USA TODAY Interview:
Q: Which is more important for investors: Low fees or indexing? funds.
A. …The real issue in the market place is high-cost funds. All the data suggest that this is so counter intuitive to all consumer purchases. For most consumer goods, the sense is that the more I pay the more I get something in addition. In investments, the data do not suggest that. The best predictor of future performance is cost. Funds in the lowest quartile of cost have outperformed consistently over every time period. So we start with cost, and indexing the purest expression of that.
Q: Aside from high fees, what do you think is the biggest problems investors face in saving for retirement?
A: …The other challenge is savings rates. For those employees who do have access to employer plans, the average savings rate is 9%. If you combine company contribution plus what employees are setting aside, the number needs to be in 12% to 15% range, assuming you start young and work to 65… (more)
