Quote:
Originally Posted by Michael
I actually asked IBTC to buy some of its Equity fund when the market was so bullish that I couldn't get anything I asked for. But what really stops an equity fund from falling to zero. The div yields on equity funds are really quite poor and my Pension fund being managed by IBTC sure is a disaster. I would prefer to follow Buffetts advice. "Put all your eggs in one basket, and watch the basket".
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Generally funds have low dividend yield as they prefer not to pay dividend. Infact it is clearly stated in IBTC ethical prospectus that dividends will be low. They advised fund holders to sell some of their holdings if they need regular income.
An equity fund will fall to zero if the market falls to zero. Remember funds are forced to diversify into many stocks due to restrictions on how much they can invest in one company.
I like Buffets idea but i am not sure he is invested in only one company. He cant due to the size of his holdings obviously. Concentration is definetely important. Personally if i cant invest a certain amount in a company, i dont bother.
Right now i am waiting for the market to stabilize so that i can reduce the number of banks i have. I dont want more than 4 in my portfolio.