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Dumb, dumber…

05 August 2004 Angelo Coppola

(01.08.04) Investor behaviour, says Anil Thakersee from Old Mutual, is a subject of great research and debate, and even the very clever cant match the investment returns of the S&P over 15 years.

For example the S&P returned compounded annual returns of 15.5%, while the Mensa investment club in the USA achieved just 2.5%.
 

More importantly Thakersee says that the investment return is far more dependent on investor behaviour than on fund management.
 

And in case you didn’t know this, research has found that investors pour cash into funds as markets rise; they scramble out of the funds as the markets fall; and on average stay in the market and fund for less than three years.
 

And perhaps more worryingly investors tend to chase the flavour of the day or month and year.

Quick Polls

QUESTION

Healthcare brokers have long complained about inflation-plus medical scheme contribution increases; but pandemic may have changed things. What will pandemic-induced changes in hospital utilisation do to medical scheme contribution increase patterns?

ANSWER

Below inflation increase for 2022, then back to inflation-plus
Long-term trend of below inflation increases
Inflation-linked hikes for 2022, then back to inflation-plus
This is a 2-year hiccup, inflation-plus increase trend remains in place
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