A fee eats twice

An investment fee removes more than the line printed on a statement. The deducted money also stops earning whatever future return it might have earned. Over a long horizon, those missing returns can themselves have produced returns, so a small recurring percentage works through the same compounding machinery investors hope will help them.

The US Securities and Exchange Commission illustrates this with hypothetical portfolios, not a promise about actual markets. Returns vary, products differ and cheaper is not automatically suitable. The narrower observation is arithmetic: ongoing costs reduce the base that remains at work. A fee is therefore both a present charge and a sequence of foregone possibilities.