Just a quick note...

If your going to invest in shares rather than managed fund then learn how to use options as hedging.

Using a margin loan and writing "naked" puts/covered calls over the right stocks you can return in excess of 100% p.a.

The puts aren't really naked as you would have the bought the shares anyway, your just buying them at a lower price then you would have orignially paid for.

Its a far less risky way to trade. The gains without a margin loan are usually in the 20-30% p.a.

Good Luck.

Another example
BHP dropped from $24.00 down to approx $8.90 at one stage.
One would of sold them when it dropped minus 12% = $21.12
Then buy them back once they went from $8.90x1.055(5.5%)= to $9.39
They havent looked back since.

I assume you are talking about recently (about 4-5 years ago). If so, that isn't a good example since since most of that wasn't a 'drop' but simply BHP issuing more shares. The real drop was from around $24 to $22 then around $11 to $9 or whatever it was.

In many cases it is better to skip the mutual fund and just invest in an index. Most if not most mutual funds don't outperform the market and you have to pay fees on top of that.

Any form of investment is work. Hell, I pay for my picks but I still spend 2 hours a day on sports.

In a item I read in the Financial review, the index out performed 70% of fund managers.
Now that`s a worry ...

It raises the question what the hell are those guys doing in between their BMWs , Expence accounts , suits, functions & long lunches.

All fluff & no substance.
Its got me beat how 70% can be still licenced.
Maybe they should give reason each year why their licence should be
re-instated.

Maybe they should call it a...
Playing Games with other peoples money with very little due dilligance but charge fees anyway Licence.

__________________
Cheers.

Bhagwan,

They are still doing it because the uneducated people keep giving money to them because they listen to financial advisors who are biased ( due to commissions).

Good Luck.

Exactly. Most people are also too lazy to make the investments themselves or even do a little research to find out that most funds aren't worthwhile.

Basic these funds are 'I'll get rich of your lazy ********' schemes.