While spending some time alone with an asset manager recently, I was told by him that their CEO tested new and prospective fund managers by asking them the following question: “If you’re saving over your working life for retirement, do you want a lifetime of rising markets or flat markets?” They all give rising markets as the answer. The CEO says, “wrong, you want a lifetime of flat markets”. After thinking about this for a brief moment, I realized that he was absolutely correct. But the assumption would be that you would be buying income bearing assets over this savings time period, not speculative capital growth assets. This will result in the investor having bought a greater number of income bearing assets from the flat market conditions vs. the rising market conditions, resulting in a higher income in retirement years. Not many will follow this, but remember I often say that it is the number of units in the fund that determines your income, not the value of the units.