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Jaffe: Why financial planners are worth it
Investors have long wondered if a financial planner is “worth it.” MarketWatch’s Chuck Jaffe has the answer on Markets Hub. Photo: Bloomberg.
Response: I understand the frustration of any fund investor who has been trying to find someone like Ed Owens — the superstar manager of Vanguard Health Care Fund — and only hears about him right before he retires. Read more: The greatest fund manager you’ve never heard of.
The problem with trying to identify the best manager of the next generation is that you have nothing but hunches about the contenders. It would be someone young enough to put in the next three decades running money, meaning they don’t have much experience or track record right now.
They would have to work for a firm that keeps fees down — because expenses add up when chipped off returns for a quarter-century-plus — and they would have to invest in an area that you can believe in for that long time frame.
If I had to guess, I would say the best manager would again be concentrated in health care or perhaps technology, because being in the right market sector will make a manager “great” faster than anything, and those sectors look like they will forever be in demand, even if they have periods of underperformance.
But I won’t guess at the greatest manager of the next generation. It’s a folly when many outstanding funds are ignored or misused in the search for a holy grail. ... Continue to read.
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