Many investors are still unknowingly engaged in a vain pursuit to beat the market over the long run by selecting individual securities and engaging in market timing, or more commonly, hiring a mutual fund manager to engage in these same deleterious behaviors.
Investors in the know, on the contrary, have realized that these behaviors are far more likely to result in underperforming the market. The sophisticated solution is also the simple solution—guarantee yourself market returns by investing in low-cost index funds.
Another guaranteed way to boost your investment returns is to lower your investing-related fees. These include advisory fees, commissions, spreads, expense ratios, and wrap fees.
One of the largest expenses for many investors is the taxes due on interest, dividends, and capital gains generated by investments. By investing in a tax-efficient manner, this expense can also usually be reduced significantly.
Another way to boost investment returns without taking on any additional risk is to diversify into other high-returning asset classes. For example, instead of simply investing in US stocks, an investor could add an investment in international stocks and one in real estate to his portfolio.