This is no joke! If you understand nothing about mutual funds, understand this:
I am myself painfully familiar with mutual fund performance; consistent, long-term underperformance is simply an undisputed fact to me. Baked-in by design. Inescapable. What I have never done is work the numbers, the effect of Canada’s high MER’s on performance. Quoting Jack Bogle, directly from this great post:
Let me give you a little longer-term example. An individual who’s 20-years old today [is] starting to accumulate for retirement…. That person has about 45 years to go before retirement — 20 to 65 — and then, if you believe the actuarial tables, another 20 years to go before death mercifully brings his or her life to a close. So that’s 65 years of investing. If you invest $1,000 at the beginning of that time and earn 8 percent, that $1,000 will grow…to around $140,000.
Now the financial system — the mutual-fund system in this case — will take about 2.5 percentage points out of that return, so you’ll have a net return of 5.5 percent, and your $1,000 will grow to approximately $30,000 to you the investor.
Take a minute. Let that sink in. Almost 80% of your money went back to feed the Financial Industrial Complex. And please return to the link above and read the entire post at Confident Investor. You owe it to yourself. You owe it to your kids to steer them away.