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How to Value Shares and Outperform the Market by Glenn Martin

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21. Key Risk Controls

Your overall aim should be to maximise the long-term real market value of your savings. Excluding inflation, which you cannot control, there are four key threats to your ability to achieve this aim:

  1. third-party fees and management costs
  2. poor investment returns
  3. tax
  4. credit risk.

You can mitigate or eliminate these threats by implementing the key risk controls set out in this chapter.

Manage your own funds

Apart from poor investment performance, commercial fund management fees are the biggest threat to the real value of your equity savings. Over a 40-year period, your self-managed fund will be worth 93% more than a typical commercially managed fund – purely because you will be avoiding high commercial fund ...

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