"Without data, you’re just another person with an opinion".
William Edwards Deming, an American engineer, statistician and author, said that.
It’s one of my favourite quotes.
Because investors driven by data are more successful.
(That’s a fact too).
Now an example of data vs opinion, in investing.
Take the financial media.
The impression you generally get from them is that if you want higher investment returns, you have to pay higher fees.
But the evidence tells a different story.
Nir Kaissar, writer for Bloomberg, explains why taking a data-driven approach to digesting the news will make you a better investor.
It’s all about presenting inescapable conclusions.
The problem with fund performance is that it’s unpredictable (opinion).
Fees and charges, on the other hand, are nailed on (data).
You know those are the costs you’ll pay pretty much regardless of how your fund actually performs.
Fees become incredibly important because they’ll eat away at the returns you are going to enjoy.
They also compound over time.
Costs are one aspect of the investment process that you can control.