The retirement fund industry faces a fundamental conflict between producing profits for owners and delivering a fair return for clients. Owners usually win the day. Salesmanship trumps stewardship; the demand for shareholder rewards outweighs the duty to serve investors. The industry spends heavily on marketing to gather more assets, while many of its products deliver poor returns. Investors are left disappointed even as their service providers earn fat profits. These are the “elephants in the room” we have written about. Long-term investment success rests on just a few simple and unambiguous high-level elements: align the portfolio’s level of market risk to the investment term; use index funds, as they outperform most managed funds; and minimise costs. For their part, investors need to stay the course. Rather than try (and almost always fail) to manage short-term returns, they should manage their own behaviour, particularly how they react to market movements.    This seems like a r...

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