What are your Investment Rules?

[kiora]

NO ONE KNOWS WHAT THE FUTURE HOLDS

My view is to forget about the noise and forget about cycles

Retirement is now often 10-20 years

https://www.google.com/search?q=nz+w...hrome&ie=UTF-8

For some of us it could easily be 40 years

Long term (>10 yrs) the expected returns from growth assets is greater than conservative assets.
Yes , growth assets could have 2/10 years negative returns but it doesn't matter as returns over 10+years should be higher for the growth assets(by 20-50%)

Disclaimer :unless the advisor is a dud.

[kiora]

Risks of investing explained here

https://www.piefunds.co.nz/Portals/0...l3NBPE1g%3D%3D

What are the risks of investing?



Risk indicator for the Pie Fixed Income Fund

"The risk indicator is rated from 1 (low) to 7 (high). The rating
reflects how much the value of the fund’s assets goes up and
down. A higher risk generally means higher potential returns
over time, but more ups and downs along the way."

[kiora]

Risk profile available here

https://sorted.org.nz/tools/investor-profiler/

Defensive Investor
$10,000 invested for 25 years,could be as low as $65,000
Which is slightly less than 8% CAGR (compounding annual growth rate)

Aggressive Investor
$10,000 invested for 25 years,could be as much as $100,000
Which is slightly less than 10% CAGR

The aggressive investor ends up with a 50% higher return after 25 years

[kiora]

Effect of the FIF rules on immigration: proposals for amendments
An officials’ issues paper

https://www.taxpolicy.ird.govt.nz/-/...20241204200424

How tax rules discourage foreign investor migrants to NZ
https://businessdesk.co.nz/article/f...4b15-446239310

[kiora]

Should you only invest in shares in retirement?

The risks and opportunities of a portfolio heavily weighted to shares in retirement.

https://www.morningstar.com.au/insig...-in-retirement

Checklist for an all-equity portfolio

Have the right temperament to hold for the long-term and resist over trading
Understand the implications of the decision and get your financial house in order
Widely diversify
Consider a focus on income
Using cash to mitigate risk during and after the transition to retirement

"a portfolio is a living and breathing entity and the act of retiring does not freeze a portfolio in place or dramatically alter asset allocation on a single day.Retirements can last decades. And it does not change the person that is retiring. A retiree who built a comfortable nest egg by successfully investing in shares for decades is unlikely to think the act of retiring is a good justification to switch to completely different strategy."

"Bonds are still volatile. Investing in a laddered bond portfolio of individual bonds that mature at different times to partially fund withdrawals is one way to effectively remove the impact of volatility of investing in bonds. Investing in bond funds or ETFs does not remove volatility from a portfolio. In theory if bond yields keep increasing a bond fund or ETF will lose money each and every year"

"There are a couple different roads a retiree can go down to limit the risk presented by volatility in a portfolio heavily weighted towards shares. One approach is to simply construct a portfolio of shares with lower volatility. Some sectors have lower volatility than others. Healthcare, Utilities and Consumer Defensive shares are typically less volatile than cyclical shares like Energy or Basica materials. There are some attributes of shares that also decrease volatility such as shares that pay dividends or large companies as compared to non-dividend payers and small companies.

Another approach to limiting the impacts of volatility is to live off the income generated by dividend paying shares. "

[kiora]

"Adapt or die - a message for the active funds management industry"

https://www.livewiremarkets.com/wire...ADDING%20VALUE

"There is now more money in aggregate invested in passive than active (in total, managed funds are roughly half the US market, with the remainder made up by direct retail, hedge funds and founders/insiders)"

"There is no correlation between passive ownership and superior stock performance (the Magnificent Seven, which have driven so much of the US’s superior stock performance, have lower passive ownership than the market as a whole). "

"And fundamentals—predominantly long-term growth and earnings stability—still explain almost all of a company’s price-to-earnings multiple. You can argue about whether these multiples are too high, but if it is passive flows causing the problem, then the stocks with more passive ownership should be more expensive. There simply isn’t any evidence for that."

"In stark contrast to large-cap funds, almost none of which have been able to outperform the index over a 10-year period, small and mid-cap managers have a strong track record of market outperformance in Australia. According to Morningstar data, the more than 100 funds categorised as mid/small have outperformed the ASX Small Ordinaries by 3.5% over the past five years and 2.8% over 10."

"To keep winning at the small end of the market, fund managers need to be willing to stay small themselves"

[kiora]

Not that I do use these but have toyed with indicaters.

How to Use the Relative Strength Index (RSI) to Trade Australian Stocks

https://thebull.com.au/analysis-opin...3+January+2025

"The Drawbacks of the RSI
Perhaps the greatest advantage of the RSI is its simplicity. But there are disadvantages of which both momentum traders and long-term investors should be aware.

Because of its simplicity investors and traders alike may be tempted to rely on the RSI without combining the RSII with other technical indicators.

Some technical analysis experts caution against making trading decisions based solely on the RSI and additional indicators, advising investors to rely on other buy/sell criteria consistent with their investing philosophies.

RSI signals occasionally lag behind price movements, remaining in overbought or oversold conditions while price trend reversals are coming on.

The RSI is prone to generating false signals in low liquidity or unexpected news events, both positive and negative."

[kiora]

Personally I'm for putting the smallest amount in Kiwisaver to get the benefits of employer & goverment contributions.
Any surplus savings go to other ,more flexible investments.

Are you your kids’ money mentor?

https://www.stuff.co.nz/business/360...3+January+2025

"None of them are 18 or have employers who are inclined to contribute as part of their wage yet (it’s not compulsory) so along with saving, they are channelling a small amount into investing via managed funds.

KiwiSaver is a great wealth creation tool, but we also want them to have flexibility about when they can access it. They’ll contribute when they are over 18 or their employer will contribute. Both options are a great way to learn the ups and downs of investing and the power of compounding interest."

[kiora]

5 questions to ask yourself when capital markets look expensive

https://www.livewiremarkets.com/wire...=5%20QUESTIONS

" the longer your time span, the less likely it is that you’ll lose money."


1. When do you need the money back?

2. How does my income compare to my expenses?

3. What else is in your balance sheet?

Don’t make investment decisions in isolation.

4. What are you trying to achieve?


5. Am I diversified?