Originally Posted by
Schrodinger
Thanks for mentioning this and the Stuff article. The main points are that sure a fund may be doing well but when the music stops and it will, you will take a huge haircut in your invested capital.
The funds that are performing above benchmarks need to as the risk is higher than a fully liquid fund with similar performance.
If you have second thoughts and try and withdraw when there is a run on the fund this is when losses will be crystallised.
I think what people need to consider is diversifying their invested capital between a few structures and also asking themselves how they would react if there is a run on the fund. Ideally you would remain but there is huge uncertainty in the value of the remaining units.
I suggest diversifying between different structures, looking at 10y performances, % held in what companies and being ruthless if the fund is looking average. This is because the risk profile is higher than a more conservative fund.
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