Re: Investing Myths: Alpha and Beta
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Myth #2 – You can’t predict which managers will outperform.
They insist you buy your equity exposure via a relatively passive index, pay Vanguard’s moderately expensive indexing fees [when compared to BGI or SSgA] to purchase a market-weighted index, and guarantee that you underperform the SPX or Wilshire 5000. You guarantee yourself sub-market returns in perpetuity, but at least you’ll get a relative return that is close to ‘the market.’
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First of all, Vanguard ETFs are the cheapest ... asset class they cover AFAIK.
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You can get Beta exposure cheaper than ETFs, not however for $2500. [BTW, the info on the VG site about their competition's fees are overstated by 25% or more in the few examples I examined. Caveat Emptor.
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