He replied, “It’s called a loss leader. It gets people in the store. And while they’re here, they usually don’t just walk out with bananas. We make a profit from them when they buy other things.” Fidelity’s zero-fee index funds are much like that. They get investors in the door, people who might be tempted to add some of Fidelity’s more expensive actively managed funds to their portfolio (especially if one of those funds posts a strong, recent performance). If you want to beat the vast majority of professional investors (after fees), build a portfolio of low-cost index funds. Ensure that it
...more
