Disclosure – I have investments with both Vanguard and Schwab, they are both good companies. I don’t blame Schwab for this ad, odds are good that they used an outside firm. One that should be fired.
Do you see where they went wrong? .03 is 80% less than .15. But the reverse isn’t true, .15 is five times .03, not “Nearly 80% more.”
Say, we have 2 dogs. Mine is 10 lbs, yours is 20 lbs. Mine is 50% the size of yours, but yours is not then 50% larger. He’s twice the size. This is math we expect our kids to learn in grade school, well before high school.
And for the record, Vanguard charges me .02% for the S&P fund in my 401(k) retirement account. The ticker is VIIIX, look it up.
The Globe ad was just one example of how ad writers can be clueless. Here’s another example. I scanned this from an advertisement from a company trying to sell you gold coins. Set aside the timeframe of this ad, by the end of 2016 the S&P had recovered so that 2000-2016 would have shown growth to $21,000, otherwise known as +110%.
“Others pay twice as much.” And yet, I’m saving 75% if I take this deal. The deal is better than the copy reads, but still, the math is just awful.
This is an ad I set aside some time back. It took a few seconds to see what I found so wrong with this ad. Was it that this chart had no vertical axis, showing investment return over time? No.