The Investor 20 June 2006

Which index fund — if any? A reader asks which index fund to invest in. These days, though, we need to ask first whether any index fund is still a good idea. Index funds invest in all the shares in a sharemarket index. For example, the TENZ fund invests in the ten biggest companies that make up the NZX 10 index.

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The Investor 6 June 2006

Bigger and better houses distort numbers. Readers keep sending in thought-provoking letters about the shares v rental property debate. It’s central to the question of how to invest long-term savings, so it’s worth continuing to explore the issues. Today, excerpts from two letters: “Your reader who commented on comparisons between housing price indexes and share market indexes has overlooked many points. Sometimes very large amounts are spent on home improvements without being considered when calculating house price increases. “With new houses, a trend for larger houses and obviously the higher cost for more square feet will also distort the figures to indicate asset value growth where there is none.

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The Investor 23 May 2006

Property backers underplay risk. Property backers seem to go in for hyperbole. Two examples from readers’ letters: “Shares are not and have never been as lucrative as property…. We now know why the richest people in the world and in NZ are property investors.”; “The average person can quietly work themselves into a residential property portfolio worth several million dollars with a decade or two of judicious acquisitions…. People putting a portion of their income aside to buy into share funds are left in the dust.”

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