A fortnight ago, we looked at the first half of an article by United States finance academic and fund manager Clifford Asness.
Tuesday, August 23rd 2005, 8:26AM
by The Landlord
The article was written for a forthcoming issue of the Financial Analysts Journal and is of interest because it challenges many of the commonly held views on investing.
Last time, Asness criticised the tendency of investors to choose sectors, like the US or emerging markets, on historic performance.
We also read that, while fund managers say that timing your purchase of shares is not important and everything will turn out okay in the long term, reality can be different. If you buy when prices are high, you may have to wait 10 years or more just to beat inflation.
This week, Asness shows us why dividends are good, what present high US stock prices tell us about future returns, that do-it-yourself trading is generally a bad idea and, finally, perhaps with Michael Cullen in mind, why international diversification is not a waste of time.
