I wish I know more in this area. My money's handled by a financial planner. I know I'm probably paying too much.
You are paying too much.
If you want a very easy-to-read book on the subject, I highly recommend "How a Second Grader Beats Wall Street". It's a more layman's version of the practical implications for the casual investor on the transition from mutual funds and stocks to the ETF world, how to do it, where to go, etc...it basically gives you a blueprint plan that will get you just about everything you need. It's fun and easy to read, and in a very easy to understand way, pulls the curtains off the whole industry as it relates to the average guy trying to save for his retirement (read: you and me).
Remember: the marketing machine that is Wall Street is doing its job if it's got you convinced you can't do this on your own. Fact is, you can. I know you're a very smart guy, so that's not the issue. It's just a fear of screwing up what you think is a good thing. The problem is that you think you have a good thing, when really you don't. That's the rub of the whole industry, and indicative of the power the investment world holds, and the lack of transparency of our financial networks (despite the fact that the US is amongst the most transparent of all countries).
Give it a read, seriously. Chances are your bank sell ETF's (ishares, Vanguard, to name just two that are popular for their low management fees). The only reason they don't yell and scream about it? They make shitty margins selling you ETF's, and that's not helping their bottom line. But it will help yours. And last time I checked, banks were doing just fine. It's guys like you and me that can use all the help we can get.
Of course, the problem with the free market (I guess it's not a problem, per se, but something every human should understand) is that once something good comes around, it drives demand, which drives prices up. It also drives competition, which hopefully keeps prices down.
ETFs are nothing special - they just mimic the stock exchange so you're diversified. No rocket science. But there are lot of different ETFs that now try to sort-of-mimic different exchanges, but only parts of them, etc....and that's the grey area where management fees creep up...and doesn't that sound like an index fund (or worse...a mutual fund)? So be careful, keep it simple.
Calculate the global market cap (thanks wikipedia). Buy ETFs for each country, in percentages that mirror the market caps of various countries. Sink the appropriate percentage (given your investment age) into bond ETFs. And remember: if you have a mortgage, you're already over-leveraged in real estate, unless you have millions in investments.
The secret to being a good investor? Diversify, and don't pay more than you should for performance (and nothing and no one can beat the performance of the market, over the long term, on average, Buffett excluded).
