Let’s take one last peek at the Monte Carlo simulation. We won’t penalize the active portfolio for taxes, as we will give it the benefit of the doubt that no one would be silly enough to do active investing in a taxable account. Let’s just say that the active investor acts with human nature and pays the 1.5 percent penalty. So, now the average dollar invested has a 3.5 percent drag comprised of 2.0 percent expenses and 1.5 percent penalty for chasing performance. Running this in the Monte Carlo simulation against Kevin’s 0.23 percent fees, while he watches SpongeBob, creates the odds listed in
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