Fees erode performance

Performance is what’s left after investment fees have been deducted.

A 1% reduction in investment fees is a definite 1% increase in return - irrespective of what the market does.

If investment fees are 2% then investment returns will need to be more than 2% to get any sort of return. The higher the fee the higher the return that’s needed to keep your investment going up.

And when the market goes down, which it inevitably will, fees will still be taken. They will eat in to what’s left Returns will need to be even higher in the future to counter the impact of those fees.

This BehaviorGap sketch illustrates this point perfectly

I’ll just leave it here for you for a moment

Fees erode performance