Forum Archive Index - January 2000

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

> 
> Firstly, I strongly believe in the use of Index Funds as a basic
> foundation of any investor with a long term view.
>
> In the last 10 years in the US 85% of Mutual Funds have under
> performed their comparative Indexes. I have no reason to believe NZ
> Mutual Funds have done any better 
>
So why not invest in the 15% that outperform the index?
NZ does have the ridiculous situation where Mutual Funds are taxed at 
a higher rate than private citizens and Index Funds which doesn't 
help.
>
> In general I am not a fan of actively managed Mutual Funds. They
> generally have excessive entry and exit fees,
>
If they didn't have entry and exit fees they may be hijacked by day 
traders, which would reduce their appeal to the long term investor.
>
> hold large numbers of stocks  (sometimes 1000s),
>
I 'have heard' that the S&P 500 index funds hold 500 stocks.   It's 
of the same order.
>
> We always like to have a % of  cash in reserve and if the "bubble" 
> burst we'll be in like a robbers dog.  
>
Brierley in GPG has had the same thoughts and has been sitting on a 
mountain of cash for a while now.    As a consequence teh GPG share 
price has gone nowhere of late.  How much cash (in percentage of your 
total assets terms) do you think it is prudent to sit on?  SNOOPY


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