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Research fails the test of time

I must respond to the recent article on analysis from Bates Investment Services, saying that cash beat 97 per cent of the funds in the all companies sector.

I usually have a high regard for the Bates&#39 research team but I cannot remember for a long time seeing such a piece of nonsensical research. In addition, at a time when public confidence is already low in equities, how does this do anything to encourage investors to put money into the market? I suggest people should be buying and selling all the time, which is guaranteed to make people lose money.

We all know there will be periods of time when cash will beat equities. This piece of research tells us nothing new.

However, if we go back to the start date of this research, October 9, 1998, and run it through to August 27, 2004, we see that at least 25 per cent of the funds in all companies sector have beaten a 4 per cent compound cash rate.

Perhaps in future we could see more constructive research.

Mark Dampier

Hargreaves Lansdown

Bristol

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