Pastcaring wrote: Diversification produces average returns minus costs.
For the financial industry it is the biggest gravy train ever known.I can' t imagine how much is tied up in funds and pension schemes.Imagine being guaranteed a %age of it every year
It is clear that fund/trust fees eat into the returns produced by the markets, but to what degree is uncertain (but definite). I know the way to keep fees down to a minimum is to buy trackers; and that is what I might end up doing. It is a non intellectual choice but it does take all risk away from choosing trusts/funds (other than the risk of the market obviously).
My original post is certainly not to make a point, but to ask the question. And the more responses I get, the closer I am to making a decision on what to do. So thanks for your reply, even if the maths are disputed.