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I'm in capital guaranteed with Aussie Super so
the above can't happen - theoretically.
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Im sure the investors in Barings bank ( etc ) thought the same :-)
I doubt anyone really knows whats happening in the background for any of these entities, in these days of automated trading etc.
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The idea that the Govt somehow can hold the money and pay out an "average" return regardless of actual market performance won't work.
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If this were true, insurance companies would not be able to make a profit.
It also means that the doctrine that the markets will average out over time is also a lie
ie in the past, if you lived long enough, you got a pension, if you died early, you didnt get paid out, ( but the govt kept all you had paid in ),
It was a swings and round abouts lottery.
Andrew
who as noted earlier has as little as possible in super.