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Friday, 18 August 2006

A random walk down George Street

Had a nice, cheap evening out tonight. Vanguard Australia had arranged for Dr. Burton Malkiel to give a talk in Sydney. There was quite a good turnout, and the setting was great - in the Ballroom of the Westin Hotel in Sydney.

If you've read his famous book "A random walk down wall street" (and the Vanguard product brochures) there was nothing new in the one hour session. But the professor is a very entertaining speaker, and it gave my wife a quick overview of efficient market theory and how it suggests index funds are a good 'core' choice for your portfolio.

Afterwards I bought a new copy of the book, and had it signed by the Author. I also got to ask the Vanguard officials how come the US parent has low, low fees (around 0.25%) while the Australia version starts at 0.9% and only gets cheap (0.35%) for amounts above $100,000 that are invested in a single fund. With Dr. Malkiel predicting single digit returns are likely in the future, an extra 0.5% fee off your 9% total return will have a big impact over time. The suits from Vaguard said that the Australian Fund is smaller than the US one, but that they were "looking into" the fees. I won't be holding my breath. In the US "no load" funds can only charge a certain maximum for advertising before they can't call themselves "no load" - here there's no such rule, so I think the current Vaguard Australia customers are paying for the companies growth strategy.

All in all, a very economical and enjoyable night out.
ps.
Total costs (2 persons)
Lecture - free
Parking - $4 at Pyrmont (a healthy walk through Darling Harbour to the city)
Entrees and drinks before - free
Dinner afterwards - $17 (OK, it was actually 2x take-away)

total = $21.00!

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