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ianbeale

City Bonus For Year 07

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With the SM at the same level as it started the year will there be big city bonuses pumping up the market in spring 08 (assuming no big SM growth over the next months). And if there will be bonuses, then WTF for!!

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Yes there will.

Good traders make money even when the SM falls (by selling short).

Whether or not they will want to pile their bonuses into property is another matter.

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With the SM at the same level as it started the year will there be big city bonuses pumping up the market in spring 08 (assuming no big SM growth over the next months). And if there will be bonuses, then WTF for!!

This is what most fund managers deserve, clowns the lot of them, 3% commission for what, tracking the SM as it falls, FFS I can drive a car off a cliff too.

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As to whether fund managers earn their money, Motley Fool pointed out a fascinating fact:

The market, basically, IS fund managers. They make - I don't remember, something like 99% - of all trades. The other 1% being private investors.

When a stock is sold, it is generally one fund manager, who believes he has good reasons to want to sell at the current price, selling to another, who believes she has good reasons to want to buy at the current price.

The aggregate performance of the market as a whole is therefore the sum of all decisions made by fund managers.

The goal of each manager is to "beat the index" (beat the market) or else there would be no point in their existence, one could just use a tracker fund.

Yet when you realise that the fund managers ARE the index, you see immediately that only half of fund managers can do better than the index. By definition, half do worse than the index.

Which is why motley fool say, better buy a tracker than a managed fund. You get the same expected return at lower charge.

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As to whether fund managers earn their money, Motley Fool pointed out a fascinating fact:

The market, basically, IS fund managers. They make - I don't remember, something like 99% - of all trades. The other 1% being private investors.

When a stock is sold, it is generally one fund manager, who believes he has good reasons to want to sell at the current price, selling to another, who believes she has good reasons to want to buy at the current price.

The aggregate performance of the market as a whole is therefore the sum of all decisions made by fund managers.

The goal of each manager is to "beat the index" (beat the market) or else there would be no point in their existence, one could just use a tracker fund.

Yet when you realise that the fund managers ARE the index, you see immediately that only half of fund managers can do better than the index. By definition, half do worse than the index.

Which is why motley fool say, better buy a tracker than a managed fund. You get the same expected return at lower charge.

Absolutely right. Which is why trying to beat the market with a managed fund is a zero sum game. The index is just the average performance of all funds and you have no way of telling which half of them will beat the market and which will lose. At least with a tracker you know you won't lose. Add into the equation the extra fees for a managed fund and the chances are that your investment will underperform the market.

What would happen if everyone decided to track the market though? What would they be tracking?

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As to whether fund managers earn their money, Motley Fool pointed out a fascinating fact:

The market, basically, IS fund managers. They make - I don't remember, something like 99% - of all trades. The other 1% being private investors.

When a stock is sold, it is generally one fund manager, who believes he has good reasons to want to sell at the current price, selling to another, who believes she has good reasons to want to buy at the current price.

The aggregate performance of the market as a whole is therefore the sum of all decisions made by fund managers.

The goal of each manager is to "beat the index" (beat the market) or else there would be no point in their existence, one could just use a tracker fund.

Yet when you realise that the fund managers ARE the index, you see immediately that only half of fund managers can do better than the index. By definition, half do worse than the index.

Which is why motley fool say, better buy a tracker than a managed fund. You get the same expected return at lower charge.

And theres comissions to be made by the churn of the stock held in funds, ie it is just a big payola machine for these w*nkers to fill their greedy pockets from, that is the real purpose of a fund, they dont only hold/trade shares, lots of bonds of varying quality including no doubt toxic waste the pension funds will get left holding, all by city gents agreement of course.

Yes there will be big bonuses next year, the only thing that will vary is the amount of t*ssers getting them, if we have calamity, then maybe a few less competing for 'Free London' as I call the property bought with free money, as for the back office bods, I suspect a few will already be getting ready to be outsoursed to India and the rest will just have to work harder for the same pay for the next few years.

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Guest Popalot

If they are still putting money into property at that point, they really will be City numpties....I think the clever ones will be putting the dosh in Icesave by then.

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