Costs
The percentage that eats a third of your outcome
Charges compound against you exactly as returns compound for you, and unlike returns they are certain.
Ndidi Eze
Costs writer, The Investment Habit
Ndidi writes about charges and spreads, and can tell you what a percentage costs over thirty years.
Contact Ndidi through our contact page — mark your message for their attention and it will be passed on.
14 articles
Funds & Trackers
Backtests describe a past that was chosen after the fact
Any strategy can be made to look excellent in history if the rules are selected once the history is known.
Funds & Trackers
Familiarity feels like information
Investors consistently favour what they recognise, and recognition carries no information about future returns.
Costs
Why a phone contract gets more scrutiny than a platform fee
People will spend an evening saving a small monthly amount on a subscription and years paying a larger one on an account they never…
Costs
Paying for reassurance is a purchase, so price it
A great deal of what investors buy is comfort. That is legitimate, provided you know what the comfort costs per year.
Costs
Trading is the price of your own restlessness
Every adjustment costs something, and the reason for most adjustments is the need to do something rather than the need to change…
Costs
Zero commission changed behaviour, not cost
Removing the visible price of a trade did not make trading free. It removed the friction that used to stop you.
Costs
Certain costs and uncertain returns get unequal attention
Investors spend their energy on the part of the equation nobody can control and ignore the part with a knowable answer.
Costs
The part of an adviser fee that is behavioural
The most defensible thing a good adviser does is stop clients acting on their worst instincts. Measuring that is genuinely hard.
Funds & Trackers
The gap between a tracker and the index it tracks
Two funds following the same index will not deliver the same result. The gap has identifiable causes and most of them are visible…
Funds & Trackers
Accumulation and income units own exactly the same portfolio
Two share classes of one fund hold identical assets and differ only in what happens to the dividends. The choice still has…
Funds & Trackers
The currency a fund is priced in is not the currency of its risk
A fund quoted in your own currency can still rise and fall with exchange rates. Hedging changes that, at a cost, and only partly.
Costs
You pay the spread going in and again coming out
The difference between the buying and the selling price is a cost taken at the moment you trade. Nothing on the statement calls it…
Costs
Performance fees, high-water marks and what they pay for
A charge tied to results sounds like alignment. The details of how it is calculated decide whether it actually is.