As you know I tend to collect junk mail that I am randomly sent – I am always interested in what people have to say about various bits and pieces. I am particularly interested in the material sent out by professional money managers. It must be difficult to justify taking money off people when you cannot match your benchmark.
The latest offering is from Clime Asset Management and I have snipped the relevant email below in full –
Since CAM is a listed entity I thought I would have a look at its performance versus the S&P/ASX 200 price index, I didn’t use the Total Return Index because I couldn’t get reliable adjusted data for CAM. The graph below shows the result of the comparison.
There was a brief period where CAM outperformed the index but it has largely been one-way traffic. This does raise the question of why investors opt to give funds to others to manage on the basis of a track record that is sub-par and this question applies to the entire fund’s management industry. If there were a single subject I would like to see introduced into schools it would be financial literacy and as a subtopic, it should include evidenced-based decision making so that the next generation of investors can perform this sort of analysis and then opt to make their own decisions. The interesting thing about investing or trading is that it doesn’t actually take great intellectual horsepower, it does require a degree of emotional control but the basics are not that hard to master. And interestingly a lot of the material needed is actually free, you just need to know where to look which is something I will be discussing at length in our upcoming Retire Early functions.