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Mint
15-05-2025
- Business
- Mint
Investing pros will miss Warren Buffett. They share what he means to them.
Warren Buffett recently announced that he would step away from his role as CEO at Berkshire Hathaway. His investment returns—5,502,284% over 60 years—are legendary. But he has been a fascinating figure in part because of his transparency and how simple he made it all seem: An educator at heart, Buffett spent decades telling investors to buy high-quality companies at fair prices and hold them for the long term. Unlike most of us, he actually followed through. For this week's Barron's Advisor Big Q, we asked some leaders in the wealth management field to weigh in on the legacy of the Warren Buffett. Callie Cox, chief market strategist, Ritholtz Wealth Management: When I was 8 or 9 years old, I read the newspaper every single morning like clockwork. I would get the newspaper off the porch, pop it in front of me at the kitchen table, and read all the local stories, make my way to the real estate section, and then get to the market section. I remember looking at that page and seeing Berkshire Hathaway's stock, which was $50,000 or so at the time. I asked my dad, 'Why is that one so expensive?" And he said, 'Oh, that's Warren Buffett's company. He does really well for himself." That $50,000 number is one of my earliest memories of learning what Wall Street is like. And it's funny, when I think about Warren Buffett and the legacy he's left, I think he's the antithesis of Wall Street and its well-dressed, Rolex-wearing hedge fund managers who employ impossible strategies to outsmart markets. Warren Buffett is an unassuming investor who just bought and held companies for a very long time, and he was very good at what he did. He's one of the most relatable investors to the everyday investor in that he made money by buying and holding. People focus on the stock-picking aspect of Buffett's success. And he was a great stockpicker; he always had his nose in a 10-K. But people overlook the time aspect. And that's the most applicable part of his investing philosophy to people who don't have the time or the ability to look through 10-Ks 24 hours a day, or to make big strategic investments in companies and then have a say in how those companies operate. We can't do that, but we can buy stocks, and we can hold them for a very long time. Mike Mussio, president, FBB Capital Partners: I think both he and [longtime partner] Charlie Munger just had a unique knack for demystifying investing, cutting through the jargon and the BS and the poker game that is Wall Street and giving investors sage, stable, grounded wisdom. And the timing of their stewardship of Berkshire coincided with an era where household ownership of equities grew dramatically. If you read the letters, if you went to the meetings, if you listened to what he had to say, a lot of it was history lessons on investing. Don't be afraid to not follow the crowd. Don't put all your eggs in one basket. It was the folksy Omaha aspect of Warren and Charlie against Wall Street. And Buffett could be a calming voice. I'll never forget the op-ed he wrote during some of the darkest days of 2008. The headline was, 'Buy American. I Am." He understood that betting on America in the market is not a zero-sum proposition. Because Warren Buffett's wealth is $100 billion some-odd dollars doesn't mean that wealth came at somebody else's expense. He saw the pie growing as being good for everyone, and he saw the opportunity to participate in that by being a shareholder. Jason Hester, managing partner, Balefire: Warren Buffett reshaped estate planning, not through tax strategies, but by challenging families to wrestle with a simple question: How much is enough? His statement about not giving everything to his kids sparked a cultural shift in how we talk about wealth and purpose. When he famously said that he would leave his children enough so that they could do anything, but not so much that they could do nothing, we felt it liberated families from the silent guilt of not giving away. His public stance gave permission to rethink legacy, and he shifted the focus from wealth transfer to purpose transfer. At our firm, the question of how much is enough is a compass point. We help families to find financial independence for themselves, establish healthy boundaries for their children, and craft giving strategies that reflect not just their balance sheet but their values. We now begin with the questions, how much is enough, and what is our purpose? Helping clients define those two things reshapes financial independence. It opens the doors for generational flourishing, and it helps us shape plans that reflect families' values and vision. Buffett opened the door for a deeper, values-based conversation. On a personal note, in the early 2000s, I attended an event where they auctioned off a lunch with Warren Buffett. The winning bid was over $200,000. At the time, that amount felt absurd to me. I remember thinking, who would pay that much for a conversation? But then I realized this wasn't about lunch. It was about access to someone whose thinking shaped industries and transformed legacy planning. For the first time in my life, I realized I wanted to be someone who carried that kind of weight. It marked the moment where I began my own journey of wanting to become a trusted voice in wealth stewardship. Donald Calcagni, chief investment officer, Mercer Advisors: I think he has a legacy at two levels. The first has to do with the outperformance of Berkshire Hathaway over the span of his exceptionally long career. One of the things academics have noticed is that Warren seemed to constantly do better than traditional academic asset-pricing models would predict. That incentivized a lot of financial economists to look more closely at things like earnings and quality earnings and profitability. He incentivized them to push the bounds of financial science. From a broader retail perspective, in a world where investing has become gamified and even cheapened in many ways, Warren Buffett was that grandfatherly figure reminding us that investing isn't a game, that it doesn't have to be overly complex, that you could do very well by building a long-term, diversified portfolio by investing in, for example, the S&P 500 index. He advocated being a buy-and-hold investor in a world that aggressively encourages short-term trading and short-termism in general when it comes to investing. For me he will always be that North Star that we look to and ask ourselves, 'What would Warren do?"
Yahoo
13-05-2025
- Business
- Yahoo
Is your money market fund too expensive? Why high fees may (or may not) be worth it.
If you're parking cash in a money market fund while waiting for recent market volatility to subside, you might be paying dearly for that safe spot. Many money market funds still carry high expense ratios, which are management fees expressed in a percentage. The average money market fund fee is 0.38%, which is sharply higher than the 0.05% average fee on an index equity mutual fund, according to the Investment Company Institute (ICI). That means, on average, you'll pay $38 annually for every $10,000 you have invested in a money market fund compared to $5 for the index equity mutual fund. Investors should be aware of this, so they don't fall into the trap of overpaying to hold cash. A money market fund is a type of mutual fund that invests in short-term, high-quality debt securities such as T-bills and certificates of deposit. Money market funds aim for high liquidity and stability. Look beyond your broker. 'Brokerage firms often limit investors to selecting from a menu of money market funds managed by the brokerage firm,' said Michael Brenner of FBB Capital Partners. 'If your broker offers you access to third-party money market funds, those may come with lower fees.' Try an exchange-traded-fund (ETF). 'Consider using a low-cost ETF which has underlying investments that are very similar to your money market fund,' Brenner said. 'Those ETFs may carry much lower fees than a similar money market fund. Bond Index ETFs have fees that average around 0.10%.' While looking for a cheaper money market fund isn't a bad idea, some money managers say people should only be using money market funds short-term, anyway, unless they're elderly and worried about loss. 'The big rip off is if you're using them for anything more than short-term because you're not growing your money,' said Ronnie Gilliken, president and chief executive of Capital Choice of the Carolinas. Money market fund rates aren't typically enough to fulfill the "Rule of 72" over a short timeframe, he said. The Rule of 72 is used to estimate how long it will take to double your money. Divide 72 by the interest rate (as a percentage) to get an approximate number of years it will take to double your money. The average yield for money market funds is currently around 4.14% based on data from the ICI Fact Book for 2025. But while money market fees should be noted, investors should resist the urge to solely use fees to decide whether to invest in something or not, Gilliken said. Instead, people should focus on net returns, he said. Otherwise, people could end up eliminating outperforming funds from the outset. Take for example, a $10,000 investment in 1976, when Vanguard launched its first low-cost Vanguard 500 Index Fund. The Fund had an expense ratio of 0.14% when it was launched and has dropped now to 0.04%. That investment would have netted you $1,704,343 if you'd maintained it through 2023. Compare that to the $2,455,295 you would have earned had the money been invested in the five U.S. equity-focused American Funds available at the time, American Funds said. Since that's a net return, it includes the deduction of the maximum sales charge of 5.75% for equity funds, according to American Funds. The difference is that before buying stock of a company, analysts from the mutual fund company will visit the company, meet the chief executive and the board, get the company's financials, tour a factory or production areas, do data analysis versus the competition and if it's in a foreign country, assess political risk and legislation, Gilliken said. 'That's all included in the expense ratio,' he said. 'An index is just a thermometer of what is going on' but doesn't look at each individual company. 'Just because the company's big and in the index doesn't necessarily mean you should own it.' Sometimes, some experts say, a slightly higher expense ratio can be worth it. Energy company Enron was in the S&P 500 but went bankrupt in the early 2000s after widespread accounting fraud, misrepresenting its financial performance and hiding billions of dollars in debt, was discovered, he noted. Research, including from the famed Wharton business school, has shown 'active' investment managers often aren't able to pick enough winners to justify their high fees. However, if you can find one who can, sometimes, 'we deserve our compensation,' Gilliken said. Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@ and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday. This article originally appeared on USA TODAY: When higher mutual fund fees may or may not be worth it Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
USA Today
13-05-2025
- Business
- USA Today
Is your money market fund too expensive? Why high fees may (or may not) be worth it.
Is your money market fund too expensive? Why high fees may (or may not) be worth it. Show Caption Hide Caption What is a stock and how does it work? Buying stock can be a smart way to invest and, hopefully, make more money over time. If you're parking cash in a money market fund while waiting for recent market volatility to subside, you might be paying dearly for that safe spot. Many money market funds still carry high expense ratios, which are management fees expressed in a percentage. The average money market fund fee is 0.38%, which is sharply higher than the 0.05% average fee on an index equity mutual fund, according to the Investment Company Institute (ICI). That means, on average, you'll pay $38 annually for every $10,000 you have invested in a money market fund compared to $5 for the index equity mutual fund. Investors should be aware of this, so they don't fall into the trap of overpaying to hold cash. What is a money market fund? A money market fund is a type of mutual fund that invests in short-term, high-quality debt securities such as T-bills and certificates of deposit. Money market funds aim for high liquidity and stability. How can investors find lower fees? Look beyond your broker. 'Brokerage firms often limit investors to selecting from a menu of money market funds managed by the brokerage firm,' said Michael Brenner of FBB Capital Partners. 'If your broker offers you access to third-party money market funds, those may come with lower fees.' Try an exchange-traded-fund (ETF). 'Consider using a low-cost ETF which has underlying investments that are very similar to your money market fund,' Brenner said. 'Those ETFs may carry much lower fees than a similar money market fund. Bond Index ETFs have fees that average around 0.10%.' Are lower money market fund fees the answer? While looking for a cheaper money market fund isn't a bad idea, some money managers say people should only be using money market funds short-term, anyway, unless they're elderly and worried about loss. 'The big rip off is if you're using them for anything more than short-term because you're not growing your money,' said Ronnie Gilliken, president and chief executive of Capital Choice of the Carolinas. Money market fund rates aren't typically enough to fulfill the "Rule of 72" over a short timeframe, he said. The Rule of 72 is used to estimate how long it will take to double your money. Divide 72 by the interest rate (as a percentage) to get an approximate number of years it will take to double your money. The average yield for money market funds is currently around 4.14% based on data from the ICI Fact Book for 2025. What about fees in general? But while money market fees should be noted, investors should resist the urge to solely use fees to decide whether to invest in something or not, Gilliken said. Instead, people should focus on net returns, he said. Otherwise, people could end up eliminating outperforming funds from the outset. Take for example, a $10,000 investment in 1976, when Vanguard launched its first low-cost Vanguard 500 Index Fund. The Fund had an expense ratio of 0.14% when it was launched and has dropped now to 0.04%. That investment would have netted you $1,704,343 if you'd maintained it through 2023. Compare that to the $2,455,295 you would have earned had the money been invested in the five U.S. equity-focused American Funds available at the time, American Funds said. Since that's a net return, it includes the deduction of the maximum sales charge of 5.75% for equity funds, according to American Funds. The difference is that before buying stock of a company, analysts from the mutual fund company will visit the company, meet the chief executive and the board, get the company's financials, tour a factory or production areas, do data analysis versus the competition and if it's in a foreign country, assess political risk and legislation, Gilliken said. 'That's all included in the expense ratio,' he said. 'An index is just a thermometer of what is going on' but doesn't look at each individual company. 'Just because the company's big and in the index doesn't necessarily mean you should own it.' Sometimes, some experts say, a slightly higher expense ratio can be worth it. Energy company Enron was in the S&P 500 but went bankrupt in the early 2000s after widespread accounting fraud, misrepresenting its financial performance and hiding billions of dollars in debt, was discovered, he noted. Research, including from the famed Wharton business school, has shown 'active' investment managers often aren't able to pick enough winners to justify their high fees. However, if you can find one who can, sometimes, 'we deserve our compensation,' Gilliken said. Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@ and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.
