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  1. Market values are not always well defined.
  2. For some classes of asset, such as gilts, if held to maturity, the figures are of no relevance whatever.
  3. Market value is subject to fluctuations, frequently severe, over short periods. Therefore, it is not at all appropriate to regard market values as any indicator of what might be described as a store of value. The conclusion must be that the market value can provide virtually no useful information as a predictor of the all-important long-term future.
  4. High end-point market values lead to the apparent conclusion that the investment manager has done well. However, this ignores two points, the first being that further contributions will purchase less than previously, which should not be regarded as good news. Secondly, if the market value falls, then the investment return “disclosed” must have been too high, and hence an unreliable planning basis. Even if it increases, it is no more reliable, because the figure disclosed would have been too low.
  5. No account is taken of “risk”, which is difficult even to define, let alone tackle.
  6. Finally, on a technical point, the “time-weighted return” commonly published is an artificial concept, and is not actually a return which is achieved on the fund.