Ever been had….

30th July 2010. Annual returns on managed super funds for the last 10 years have just come in at a little over 4%, or a tad over inflation. If you had just put your super in commonwealth bonds you would have been a couple of percent better off. Financial advisors and fund managers of course are faring OK

‘the only difference is between those who know they don’t know and those who don’t know they don’t know’

2 thoughts on “Ever been had….

  1. Mike says:

    My daughter who works part time in a coffee shop has a superannuation account with $1200 value. The annual management fees for this account was $400. That’s a 25% loss.

    The problem with superannuation is it’s a license to print money for the fund managers.

    Since everyone’s forced to invest in this one type of investment if it goes wrong as we saw in the GFC everyone loses at the same time. The fund managers don’t really manage the funds but simply follow the same formulas in deciding where to invest and so the possibility of a catastrophic failure is higher.

    The advantage of a more diverse system of savings is that in the event one sector fails the government would be more likely in a position to assist those who are in trouble but if everyone is in trouble at the same time there is not hope of receiving help. I’ve had this opinion for a very long time.

    The nation shouldn’t put all it’s eggs in one basket.

    The Christmas before the GFC I remember sitting at the table and saying the it’s impossible to loose 3 trillion dollars for nothing big to happen. In hindsight with more knowledge I know now that in such a situation the smart investors would move their money into cash and bonds. This was the situation in the 1890 and 1930 depressions. But I’m not an expert. That kind of knowledge is why we pay our fund managers. It seems they have failed us.

    It’s probably not that they don’t know but they haven’t asked the right questions.

    BTW. Since the Australian dollar is so high at the moment it’s probably time to pick a respectable foreign currency and invest in that. Buck the trend.

    Thanks for the chance to have a rave.

  2. Admin says:

    Mike I guess it comes back to the fact that anyone who purports to be able to tell the future is fooling himself and everyone else

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