AS the financial year draws to a close, investors in managed funds should prepare themselves for another poor annual statement from their trustees. InTech Research says that there is strong evidence already that investors are beginning to voice their concerns, instead of being placated by general rhetoric around investment principles such as the importance of diversification and dollar cost averaging.
InTech executive director Brett Elvish said that for those who invested at the top of the market, getting back their initial investment may take some time.
“In dollar terms, $100 invested in international shares in March 1993 grew to around $380 by September 2000, but has now essentially halved to be worth $195 today,” Mr Elvish said.
He said those who invested in 2000 at the peak of the market would, (assuming 8.5 per cent returns moving forward) have to wait more than eight years to recover their initial investment of $100, even before allowing for the impact of inflation.
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