That ignores the opportunity cost of lost growth. Every year of Isaac’s fee savings is invested. If Isaac earned 7.00% annualized for 30 years and Henry earned 6.75%, that 0.25% difference amounts to over half a million dollars! Compound interest: the 8th wonder of the world!
Typically, a prolonged run of gains breeds exuberance. Instead, memories of 2000 and 2008 are short-circuiting excitement. More than in bull markets past, clients ask about rich valuations and whether we are overdue for a downturn.
As Brexit demonstrated, knee-jerk reactions can be imprudent. Advising clients through myriad momentous events over the last 27 years tells us that it is generally necessary to take a deep breath and let the implications unfold.
Today, a few clicks lets you buy stocks anywhere. With the world's stocks on every menu, investors' have collectively allocated capital according to the cartogram. Yet individually, investors greatly prefer domestic portfolios.