I do agree with part of the information Vanos has given you and the strategy he takes will work for many investors over the long term and their is nothing "wrong" with his suggestions, and please keep in mind this is not a flame to Vanos simply a different perspective.
Investing for financial solvency for the long term involves much more than simply what return can I get on an investment, fees paid, and how much is saved in one account vs. another. I have seen many successful investors not achieve their goals simply by not adequately taking care of one or more areas of their financial life by ignoring one risk and over emphasizing another risk. I.e. under estimating the risk/cost for a major health or disability claim or not diversifying and over emphasizing on "losing" money in the market or dying in a plane crash. This is were I once again encourage you to seek a competent financial adviser that can help you take your total financial situation into perspective. With that in mind, cost are important in making any decision but "low price" is typically not the most important factor, if it were we would all be driving sub-compact cars and eating mac & cheese every night. It is about "Value" received for services for the cost paid. Case in point, no one said "well at least I am only paying 50 bps (0.50%)" when the funds mentioned lost 44% of their price value from 2001 to 2002 or asking what was the premium? when delivering a life insurance death claim that helps a family maintain their standard of living or "at least I didn't pay any 12b-1 fees" when I lost all my money in Enron stock. The main reasons people do not make money in the market is simply by not staying in it for the long term, chasing returns, and not diversifying properly. Case in point follow the cash inflows & outflows into large cap funds in mid/late 1990s, bond funds in 00-02, real estate, metal, mid/small cap, international and commodities (oil/gas) 2003-2006, and the emphasize on value stocks vs. growth stocks when price multiples show that many value stocks are overbought (though value does continue to outperform growth) and look at advertising, does it appeal to greed and/or fear? Listen to a gold advertisment lately? Buy high and sell low is exactly what many investors do, even while saying buy low & sell high. I do believe that no-load, load funds, index's, EFTs and individual securities each have their place in the investment arena and when they are appropriate to an individual investor and I encourage you to learn more in finding out what is right for YOU. If you really like to work on analyzing an investment look into these terms, Alpha, Beta, Sharpe or Traynor ratio, mean, standard deviation and R-squared, and you can also apply an efficient frontier model for your funds, (I don't necessarily agree w everything in model but is a whole other subject) Whether you choose to manage your own assets or hire an adviser always keep in mind as my grandfather would tell me "never spend $5 in time & hassle to save a $1" A competent financial advisor that is truly concerned about your financial well being can be an invaluable asset to you, whether your choose full service or simply as a guide to help educate yourself in managing your own investments and financial affairs and yes you will pay them for their service because free financial/investment advice is generally worth what you paid for it. Wishing you the best.
