ASIC - Negative returns

ASIC - Negative returns - Negative returns: the dark side...

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Negative returns: the dark side of investments (from ASIC “FIDO” website) People invest because they expect to make money. However, nobody can guarantee what will happen in the future. With the important exceptions of cash and 'capital guaranteed' investments, negative returns are always a risk that you have to reckon with. By negative returns, we mean a net annual capital loss after taking into account any income you received. The capital loss might be small or large, and certainly need not mean the loss of all your capital. How big a risk could you face? FIDO asked our licensed actuaries for advice about the probability of negative returns for: the most common types of investment strategies offered by major super funds and managed investments the major asset classes. Here's what our actuaries told us. Investment strategies A negative annual return is not expected more frequently than Growth Invests 70–80% in shares or property Once in every 6 years Balanced (Invests 60–70% in shares or property, the rest in fixed
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This note was uploaded on 12/06/2011 for the course ECON 101 taught by Professor Shen during the Three '11 term at Monash.

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ASIC - Negative returns - Negative returns: the dark side...

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