Many investors would have the familiar experience of finding it difficult to make money from unit trusts. My own experience with the few unit trusts that my family and myself bought is the same. In my last post on Dollar Cost Averaging Works Best with Volatile Stocks/ Unit Trusts, I charted the price performance of the 2 unit trusts in my Supplementary Retirement Scheme account since my first investment 6 years ago. They have not recovered to the initial price which I made my entry even though the Dow Jones Industrial Average is reaching new highs. Why is it so difficult to make money from unit trusts?
There are several reasons for it. Firstly, studies have shown that it is very difficult for fund managers to beat the market indices. So, most actively managed funds actually fare poorer than the market indices. This poorer performance is even before deducting ...
