Readers defend stop loss orders. My arguments in my last column — that stop loss orders are a bad idea — failed to convince two readers. What about Feltex, GDC Communications, RMG, National Mail and other shares that have dropped a long way?, they asked.
Q&As: What you should check out before you buy a house. And who should do the inspection; Some possible progress on the proposed changes to international investments tax; Who’s right and wrong in the maths on the new coins; Financial adviser explains how “Jane”, with her $1 million in term deposits, could save on fees.
Stop loss orders a dead loss. A reader writes that he is concerned about my advice in my last column. “Your two rules of share investing are to a) diversify (i.e. neutralize returns), and b) not sell when the market bombs,” he writes. “One would have hoped you would have added a third — enter a stop loss to avoid catastrophic loss if/when the market does bomb.” Not in my rulebook.
Readers’ questions on renting v home ownership. My last column — which said that you may do just as well renting as owning your home, provided you are disciplined about saving elsewhere — brought interesting questions from two readers. The first one is 40 and planning to return to New Zealand with his family. “I would be happy renting until I retire whilst growing our capital in areas other than property,” he writes. “At some time later I might buy a small place to live in. However, do you think in 25 years that ownership of property might be out of reach?”