Rebirth 79: I opened a bank in the United States

Chapter 483 Low cost does not mean low threshold

"After coming out of Wellington, I have only one ideal in my life. To be a fund that actually considers the interests of investors, Carter, I know you are a good boy, but you can't change some things"

"You also have someone to support you. We face customers directly, and the commission can be reduced to 1, but for underwriters, at least 7 to 9."

Seeing that Bogle and Carter were talking about business, Jim and Julian made room wisely.

At this time, Carter felt a little strange, because the gap didn't sound like it was very big.The transaction commission only increases by 6 to 8 yuan for every [-] yuan.
"Although this number is not large, it is not small in an index fund! Because an index fund is different from a traditional fund, its share is a basket of stocks. For example, you are a customer now and want to subscribe for the first index investment share of the trust fund."

"We don't sell you the shares directly, but after getting your investment money, we buy the stocks of the S&P 500 constituent stocks. Assuming that each share is 1 share, then we need to buy all the constituent stocks One share, after being packaged, is converted into one fund share. Similarly, when redeeming, what we return is a package of stocks, not cash!"

"If you want to cash out, you still need to trade and sell these stocks! Therefore, when investing in index funds, the frequency of transactions will be very high! The difference in commissions will also be multiplied. For every $1 reduction in commissions, the actual savings The cost is likely to be three dollars, four dollars. This can buy an additional share of small company stocks to form a new share! The larger the investment and the larger the scale, the more obvious the difference in commission ratio will be!"

Pulling Carter to sit on a sofa in the living room, Bogle patiently explained:

"I am very grateful that you invited me at this time, when I was at my worst. But please understand that it's not that I don't want to support you. It's just that it's just rumors and appeals to allow banks to underwrite securities. And There’s no written law, so it’s not necessarily feasible.”

"Secondly, low rates and low-cost operation are the foundation of Pioneer. I set this tone at the beginning of the company's establishment. Even though the times are difficult now, this fundamental thing is difficult to change. Once changed, is it still what it is?"

"Moreover, I firmly believe that in the long run, Pioneer's thinking is correct! Our management fees and escrow rates are much lower than those of peers, and we don't need to pay commissions to brokers and underwriters, which means, With the same scale of profit, investing in our clients, the actual income will be much higher than other funds.”

"Let me tell you. I remember that you have shares in Tiger. You should know that their management fee rate starts at 2%, and this is a discount for big customers. And part of the profits will be taken away. Ross’ quantum, that’s even more exaggerated.”

"And what about us? The comprehensive fee rate is only 0.25%, and the difference is at least ten times more! It is true that index funds and First Index Investment Trust can't do their exaggerated, more than [-]% under normal circumstances. , more than [-], or even more than [-], the exaggerated income of doubling growth. But if you look at it from a long-term perspective."

"As long as you believe that the U.S. economy can grow, then it is guaranteed to make money. Assuming that the annual economic growth rate is 11%, and our rate of about 0.2%, the ten-year comprehensive income of investors will be 179%. Thirty The year is 2069%! Compared with other open-end mutual funds, they may have much higher income than us in a certain period of time, but their possibility of loss will be higher. Assuming they can also achieve long-term comprehensive return rate 11 %, then in terms of expense ratio, even if the expense ratio is only increased by 0.4%, 0.6%, the total return rate after thirty years is only 1846%. %above"

"Well, I think I understand."

Carter nodded thoughtfully.

Originally, Carter's plan was the same as the little plum who sold junk stocks on the pink sheet market in "The Wolf of Wall Street".Regardless of whether the fund is rubbish or not, as long as it has low cost and low investment threshold, it is a good fund!
As an underwriter, I am only selling goods, not holding them myself!
Intermediate management fees, distribution fees, etc., as long as someone buys it!So no matter if you lose or lose, you are making money!

But after listening to Bogle's detailed introduction, Carter found that the threshold for this fund seems to be quite high!
The first is share investment, which requires a package of stocks first.In other words, the initial investment amount is not low!Its so-called low cost is just the operating cost, not the investment threshold is even lower!
Of course, if it's just one or two such investments, it's not too high.
But such a conservative fund, Bogle's business ideas, and marketing gimmicks are low operating costs.If you join yourself as a middleman, is its cost still low?If it is not low, then why should others invest in it instead of investing in some more active funds? !
Unless, I also lowered the rate!And the commission ratio!
But if you do that, how can you guarantee your own profits?

"Thank you for your advice, Mr. Bogle! It is true that there is no point in talking too much now until the dust settles. However, I agree with you! In the long run, the American economy is Good luck! We can all have a bright future!"

After bidding farewell to John Bogle, Carter continued his courtesan behavior.

In addition to the guests he invited, such as Akio Toyoda, and some Japanese businessmen he brought, such as Mr. Griffin, a Florida building materials businessman who was brought to New York by Katla and planned to inspect the situation in New Haven, and others, Zhu Lian also brought a lot of people to Carter.Like old acquaintances, Mr. Mackenzie, etc.
As he grew older, Carter understood more and more why the group of businessmen is always particularly easy to form groups.Because the more people you know, the better your business will be
And when the scale of the business reaches a certain level, especially after everyone in your circle becomes a giant, some thoughts will change.
The future is too long, let's not show it for the time being.

As the host of this banquet, Carter was naturally the finale.

When the door of the living room was slowly closing, Carter, who was standing in the living room, looked at the magnificent banquet hall in front of him, and the people in the hall looked like dogs and were glamorous.
The sense of success that he didn't get at Douglas's Christmas banquet, but now he made up for it all!
The purpose of holding this banquet is also very simple, it is purely to meet old friends, and to enhance the sense of presence by the way.Another utilitarianism may be when it may be involved in the construction of New Haven in the future
Most of the guests at the meeting are businessmen from the north. Who knows if there will be opportunities for cooperation in the future?
Right?

This kind of small utilitarian banquet can be said to be as simple as a white lotus in Vanity Fair in New York.

In this relaxed atmosphere, a dinner party, both guests and hosts enjoy themselves
(End of this chapter)