimer: This video is for entertainment purposes only. Everyone's situation is different so do your own research before making any decisions with your money. If you need help then contact a Certified Financial Fiduciary before trying anything that is mentioned in this video. I prefer a Fiduciary financial advisor that charges an hourly fee as opposed to an ongoing fee based on a % of your portfolio. Always remember that incentives determine the type of advice they give you so one that charges an hourly fee is less likely to be problematic.