Return Forecasts are Lower. What about your Investment Fees?


When you receive less of something, don’t you expect to pay less?

When Stocks and Bonds Yield Nothing

That fact seems to be lost on Wall Street.  The returns from the bottom of the financial crisis in 2009 have been strong.  But now that the market has regained those losses, what about expectations going forward?  Wall Street is virtually unanimous in their opinion on this question - investors should be prepared for much lower returns on their investments going forward.  This article in the WSJ provides one perspective on gauging future returns relative to history - portfolio income.  A portfolio split 50/50 between the S&P500 and Intermediate Term Government Bonds would have produced a yield of 1.67% last year and a projected 1.85% this year.  That pales in comparison to a 4.3% average since 1925.

Those numbers are even more depressing when you factor in investment expenses.  Let’s not forget - even though what Wall Street firms are suggesting they can deliver in the way of investment returns has been reduced significantly, the investment expenses they charge their clients haven’t changed at all.  In fact, for the vast majority of investors, total investment expenses will exceed the income generated by their portfolio - and that is BEFORE we have even considered the impact of taxes and inflation.

In the new capital markets environment, the old economics do not give investors a fair shake.  It’s time to get a complete answer to investor total investment expenses and to give answers and information to investors so that they can hold their advisers accountable - GuardVest is here to do exactly that.

Comment