My regular roundup of the week’s best money blogs and financial articles.
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One post that’s had a lot of comments this week is The Pros and Cons of Being Wealthy [2]. The upshot is we’d happily take our chances! I also wrote about house price and food inflation [3], and about companies paying dividends early [3] to beat the new higher rate taxes.
My blog post of the week is from My Money Blog. Jonathan looks at how a reader’s holdings have been analysed by Fidelity’s portfolio review service [4], and finds that they’re basically being stuffed with a higher cost, lower return alternative to index funds:
Over the past 5 years, the Fidelity Portfolio Advisory Service managed to construct a portfolio that lagged a simple index fund portfolio by 1.70% annually. That’s a huge difference over time. Use any compound interest calculator and stick in two numbers that differ by 1.7%, and you’ll see the effect of compound interest working against you for a few decades.
Why did this account perform so poorly relative to its benchmark? Isn’t it supposed to beat the benchmark?
The moral: Never give anyone else control of your money. Most financial advisers [5] are after your cash. They’re not half as interested as you in growing it.
More highlights from the personal finance blogs
- Gold, oil, stocks, and bonds overvalued? – The Digerati Life [6]
- How tax money funds profits at Goldman Sachs (told you!) – DINKS Finance [7]
- Barclays’ scandalously low profits – Stumbling and Mumbling [8]
- Conventional wisdom leaves much to luck – Financial Samurai [9]
- A value-based asset allocation strategy – UK Value Investor [10]
- Are index funds really passive? – Oblivious Investor [11] (by MoneyNing [12])
- There’s no such thing as passive income, anyway – Fiscal Fizzle [13]
- …oh yes there is! – Planting Dollars [14]
- Dividend investing after the slump – Engineer your Finances [15]
- Easy ways to improve your memory – MBA Briefs [16]
- And easy ways to combat overconfidence – Consumerism Commentary [17]
- Google Shopper: Price comparison tool for Android – MoneyWatch [18]
Interesting financial newspaper articles
- Buy-to-let returns 187% in the decade – FT [19]
- …while cash savers who switched saw 70% returns – FT [20]
- Obscure way to buy China cheap (but risky!) – FT [21]
- The (supposed) sovereign debt domino effect – The Economist [22]
- Tories planning big income tax shake-up – The Telegraph [23]
- Investment reads: A new UK aggregation site – Investment Reads [24]
- Debate: Is investing gambling? – The Motley Fool [25]
- Dueling economists and their letters to The Times – BBC [26]
- Stamp duty rise hits mortgage borrowing – BBC [27] (Via Andrew)
- Sex at work: Weapon or repression? – BBC [28]
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