I actually just finished a really good book along these lines...

I actually just finished a really good book along these lines called "The most important thing" by Howard Marks and he articulated risk management really well in that and got me thinking a bit differently about it. He basically said that if you are managing money conservatively then your goal should be to try and capture most of the gain in a bull market (accepting you won't fully be able to keep up with it) and then massively outperform in a bear market because you are holding stocks that are significantly more solid financially than average.

Another point he made is that in bull markets we just purely look at raw returns whereas very few people actually consider the risk taken to achieve those returns as it's hard to quantify. So looking at it through that lense would mean that if two funds returned 10 percent then realistically the one that took less risk has outperformed the other.

I can remember being a shareholder in AFIC at the time of the GFC (that was my very first share purchased in 2007 and actually a great way to learn about financial markets) and they managed to hold their dividend steady right through that period.

At that point they were highly rated by the market and traded at a reasonable premium so it's been quite amazing to watch sentiment towards the whole sector decline so much.

I think the next time we get a protracted bear market might be a make or break moment for the LIC sector where they either remind everyone of their value or fall just as much as everything else and potentially then go into a permanent decline.

Interestingly if you look at what Bill Ackman is launching over in the US there is clearly still some appetite for close ended funds that are well marketed (and in this case connected to a bit of a celebrity fund manager which has it's own drawbacks).