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According to Warren Buffet, Rule No. 1 in investing is "Do not lose money" and Rule No. 2 is "Never forget rule 1." So it was with some incredulity that we read a weekend report advocating holding tracker funds as core investments in a bear market.
The tortuous logic seems to be that stock pickers have lost money while trackers have lost a bit less. Combined with the perennial optimism that the market is about to turn up, the thought process leads to trackers.
This is nonsense. A loss is a loss. Merely losing a bit less than someone else isn't too clever. Trackers ensure you lose by the amount the market goes down. Only buy them if you plan to lose money.
The simplicity of Gilts and US Treasury Bonds continues to escape the attention of the pundits.
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