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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: lifeisgood who wrote (6713)	7/11/1999 8:31:00 PM
From: Demosthenes	Respond to of 15132

LIG, <<Don't want to beat a dead horse but Bob's main gripe is not the ~1% annual commissions charged to run a fund (it's the 4-6% front or back load). Further, if that is all Bob's money management program costs, it's reasonable. Bob takes offense (and so do I) at fund managers who charge exorbitant management fees and then consistently underperform the market.>> 4-6% load front or back is big. But you would only pay it once. If you buy Bob's program you pay 1% of the total acct value EVERY YEAR. How long does his average acct hang around? 10 years? I would think so, but I'm guessing. So at 10% net return for 10 years, the acct that started at 100K is now worth about 300K or so. So Bob's firm collected 1% per year for 10 years. The first and last year alone generated about 4k or 4% of the original investment. This is about equivalent to the load Bob hates, but doesn't even consider the other 8 years that 1% is collected. So what is 4K PLUS the other 8 years worth of fees? Anyone can do the math. It's a lot of money. But then loaded funds have the expense ratio witch are also part of the cost. But the BJ Group as I understand the material I received invests their clients' money in no-load mutual funds which also charge expenses. If the average growth fund charges 1.25% and you add the fee for the BJ Group of 1% you pay over 2% annually. So what? Does anyone remember the caller a few weeks ago who was being sold a managed acct from Merrill Lynch for 2.25%? I do. Bob was hostile to the idea saying the fees were extremely high. Maybe Justa is right. Maybe I should call the program and ask Bob how I've got this all wrong. And maybe I should just move on because it really doesn't affect me one way or the other. As ever, D