Great article, JCB .
Agree, definitely a great article!
Thanks for this article. As a mug retail investor, I am quite happy to be satisfied with the crumbs off the edge of the table, but I hate being sucker punched. I could see the bull market coming to an end and tried to realise equity investments as they reached fair price and move the money to the 'safe(r) haven' of fixed interest, only to lose more than if I had stayed in equities. I am not sure that I have learned anything more from this experience. Understanding risk before the event is very hard, and part of the risk is understanding the competence of the managers we trust to manage our funds. Thanks again.
Spot on Charlie, painful lessons not learned
The purpose of the sell spread is to protect the interests of investors who remain invested in a pooled from the transaction costs resulting from investors who redeem. Would you prefer those that stay invested bear the impact of increased transaction costs caused by investors the redeem? Spreads need to reflect the true transaction cost, and not be used to deter investors from redeeming, but are important to ensuring the fair and equal treatment of all investors in a pooled vehicle.
Temporarily increased sell spreads can make sense at times and depending on the underlying assets. But investors and advisers need to be made more aware up front that this can happen, and importantly, formally and fully informed when such changes are implemented. I’ve heard of an example in March where the latter did not happen and the few investors/advisers that found out are furious.