Comments on Alan Kohler “The big four's fabulous crisis”, 12/10/2009, http://www.businessspectator.com.au/bs.nsf/Article/The-big-fours-fabulous-crisis-pd20091012-WQRRS?OpenDocument&src=sph
Alan, it may be a bad time for super funds to switch from equities to RMBS now.
Super funds had invested in the equity markets before it went down. Equities have not fully recovered to its highs and are still recovering. So super funds should stay in the equity markets for their anticipated recovery to recover funds' values.
By switching to RMBS now from equities, super funds' paper loss would be realised and will lose the opportunity to recoup their values, because RMBS will not offer the same opportunities as equities in the near future.
So the argument for super funds to invest in RMBS now is wrong for portfolio management.
That would not be prudent.
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