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The Feast

Silent partners are havin’ a feast on most investors, but they suck the least from savvy indexers.

H

– The Speculation Blues

ave you ever closely examined your cell phone bill?

Typically you just look at the big number at the bottom and write a check. But if you studied it line by line you would see that your bill contains several fees that aren’t going into your actual carrier’s pocket. City telecom tax, state telecom tax, a 9-1-1 service fee… They may seem like small dings here and there, but over time, they add up. These various government entities act as silent partners with your carrier, holding out their hands for their share of the transaction, eating away at your pocketbook. Just as with your cell phone bill, your investment portfolio is vulnerable to silent partners. Ideally, a silent partner would provide some sort of benefit, but in the case of your investments, these silent partners add no value. There are numerous silent partners that take a bite out of realized and unrealized gains on investments. The many sources, individuals and entities that eat away at an investor’s returns pie are depicted in the painting, The Feast. As the family members stand idly in the background looking hungry and perplexed as their wealth is voraciously consumed by many silent partners.

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