let's say your 75 years, know little (nothing) about the market, retiring, live alone but saved $1m during your life.
you hear ETF's are the best bet and so invest all your savings in ETF.
The next year, there is a black Swan event like the GFC. You have an ETF and match the market you lose 60% of everything overnight any dividends are halved.
Alternatively, let's say you invested in at big LIC but the next year when we have the crashyou notice you're still getting your dividend cheques unchanged, yes your investments went down, but they showing some resilience.
because you've got your dividends, you've been able to pay your rent , pay your power bill, and fill your fridge. Because you're a bit stressed you've been I'll go fishing.
A couple of years later, things start to recover. your mate, who invested in the ETF could not pay the rent and was living in the back of his car.
I reckon there's a place for big LIC and a place for ETFs and a place for direct shares. I don't hold AFI not interested, but I think the products okay despite what we hear.
- My own, personal view and opinions not to be taken as advice.
AFI Price at posting:
$7.32 Sentiment: None Disclosure: Not Held
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