Equity income funds: Consistency at a cost

Key Points Sharemarket returns are lumpy and inconsistent Equity income funds aim to even out the lumps Might be useful for some, but there’s a long term cost The sharemarket promises higher returns than investments like cash and bonds, at the cost of volatility. Returns from shares, unlike those from bonds, are terrible one year, okay the next and wonderful the year after. That’s the price of higher returns. derivatives (like options, futures and swaps). These enable investors to speculate, hedge or divvy up an investment in countless ways. Using derivatives, you don’t need to own a share to...

The sharemarket promises higher returns than investments like cash and bonds, at the cost of volatility. Returns from shares, unlike those from bonds, are terrible one year, okay the next and wonderful the year after. That’s the price of higher returns.

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