Car Deals

photo credit: king_david_uk

Proponents of pooled funds argue that there is a great uncertainty on the stock market, and that it is dangerous for the private investor to play there, as they get prone to high losses and costs. Although there is a grain of truth in this, the argument for holding an investment in a unit trust or investment trust is just as good as that for holding equities. In the long term, returns from holding equities have outstripped returns from safer investments such as corporate bonds, gilts and deposits. In spite of these gains, the fact still remains that professional investors have some advantages over private investors. The advantages enjoyed by professionals span three main areas, namely:

(i) information gap

(ii) economies of scale and

(iii) expertise, and these shall be considered in turn.

Professional investors, fund managers to be specific, have become increasingly powerful as the (more…)