In the world of investing, there are countless strategies and techniques that individuals can use to try and maximize their returns. Some investors prefer to take a more hands on approach, constantly monitoring their portfolios and making frequent trades in an attempt to beat the market. Others, however, take a more passive approach, opting to invest in low cost index funds and simply letting their money grow over time.
For the investment purist, the goal is to maximize growth while also simplifying their strategy. One way to achieve this is by reducing fees. Fees can eat into your returns over time, so minimizing them as much as possible can have a significant impact on the long term growth of your investments.
One way to reduce fees is by investing in low cost index funds or exchange traded funds (ETFs). These funds typically have much lower expense ratios compared to actively managed funds, which means more of your money is working for you instead of going towards management fees.
Another way to reduce fees is by carefully selecting a brokerage or investment platform that offers low fees and commissions. Many online brokerages now offer commission free trading on certain investments, which can save you a significant amount of money over time.
Additionally, consider the impact of taxes on your investments. By investing in tax efficient funds or accounts, you can minimize the amount of taxes you pay on your investment gains, further maximizing your overall returns.
Ultimately, the investment purist understands that simplicity and low fees are key to long term success in the market. By focusing on these two principles, you can create a strategy that allows your investments to grow steadily over time without unnecessary costs eating into your returns. So, next time you're evaluating your investment strategy, consider how you can simplify and reduce fees to help your money work harder for you.