I try to remind myself of these fees each time I am offered a "free" steak dinner from these wealth management companies.
In my world, management fees would only be allowed on positive performance (the gains), not the initial investment amount (the principal).
For example, If I give you $10K to invest and that investment becomes $11K in a year, I am willing to pay you 1% on the gain (1% of $1K or $10), not 1% on the entire $11K.
You helped me make $1K... I brought you $10K.
Conversely, If you lost money for me that year, you get $0 fee.
Or even better, how about you pay me 1% of AUM in the years when my portfolio had negative returns. We are a team, right? If "we do better when you do better" is true, than how about "we both do worse when you suffer a loss (do worse)".
In terms of retirement Safe Withdrawal Rate (SWR) of say 4%, a typical 1% management fee equates to 25% of that SWR (1% of the 4%). That a significant reduction in retirement income.
I'll take that steak dinner to go please!

Yeah, well said!
Maybe I am just a cheapskate, but I am not paying for anything that I can do myself, that doesn't involve a septic tank.
A free steak is not worth hours of my time and enduring a sales pitch.

bee said:
In my world, management fees would only be allowed on positive performance (the gains), not the initial investment amount (the principal).

Are you referring to the asset management fee in wealth management that brokerages offer ?

Exactly...We should share in the gains we made together, not the assets I brought you. In real estate its called ROI (Return on Investment).

That reminds me of a futures trading system firm years ago that approached me through my broker about helping seeding their new strategy and then potentially recommending it The offered a typical 2-and-20 which I laughed and said if I was fronting the money, I shouldn't be paying you ANYTHING beyond transaction costs. We haggled and I got them down to .50-and-zero but by that time I was feeling like a potential chump and decided not to play in the end. Probably made the right move, since I never saw them again anywhere. :)

Since the start of 2024 there have been many penny-stock IPOs — often defined as IPOs priced below $5.
Through Sept. 30 of this year, there were 164 of them on U.S. exchanges including 147 on Nasdaq.
According to Jay Ritter, a University of Florida finance professor emeritus,
106 penny-stock IPOs were brought to market from 2001 to 2023.
"Last month’s initial public offerings included a Cayman Islands-incorporated provider
of shrimp-farm maintenance services in Malaysia with only four employees.
The IPO by Megan Holdings priced at $4 a share and raised $5 million."
"There has been a flood of similar microcap IPOs over the past two years,
a sign of the speculative fever gripping many parts of the investing world.
These stocks often lure in everyday investors before they tumble.
Some have produced eye-popping gains following announcements
related to a name change, cryptocurrencies or artificial intelligence."
"Nasdaq has promised to clean up its act and on Sept. 3 asked the Securities and Exchange Commission
for permission to tighten its listing standards, especially for small Chinese stocks.
This followed criticism by investors and lawmakers that such listings have become breeding grounds
for scams and manipulation."
https://marketsam.cmail20.com/t/d-e-gejykl-duklntldl-r/

I try to remind myself of these fees each time I am offered a "free" steak dinner from these wealth management companies.
In my world, management fees would only be allowed on positive performance (the gains), not the initial investment amount (the principal).
For example, If I give you $10K to invest and that investment becomes $11K in a year, I am willing to pay you 1% on the gain (1% of $1K or $10), not 1% on the entire $11K.
You helped me make $1K... I brought you $10K.
Conversely, If you lost money for me that year, you get $0 fee.
Or even better, how about you pay me 1% of AUM in the years when my portfolio had negative returns. We are a team, right? If "we do better when you do better" is true, than how about "we both do worse when you suffer a loss (do worse)".
In terms of retirement Safe Withdrawal Rate (SWR) of say 4%, a typical 1% management fee equates to 25% of that SWR (1% of the 4%). That a significant reduction in retirement income.
I'll take that steak dinner to go please!

Thank you for the informative Fareed’s reporting. China is no longer a manufacturer of low tech stuff. Far from it, the country’s long term objective is to becoming global competitor. This trade war plays into their hands as beef is imported from Australia (plus South America) and soybean from Brazil. The only area China is lagging is semiconductor (several years behind according the think tanks).
Technology advances at a fast pace. The anti-science protectionism policy of this administration only spells demise for US.

their continued service revenue for installed products
Well, for some of their installed products. They have a Korean subsidiary that manufactured our building's elevator. A few years ago our property manager was looking for a company to service our elevator and had a very hard time finding anyone who could do it. And I'm told that getting spare parts can take days or weeks.
OTOH, perhaps Otis can sell into China from this subsidiary.
In some sectors (don't know about machinery) manufacturing companies get higher valuations than service companies. So it might be worth checking out hardware:service ratios at similar companies (e.g. Schindler, Kone) to see how they're valued.

Not sure how many know that M* does a lot of stock analysis. I’m a subscriber. Little experience however using their metrics. FWIW they are favorably disposed toward OTIS and have a fair value of $106, substantially above its recent close.
Baron’s has highlighted the company in at least one piece over the past year and is also favorably inclined. Their August 14, 2025 article is headlined: ”Otis Worldwide Stock Is Set to Get a Lift - The elevator company is poised to benefit from increased demand, thanks to a building boom in China, South Korea and India”
I have had pretty good success with Baron’s recommendations, but much patience needed. Sometimes takes years for their assessment to play out. Easy to get frustrated.
I usually look at Zack’s. They have OTIS rated a 3 (hold). They rate it C for momentum but D for both growth and value. Compared to the industry they have it in the upper 20%. I’m often puzzled by their ratings. I think they tend to be near-term thinkers.

Appreciate your response. Totally agree with what you stated. Given our current Orange President, I’m not sure how our companies are going to do business in China. He is really forcing countries to become more detached from the U.S., which will spur the growth of Chinese businesses to replace ours in China. That is a growth concern for U.S. multinationals.

Not sure how many know that M* does a lot of stock analysis. I’m a subscriber. Little experience however using their metrics. FWIW they are favorably disposed toward OTIS and have a fair value of $106, substantially above its recent close.
Baron’s has highlighted the company in at least one piece over the past year and is also favorably inclined. Their August 14, 2025 article is headlined: ”Otis Worldwide Stock Is Set to Get a Lift - The elevator company is poised to benefit from increased demand, thanks to a building boom in China, South Korea and India”
I have had pretty good success with Baron’s recommendations, but much patience needed. Sometimes takes years for their assessment to play out. Easy to get frustrated.
I usually look at Zack’s. They have OTIS rated a 3 (hold). They rate it C for momentum but D for both growth and value. Compared to the industry they have it in the upper 20%. I’m often puzzled by their ratings. I think they tend to be near-term thinkers.

I like to use StockRover. They're calling it a HOLD, currently. Their call is for 8.65% upside to target share price. (1 year.) P/E is 24.2 and that's already too rich for my blood. A solid company that's been around forever, you're right. I like the beta, at just 0.47. Maybe wait for the expected fall in the Market generally? The EPS Predictability and Cash Flow Predictability numbers are stellar. Over the past 5 years, the company's own P/E is at a rather reduced point, though 24.2 is still higher than I'd be willing to pay. The dividend yield is 1.8% and so it's just too little for me to go for. But if dividends are not a priority for you, that just won't matter; it will feel like a bonus when it comes. Payout ratio is 41.7, so that's sustainable. ...You can always dollar-cost-average your way in, in small steps, on a regular basis. Break a leg!

Never heard of that stock analysis website. I typically use Value Line and Morningstar. Recently, I’ve been looking at OTIS, AOS, MKL, CB, and AWK. The last one currently looks the least interesting.

I like to use StockRover. They're calling it a HOLD, currently. Their call is for 8.65% upside to target share price. (1 year.) P/E is 24.2 and that's already too rich for my blood. A solid company that's been around forever, you're right. I like the beta, at just 0.47. Maybe wait for the expected fall in the Market generally? The EPS Predictability and Cash Flow Predictability numbers are stellar. Over the past 5 years, the company's own P/E is at a rather reduced point, though 24.2 is still higher than I'd be willing to pay. The dividend yield is 1.8% and so it's just too little for me to go for. But if dividends are not a priority for you, that just won't matter; it will feel like a bonus when it comes. Payout ratio is 41.7, so that's sustainable. ...You can always dollar-cost-average your way in, in small steps, on a regular basis. Break a leg!

For decades now, I don't look at one sleeve of my portfolio but the whole portfolio.
This allows me to use all categories.
I came to the conclusion to only hold leading categories/funds and look for the portfolio's total risk-adjusted performance and limited number of funds.
In retirement it's a lot more important for me to have much lower volatility. I pay less attention to performance because I have enough.
Simple example:
Instead of holding stocks + bond fund I may use QLEIX instead in the last 5 years.
Suppose I want just 30% in stocks. Instead of 30/70 VOO/BND, I select VOO/RCTIX. See 10 years (https://testfol.io/?s=18uGeuEjL0F)

@hank : Just a guess, thinking for long term holders?
P.S. I didn't read the article.

Not sure reading the article would help much with my question. I’m interested in what happens to these types of stocks if the markets enter a steep downturn? Barron’s does not address that.. There was a thread here about TROW (with a caption like ”Buy TROW instead of its funds?”) 5-6 years ago. How’d that go?
@Derf raises an interesting secondary question. When you buy a stock, how long do you intend to hold it? Buffett might say forever. Doubt many of us have that degree of patience. I only buy individual stocks when the price is already depressed. But if it turns south early on I’m likely to sell. That would have been the right thing to do with TROW 5 years ago.
(TROW stock price: - 27.4% over 5 years)
PS - Here’s an interesting discussion I ran across today.

Thanks. Great interview.
A few of his sentiments stuck with me:
"know what you own!"
"If you can't explain your investment strategy to a 10-year-old you have no business being in that investment."
"I owned plenty of investments that went to zero."
"If you surround yourself with smart people they will eventually rub off on you."
"While my friends were delivering newspapers, I made a lot more money as a golf caddy. I met a lot of influential people as a golf caddy. Later, I was hired at Fidelity by Ned Johnson who I caddied for. I guess I impressed him years earlier with the advice and guidance I gave him on the golf course."

I think of an AI like Perplexity as a better search engine without so many ads--yet. All it does is scrape the internet.
Ten years ago few would have thought of searching google for the best mutual fund to buy right now, or, what is the cure for cluster headaches?
If I ask Perplexity a question like: What is the success rate of low cost mutual funds? Or, are there any new developments in cluster headache research? I get interesting summaries and good links to follow up.
So I asked Perplexity for good mutual funds to buy during a government shutdown. Am I interested in Perplexitie's answer? Neigh, I click on the sources tab to see which sites it relied on for its answer. This link should take you there.
BTW, I am not really interested in buying a fund for the shutdown; I am curious what other people are saying.

Core bonds don't scratch my itch. For several years I've stayed with a couple of TRP junk funds. I'm not looking for them to go anywhere, just produce reinvestable monthly dividends. The pie gets bigger, about every 30 days. If the share price rises, that's OK, too. 7+ percent yield brings a smile.

Perhaps we should ask AI? Ahahah
Key figures on AI's impact:
-75% of S&P 500 gains: Since the launch of ChatGPT in November 2022, AI-related stocks drove 75% of the gains in the S&P 500, according to a September 2025 analysis by JPMorgan.
-60% of 2025 market returns: In 2025, approximately 60% of market returns were attributed to AI-related stocks.
-Dominance of the "Magnificent Seven": Much of this growth is tied to a handful of companies, including Alphabet, Amazon, Apple, Meta, Microsoft, NVIDIA, and Tesla.
-Through the first three quarters of 2025, this group added $3.1 trillion in market capitalization.
-Sector-specific outperformance: A Morningstar analysis showed that a basket of 38 AI stocks significantly outperformed the overall market in the third quarter of 2025, gaining 15.7% compared to the market's 7.7% return.
I don't know about you guys, but I am not feeling any better after reading that! If true, this bubble has been forming for 3 years already. And is highly focused on the usual suspects.

DD is per month, not daily, and why it's not accurate.
QDSIX is far from the bond category. It lost about 7-8% this year from peak to trough and in 2024.
I would rather invest in QLEIX, it lost about the same in 2025, and 2024.
In the last 3 years QLEIX made 128%...QDSIX only made 85%.
Sharpe: QLEIX=2.8...QLEIX=1.2
Both should not be compared to bonds.
Earlier market tests do not guarantee future results. Many select only funds with many years of history and miss relatively great risk/reward in the last 3-6-12 months.
That's fine; leave the small AUM for me and jump in after the best 3-5 years since inception. :-)

I don’t know. Many are making a case for the affirmative. (Here’s one.) The problem is that you can be “right” and yet early by several years. So, often skeptics end up looking like idiots six months or a year later.
I’ve been searching in vain for Vanguard’s warning to its investors about excessive valuations made in the late 90s. The most memorable line was: “… trees don’t grow to the sky.” It received a lot of attention across the investment community back then. The markets continued to soar. I did uncover Fed Chair Alan Greenspan’s famous “irrational exuberance” remark from December 1996. Market impact lasted for a day or two. For perspective on the then looming catastrophe, in less than a decade (1995-2002) the NASDAQ rose 600% and then lost 78% of its value. Thrills and chills.
Aside - Can’t help wondering how Fed Chair Alan Greenspan might have dealt with the kind of attacks on him personally and on the institution we have witnessed recently. My bet is he wouldn’t have taken it lying down.

AI for hard science may lead once we are far (years) past trough of standard hype cycle.
experts disillusioned elsewhere (e.g., toxic media,defense,finance) join Applied Minds and such companies.
as for current bubble , see nobel prize skeptic from mit, and this :
https://slate.com/podcasts/what-next-tbd/2025/09/artificial-intelligence-isnt-a-viable-business-but-investors-are-acting-like-it-is

Barron’s Funds Quarterly+ (2025/Q3–October 6, 2025)
https://www.barrons.com/topics/mutual-funds-quarterly
(Performance data quoted in this Supplement are for 2025/Q3 and YTD to 9/30/25)
Stocks of FUND ASSET MANAGERs have languished: BlackRock (BLK; yield 1.8%; fwd P/E 23.6; #1 by AUM), Invesco (IVZ; yield 3.7%; fwd P/E 10.9), T Rowe Price (TROW; yield 5.0%; fwd P/E 10.6); Franklin/BEN is mentioned; private Vanguard is also mentioned and it now has 50% of the fund industry assets (excluding money-market funds). The fund industry is changing and growing overall. The most problematic are active mutual funds/OEFs but the mutual fund category (passive and active) hasn’t been growing. Mutual funds flourished during the baby-boomers era but now they are in retirement-decumulation phase.
New growth is in ETFs/ETPs, ETF classes of funds, retirement TDFs (soon to include alternatives), interval-funds (IFs), alternatives (cryptos, private-equity/credit) (other developments have been in CITs and guaranteed-income options within 401k that involve partnerships between fund firms and insurers). These listed asset managers are also adjusting to this new environment and should do well long-term. Goldman Sachs/GS is investing $1 billion in TROW to develop Price TDFs with some GS alternatives.
QUARTERLY REVIEW. WINNER – gold-miners. High gold prices finally kicked into the bottom lines of gold-miners and they have rallied furiously. Mentioned are gold-miners GDX, GDXJ, SGGDX, OPGSX; gold-bullion GLD; silver-miners SLV (gold:silver ratio recently peaked at 105 in 04/2025 and is currently around 82).
RUNNER-Ups – China region funds and digital assets (cryptos). In a boost to cryptos, stablecoins became mainstream through GENIUS Act.
Ironically, many mainstream investors stayed away from these highflying categories. Among the traditional fund categories, the best was large-cap-growth. LC-blend SP500 easily outperformed bonds. Inflows into ETFs (passive, active) were strong. Outflows from OEFs continued. But some unusual observations: (i) strong inflows into money-market funds despite the expectations of lower rates (maybe the investors were derisking a bit), (ii) outflows from small-caps despite strong performance (investors getting out after years of frustration?), and (iii) weak inflows into foreign funds despite their strong outperformance vs US funds (weak dollar added to the performance of foreign funds). So, there was euphoria, but not extreme euphoria. (By @LewisBraham at MFO)
MFOP data for Q3 pending.
Top 5 Categories, Q3

Bottom 5 Categories, Q3

LINKs: Quarterly Digest1 Digest2
Accessible from Mutual Fund Observer (MFO).