I have liked ARG for a long time, but only got into it (for my...

I have liked ARG for a long time, but only got into it (for my SMSF) recently. I also recommended that two of my adult children invest in ARG. As my thinking on this has been realtively recent, I'll proffer my reasoning.

1. ARG has been a consistent performer for decades. As a negative aside, I would expect a firm that specialises in investing to do significantly better than the ASX200 index, not just fractionally better, but then I am unaware of an Australian investment company, or a managed fund, that has done better in the long run.

2. ARG (and MLT) gives an investor a good spread of shares that pay dividends, and so the investor does not have to spend endless hours investigating many shares to select a balanced portfolio. This can suit both a small investor and a large one, as is detailed below:

2.1 For people who have not got hundreds of thousands to invest, and for whom the stock market is not a passion, it is not economical to spend a great deal of time to decide on a portfolio, and the brokerage of buying ARG is less than it would be to buy small parcels of shares. This is why I suggested ARG to two of my adult children as a long-term investment.

2.2 For folk who have a fair sum to invest, and who have money with managed funds that invests in Australian equities, then it is cheaper, in my view, to abandon the managed funds and buy into the likes of ARG. This is what I did, except that I split the sum invested equally between ARG and MLT so as to spread the investment style. I have about 5% of my total share holding in each, but I would be happy to have a greater %. Obviously, if a managed fund has a fantastic record, it could be worth the extra costs, but I have not found them to be all that good relative to ARG.

3. ARG took a punt on some resource stock, mainly RIO and BHP, which is a departure from its historical pattern, and not a path that MLT took. The likes of BHP and RIO that have operational mines and oil wells that churn out an avalanche of cash are insulated from the credit crunch, which is not the case for new comers, and if they are into bulk commodities, which RIO and BHP are, they are going to do well in coming years, whereas the credit crunch is going to slow down the arrival of competitors. I liked this departure from ARG's historical pattern, and just to balance things up a bit, ARG holds a fair investment in MLT.

4. ARG and MLT make a point of investing in shares that pay dividends, and this income is passed to their shareholders to give a steady dividend. Such money as they make as capital gains (which mergers and acquisitions, plus portfolio rebalancing, occasion), tend to be re-invested. One gets a nice and growing income from the static share holdings, and the growth is enhanced by the re-investment of capital gains.

5. Because there was a spate of mergers and acquisitions last year, ARG made a fair capital gain, and so it commenced this fiscal year with a huge bag of cash ($228 million). An investing company with that sort of war chest in the current depressed market is going to be able to cherry pick investments that will be worth much more a few years hence.

6. As you would expect ARG's SP tends to mirror the ASX200 index, and if this trends upwards over the decades, ARG will trend upwards, and its dividends would tend to move in pari pasu (equal steps). If you are fearful of the long-term trend in share prices, then you should not be in the game.