NZ Herald 28 October 2006
Q&As: A reader finds a flaw in my “avoid the rear-view mirror” argument. Or does he?; Would NZ’s tax revenue actually increase if we all invested offshore?; Inland Revenue says it can’t fix everything at once.
Q&As: A reader finds a flaw in my “avoid the rear-view mirror” argument. Or does he?; Would NZ’s tax revenue actually increase if we all invested offshore?; Inland Revenue says it can’t fix everything at once.
Why some advisers don’t recommend index funds. A while back I wrote that I still think index funds are the best way for most people to invest in shares, even though they are scheduled to lose their tax advantage next year. That has prompted an intriguing question from a reader: “If index funds outperform all other forms of sharemarket investing over a long period of time (10 years?), then why do advisers recommend other forms? Is it simply due to their commission?”
Q&As: Is there an 18-year cycle for industrial and resource shares?; Why index fund of Aussie shares has done much worse than its index; Limited submissions on tax changes not good enough; NZ shares, already favoured, shouldn’t get still more favourable tax treatment.
Q&As: Why I won’t do research on an Aussie resource index fund; Too little time to study the new tax plans for international share investments.
Q&As: 2 on whether preparation and research plays a part in “luck”. Plus: Winning entries in competition to win a copy of “Get Rich Slow”.
Q&As: Is compounding interest over-rated?; Credit cards v eftpos; How long is long-term? Returns on different assets.
Q&As: Shares v term deposits — it depends how much time you have; Short-of-cash millionaires should try to renegotiate their mortgage; When is a 2% penalty not 2%?
Q&As: How well do share funds perform?; Comparison of investment performances.
Share pickers respond to my doubts. Even as I typed it, I thought a certain sentence in my last column was bound to cause trouble. “Lots of research,” I wrote, “shows that an individual investor who researches companies doesn’t tend to do any better than someone who chooses shares at random.” Sure enough, a man who describes himself as “a paid-up member of the share pickers guild” emailed me.
Complexity of financial products no accident. Confirmation, at last, of what we’ve suspected all along: Providers of financial products may deliberately make them sound complicated.