Michael Jensen, then an economist at the University of Rochester, used the data to analyze individual fund performance between 1945 and 1964. He found that individual mutual funds were unable, on average, to outperform a strategy that simply bought and held a marketwide portfolio. In fact, there was scant evidence that any individual fund delivered better returns than you’d expect by random chance.
After 100 years of data, the story has stayed the same. Only more so. Stock returns compounded at about 10% per year over the full century.
What does this mean for average investors?
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As a kid growing up in Kansas, we regularly did tornado drills in school. When the siren sounded, we’d rush downstairs into the auditorium and huddle in its southwest corner, because tornadoes in Kansas tend to move northeast. After a few minutes of hunkering down, we’d head back to class. Nobody particularly loved those tornado drills, but everyone understood why they mattered.
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Following a volatile but generally profitable first three quarters of the year, the majority of markets delivered further gains over the final three months of 2025.
International share markets provided the strongest gains, with the New Zealand and Australian share markets taking a back seat over the quarter. Similarly, with global interest rates having receded from their post-Covid peaks, returns from fixed income assets delivered in line with expectations – moderately positive.
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Over the past few days as global politics create uncertainty and global share markets have responded, I thought it would be good to reflect on markets and provide some perspective on what is happening and as investors, what can or should we do about it, especially when it comes to our investments & KiwiSaver funds.
The longer I’ve been in this industry, the more my perspective on market downturns—corrections, recessions, and the like—has evolved.
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Planning for retirement is a crucial step toward ensuring financial security in your later years. A key part of this process is determining your "retirement number"—the amount of savings required to maintain your desired lifestyle.
Understanding this number helps shape your savings strategy and investment decisions, guiding you toward a comfortable and secure retirement.
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“What is your number?” That is the catch phrase of a popular advertisement that runs and re-runs amongst financial advising companies.
These types of campaigns are popular as many people will have a jolt of panic at some point just past mid-life, where they think, “Will I have enough for my retirement? I’d better get prepared.” Having a target ‘number’ can help you to understand just how big the mountain you must climb, really is.
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