Sent: 03-08-2010 13:46:06
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Shares better than balanced funds?
You might have seen some interesting media reports during the past week about comparing the returns of super funds with directly holding Aussie listed equities. Refer here: http://www.atcbiz.com.au/r.php?r=an5n54s
What is particularly interesting is the impact of the performance of overseas equities and associated currency fluctuations.
Perhaps these reports might encourage some people to invest locally - at least they can more closely monitor their investment and uncontrollable variables don't get in the way. (Unless they invest in countries involved in importing or exporting anything!)
These reports tend to overstate the real issues. After all we're talking average situations not specifics. But it is after fees AND tax!
The variability of returns and portfolios is never easy to generalise about simply because there is so much variance in what and how someone has invested.
In fairness the media has to break issues down to bite size chunks so those remotely involved in a subject can get some understanding about what is going on. This means sometimes the issues is dumbed down. Some people will find this unfair, unreasonable and maybe unprofessional.
The media is not going the change. Why should it? The story above has been accurately written
Last week in The Australian I wrote about using total return managed funds and the problems this style of investment has caused for pensions over the last 20 years. You can read that article here: http://www.atcbiz.com.au/r.php?r=ky1e4pe
One reader of my column wrote to me and asked, "What exactly are the alternatives to total-return managed funds all the options in my fund's allocated pensions seem to be this type?"
It's a very good question. I only wish we all had an answer!
Overall I tend to think that these stories reinforce the problems that some financial planners have when they sell their genius stock or fund manager picking knowledge.
Expertise is financial markets is often an easy line to sell but clearly it has a limited shelf life.
Finally please consider purchasing a copy of my book. You can look at the contents page at the following link: http://www.atcbiz.com.au/r.php?r=0mjd6ne
The second edition has just been released.
Two options are available - once only subscription - $55 inc GST - or an annual subscription will gives you access to all the updates made throughout the year ($120 inc GST). The book can be purchased at the following link: http://www.atcbiz.com.au/r.php?r=5a4agqb
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