There is a very clever series of advertisements that asks, “What’s your number?” Of course, the number the ad refers to is the amount of money you need to retire. The add contains humorous images of investors going about their day with their “number” displayed in print over their heads.
It’s a clever ad but I would like to see one that asks the equally important question, “What are your costs?”
You see, having a long term target for your portfolio is important but controlling your costs is critical to your long term success as an investor. Most investors I talk with don’t know their costs. Most of the time it’s because costs are often kept intentionally vague.
So, if I had my way, there would be an ad that implored investors to, “Shine a light on your costs!”
The imagery would be a flashlight beam scanning the pages of an investment portfolio statement. All the while, the costs of the portfolio would be adding up on the side of the flashlight like a car odometer. That would get peoples attention!