Invest in a team, not a star
Even if you’re smart or lucky enough to find that rare stock picker who can consistently beat the market over time, there’s a good chance he will be gone before the long run comes around. The average number of years that an active manager stays with a stock fund is just 5.7.
One simple solution: Stick with stellar funds run by disciplined committees, not a single manager.
The nine-member group at Dodge & Cox Stock and the four-person team at Tweedy Browne Global Value have whipped the broad markets over the past three, five, 10, and 15 years.
Put your adviser under a “BrightScope”
When selecting planners, you want to know more than just their fees and disciplinary record. You also want to know their areas of expertise, typical customer, average account balance, and pay structure.
Screen advisers in your area using all of these variables at Brightscope.com’s financial adviser directory.
Pay next to nothing for basic help
Asset-allocation advice has become a cheap commodity, so don’t overpay.
New Internet-based advisers such as Wealthfront and Betterment charge annual fees of 0.15% to 0.35% in general.
Vanguard’s new Personal Advisor Services will offer portfolio management and a financial plan for 0.30%.
