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www.insideHALTON.com | OAKVILLE BEAVER | Thursday, April 2 0 , 2 0 1 7 | 2 8 High investment industry fees do not result in superior returns W arren Buffett thinks investment in dustry fees are too high. This was one of his messages in the 2017 annual letter to Berkshire Hathaway share holders. Excessively high fees are not a new topic for Warren Buffett, or this column. "W hen trillions of dollars are managed by Wall Streeters charging high fees, it is usu ally the managers w ho reap outsize profits, not the clients," Buffett wrote. Taking into account the rarity of som eone outperforming the stock market, Buffet con- tinued, "The problem sim ply is that the great majority of managers w ho attempt to over perform will fail. The probability is also very high that the person soliciting your funds will not be the exception w ho does w ell." We know from logic, as w ell as academ ic evidence, the higher the investm ent fee paid the less m oney remains for the inves tor. The arithmetic is simple, high fees equal low returns. A consistent message from Buffett is to Dollars & Sense Peter Watson Guest Contributor C H EC K O UT T H E e w LOOK ( vcross from n : \ i \ i g \ i : go invest in low -cost diversifed index funds. In a previous colum n, several years ago, I discussed his estate planning strategy for m oney he will leave his wife. Upon his passing, Buffett has instructed his wife' s trustee to put 90 per cent of her in heritance into a low-fee S&P 500 Index Fund and 10 per cent into short-term government bonds. Buffett didn't say this split w ould be good for all investors, but the point made is it' s bet ter to have a low -cost investm ent option than overpay for underperformance from a tradi tional manager. My recommendation for investors is to have strong diversif cation, low cost, tax ef fective investments. It is that simple. Unfortunately, sim ple doesn't work for m any "sophisticated" investors, including pension funds and charities. Many of these strategies are still built around the obsolete notion that having a high-priced manager will som ehow miracu lously result in superior returns. N ot so. see Investors on p.29 217 c r o s s ave halton.ca () 311 station) s v A H a lto n REGION NOTICE OF ROAD CLOSURE Burnhamthorpe Road (Reg. Rd. 27) between Sixth Line and Neyagawa Blvd for Construction of Wastewater Main Town of Oakville oPEN DAILY fr o m 11AM H A R V E Y 'S Great food, Great people, Great new look N eed d ire c tio n s to y o u r fin an cial d e stin a tio n ? Marc Nutford Financial Advisor 2387Trafalgar Road Unit 82 Oakville, ON L6H 6K7 905-822-2023 www . edwa rdj ones. com M em ber - Canadian Investor P rotection Fund E dw ardjones M A K IN G SEN S E OF IN V E S TIN G on all premium ! AtmosPhere Make Your Own Wine Wines Save '*50 ' · Hours: Tuesday-Wednesday: 10:30am-6pm Thursday-Friday: 10:30am-8pm Saturday: 9am-5pm Sunday-Monday Closed Call fo r a p p o in tm e n t. As p a rt o f th e o n -g o in g c o n s tru c tio n w o rk on Sixth Line, crew s w ill be w o rk in g a t n ig h t to install n e w w a te rm a in a t th e in te rs e c tio n o f B u rn h a m th o rp e Road W est (Reg. Rd. 2 7) a n d Sixth Line. B u rn h a m th o rp e Road W es t (Reg. Rd. 27) w ill be closed to traffic to c o m p le te this w o rk . T h e w o rk is s ch e d u led to ta k e place n ig h tly b e tw e e n th e hours o f 8 p.m . to 5 p.m . startin g o n M o n d a y , M a y 1, 2 0 1 7 to W ed n esd ay, M a y 3 ,2 0 1 7 (inclusive). Access fo r local residents w ill b e m a in ta in e d a t all tim es. from $ California 69' a batch! O Contract Number: Project Manager: W S -2 7 2 8 B -1 5 Joe P ro ie tti 9 0 5 -8 2 5 -6 0 0 0 x 7 6 1 3 jo e.p ro ie tti@ h a lto n .c a Connoisseur ^Building t CONSTRUCTION > Every batch m akes 30 bottles. *F irs t tim e clie n ts only, w ith coupon. Halton a Better 1144 Speers Rd. Oakville · 905-842-7507 · www.thirty750s.com