The investment costs map: where costs can occur in the investment process

Posted & filed under Blog.

Tim Harford, in his book The Under Cover Economist, makes the point that it is very difficult to out-perform the market over the long term, and concludes his argument by writing: “we should gently invest in a wide variety of shares, with no expectation of making a killing – we should diversify, keep charges low and avoid trying to be too clever”.

Good advice, although, in one respect at least, difficult to follow. We can all agree that investment costs should be low (although they should be low and optimal, as opposed to low for the sake of it) but how can we be certain they are when they are so opaque?

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