Posted by Sean Maudsley-Barton | June 22, 2012
Are percentages confusing?
The regulator has recently said that financial planners should avoid percentages and use fractions instead. At Parsonage we work hard at making sure our customers fully understand our proposed investment strategy and a key tool we use to project into the future is % growth.
I was recently listening to More or Less on Radio 4 and they used a simple example to outline how percentages can so easily tie people up in knots. The example went like this… I invest £100,000. It increases by 250% then falls by 60%. What is it worth now?
The answer is £100,00o you end up where you started.