AKA “surprisingly, oligopolies are there to make money and care about their customers just enough not to pee on their faces while someone else is looking”.
I’m lucky to have a lot of savings. I regularly get calls and emails from Scotiabank telling me to buy mutual funds and increase my credit limit. I always figured that if someone contacts you saying they have an offer that will make you a lot of money, they’re lying. CBC seems to confirm that.
If you have a notable amount in savings, investing it in some way is generally a good idea, but I agree with not trusting your bank to steer you right.
All-equity mutual funds net fees will, on average, return more than 5¼%. (Should be about 7-8% on average). That said, that comes with a lot of volatility (value fluctuations) and you can expect sometime in the next 50 years to have a year that’s down as much as 50%, but over the same 50 years it will outperform any GIC.
They’re still a terrible product, though. An ETF will do the same, but be worth about 3-4× as much after 50 years due to mutual fund fees eating most of the compound gains.
Anyway, the ethics of mutual funds are why I quit the finance industry before even really getting started in it. I did financial analytics as a co-op student for one of the major banks in the mutual funds group and had the skills and connections to make a career in finance, but I couldn’t stomach making a career working on financial products that are predatory.
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I’m lucky to have a lot of savings. I regularly get calls and emails from Scotiabank telling me to buy mutual funds and increase my credit limit. I always figured that if someone contacts you saying they have an offer that will make you a lot of money, they’re lying. CBC seems to confirm that.
If you have a notable amount in savings, investing it in some way is generally a good idea, but I agree with not trusting your bank to steer you right.
I do. It’s in GICs at 5.25% interest. The bank wants me to switch it to mutual funds with a 2% management fee.
All-equity mutual funds net fees will, on average, return more than 5¼%. (Should be about 7-8% on average). That said, that comes with a lot of volatility (value fluctuations) and you can expect sometime in the next 50 years to have a year that’s down as much as 50%, but over the same 50 years it will outperform any GIC.
They’re still a terrible product, though. An ETF will do the same, but be worth about 3-4× as much after 50 years due to mutual fund fees eating most of the compound gains.
Anyway, the ethics of mutual funds are why I quit the finance industry before even really getting started in it. I did financial analytics as a co-op student for one of the major banks in the mutual funds group and had the skills and connections to make a career in finance, but I couldn’t stomach making a career working on financial products that are predatory.