Triple Crown and the Stock Market

The "Super Bowl Indicator" is widely known, as the winner of the Super Bowl has been correlated to overall stock market performance. While this does not imply causation, is does make for an interesting discussion of market efficiency. A similar item is the performance of the stock market in years when a horse wins the Triple Crown--the results are not good. So, many people may be watching how California Chrome does in the upcoming Belmont Stakes. See article here, WSJ.

Fees Matter

A 1% annual fee doesn't sound like much, but when compounded, fees paid to advisors and managers can have a significant impact on an investor's ending portfolio value. For example, consider two investors who each invest $200,000 and earn 8%/year (before fees) for 30 years. The first investor uses an ETF that charges 0.04%/year in fees, while the second investor uses a mutual fund charging 1.25%/year. The first investor ends with roughly $2 million, while the second nets about $1.4 million. The difference is purely driven by fees -- this is a huge cost. (See article here, Wall Street Journal.)