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The term "silent
partners" refers to the numerous parties who silently share in the
realized and unrealized gains on an investment. Fees, expenses, taxes, and
inflation are silent partners that can set an investor back before returns
even begin. The investment costs alone of the average active fund can consume
nearly fifty-five percent of its gross wealth. By investing in index funds,
however, high costs and high taxes can be avoided. In this case, the only
uncontrollable partner is inflation.
One illustration over a fifteen-year period demonstrates that 40% of total
return is al |
