Quote:
Originally Posted by crc_error
I see what your trying to say, but Narva is not a capital guaranteed investment either. The unit price can go up and down as well. So there would be no difference in selling down units when unit price is low in a growth fund, compared with Narva paying out a dividend when unit price is low.
|
Actually there is a huge difference.
Distributions are paid out of profits, not out of capital.
Selling down units from growth fund comes from capital. In theory, you should have more capital than from an income fund - but if you experience negative capital growth, selling down units for cashflow compounds the effect of the loss quite dramatically.
Quote:
|
Narva is not immune to loosing money. Who would have thought Centro would do what it did! They are allot bigger than Narva and would have been considered as safe as houses before their bust.
|
That's not an accurate comparison at all.
Centro is a listed property trust - they invest in real estate and used extremely high levels of leverage to get their returns. When their credit crunch caused them problems with debt refinancing and caused their assets to be revalued - that's when they lost lots of money.
Navra is a fund manager which invests in 20+ of Australia's largest and safest shares. They do careful due dilligence on what they hold, and if one went under, you wouldn't lose the lot - and Navra would most likely not have held them in the first place if they were at risk (eg high debt levels). Navra do not use leverage themselves - they have no direct exposure to interest rate fluctuations, nor to credit availability issues.
__________________
Sim'
This is a general comment only and does not constitute advice. Before making financial decisions you should seek advice from a professional adviser, who can take into account your specific circumstances and investment goals.
|
