Andrew Hallam Speaks In Vienna, Austria

beaver-brewing

This Monday, October 3rd at 5pm, I’ll be speaking about saving and investing at the Beaver Brewing Company pub. 

It’s the venue of choice for teachers at the American International School of Vienna. 

The talk is free and open to the public.
 
The American International School of Vienna provides a matching incentive for teachers who invest with a tax-advantaged Raymond James platform. 

The teachers are given choices to select from a series of different mutual funds. 

But what should they pick?

Most investors underperform their funds—even when they have help from a financial advisor. 

Let me explain with an example.  

The American Funds Company offers a fund called The Growth Fund of America (AGTHX).  Over the past ten years (ending September 30, 2016) it gained a compound annual return of 7.44 percent per year after all fees.

But according to Morningstar, the average investor in this same fund, over the past 10 years, averaged just 5.45 percent per year. 

That might not sound like much of a difference.  But it’s huge. 

If someone invested $10,000 and earned 5.45 percent per year, the money would grow to $49,135 over 30 years. 

If the same money averaged a return of 7.44 percent per year, it would have grown to $86,095. 

 

The Growth Fund Of America
Fund Returns versus Investor Returns

agthxSource:  Morningstar.com

Investors can’t buy this fund without a financial advisor. It’s broker-sold only.

So where are the advisors going wrong? 

Check out the 15-year return for the fund.  It was 8.34 percent per year. 

But the typical investor gained just 7.11 percent in this fund, over the same time period.  Shouldn’t the client earn the same return that’s posted by the fund?

Here’s why that doesn’t happen.

The typical advisor moves their client’s money around.

They dump underperforming funds on lows. They buy higher performing funds on highs. 

Then the fortunes of the funds reverse. 

That’s how investors get burned.

On Monday, I’ll be showing investors the importance of low fees and sticking to a game plan. 

I’ll show how investors can capture the full returns of their funds instead of performing poorly, as a result of fear and speculation.

If you’re in Vienna, I hope to see you at the Beaver Brewing Company on Monday 3rd October 2016 at 5pm.

For further reading:  DIY investors in index funds behave more rationally than investors in actively managed funds.





Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

You may also like...

1 Response

  1. jamie says:

    Hi Andrew,

    I would love to know if you ever plan on being in the GTA (Toronto). If so, have you ever done a high school conference? Where students get a chance to speak with you? Even my teaching colleagues could use your words of wisdom.

    Regards,

    Jamie Montpellier
    Teacher

Leave a Reply

85 + = 93