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  1. #106
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    8)Interest on borrowing for dividend paying shares is tax deductible for investors
    9)The difficulty of being an investor is that there is only less than 10 companies listed in NZ that I would invest in & put in the bottom drawer
    10)The management team of the company is top priority.Are they aligned with investors?.Is there good succession planning?Has the company got a long history of lifting turnover while maintaining margins? Any doubt ,stay out.
    11)Investors benefit from compounding returns

    12)Conversely a trader should be seeking volatility.Any share/company could do.

  2. #107
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    I may of mentioned this before on a different thread but the facts are clear about traders and day traders back when I was studying Finance at uni as they are relevant today.

    Day traders are those on average that trade everyday and follow purely on 'technical analysis (charting)'. In the US the SEC has plentiful of data on every brokerage account of individuals that trade (this is to maintain regulations so no particular individual gets away with insider trading etc.). Anyways the data shows 2/3rds of the day traders lose money. Of the 1/3rd that can show a profit, maybe 1% can show a decent level of profit over the year. That's a high turnover. The traders that are less hyperactive say once a week or month, again, fall into a less extreme category. However, this group tends to lose the most in 'potential loss gains' ; that is thinking they sold at the high but the share price goes higher, so they're stuck buying at a higher price to get back in. Yet they're still on some profit, they could of made far more by not trying to buy and sell. From the NZ perspective, frequent trades = taxing of the gains. I highly doubt on a net basis, a person with peculiar stock picking or luck would maintain a higher gain than the long term investment approach that could go tax free. I mean right off the bat the tax rate of 10% - 33% + ACC tremendously eats into the gains on an annual basis.

    Those that invest, look to 'fundamental analysis' which is the looking of the company's financial statements and business outlook. If you follow Warren Buffet's advice, he says no one can 'consistently' pick stocks well enough to know they will beat the avg index market return ; consistently over a multi-year decade. That is why after his death, what ever is left after he's gifted most of his wealth away, the remainder will go into an index ETF like the Vanguard S&P500. Because to be able to pick individual stocks is really no different than gambling at the roulette table. Just look at all the Kiwi Saver actively managed fund trying to do the same gamble. They market themselves as having privy knowledge or inside info that gets them the better bet but at the end, the biggest losers are the clients.

  3. #108
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    13)Inheritance:What share portfolio will be in your inheritance?
    An investment portfolio with set & forget companies
    OR a trading portfolio.Good luck with something only you can manage
    14)Diversity in a portfolio is the antithesis of returns.The more "spreading the risk" there is, the lower the expected return long term .The averaging out effect on returns
    Having cash,bonds TD in a portfolio over the long term(which is expected for retirement savings to lower volatility) lowers the returns by a considerable margin and increase the risk of lower returns long term

  4. #109
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    Thought provoking posts SBQ.
    Thanks for taking the time.

    Quote Originally Posted by SBQ View Post
    Canada's choice of pension is a many but TFSA and RRSPs are not mandatory. I recall some years ago the Finance Minister of NZ wanted to make it compulsory for ALL workers in NZ to go into Kiwi Saver. In Canada RRSP is entirely up to you but most choose so because of the ability to defer tax and REDUCES the person's taxable income. I'm not sure if this is done for Kiwi Saver because the small 3% employer matching would make much difference to the person in NZ. I question, if the wage earner were to contribute 8% of their pay into Kiwi Saver, does THAT 8% lower their taxable income? Does IRD recognise you earned say $100K and can take $8,000 off that so your actual taxable income would be $92,000? In Canada they have RRSP contribution limits that you can carry forward if not used so you can have situations where 1 year a person pays so little income tax as they keep lowering their taxable income. I know the carry forword and back for contributions is not allowed in NZ.

    ....... etc

  5. #110
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    I would like to suggest to any "newbies" (Ive been one for 25 years in this game) reading this thread, that they read Percys post 726 on the PAZ thread on the "Unlisted" section. It describes how millionaires are made in this game.

  6. #111
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    Quote Originally Posted by RTM View Post
    Thought provoking posts SBQ.
    Thanks for taking the time.
    Not particularly meant to be thought provoking but to give NZ readers the idea how investing and retirement planning and estate planning is done overseas. Yet when this subject comes about at dinner time table, it's either they don't know enough about finance or investing or economics or to even trying to educate the listeners. I often say like I do in this forum, 'why is it NZ real estate treated so different than NZ equity investments? Real estate has a far lower risk and attracts little or no taxes on the gains vs an investor that buys shares takes a huge gamble (more so if invested abroad) and attracts all sorts of taxes (by the managed fund portfolio paying tax on gains annually), on top of the mgt etc.

    The real beginner's struggle is to first get educated about different asset classes and then look at the tax implication. Financial advisors and accountants I speak to in NZ are clueless in advising BOTH areas (taxation and financial advice?) whereas where I come from, it's mandatory for any CFA or financial planner to have a thorough knowledge about taxation from their client's point of view. The rubbish I hear in NZ is these advisors 'won't advise on anything on the issue of taxes' and say we can gladly arrange a tax specialist for a proper assessment. This is so wrong when at the end of the day, what matters to the client that invests their hard earn money is "what's their REAL return", and not some fudged figure people can see in a prospectus saying they would have sum $x,xxx,xxx.xx in 20 or 40 years.

    https://www.sharetrader.co.nz/showth...l=1#post818260

    Originally Posted by percy
    What I should have mentioned is that these initiatives are being funded by the company's strong balance sheet and excellent cashflow,WITHOUT having to come to shareholders for further funds.I take this as very positive,means management are looking to make profits to fund growth.Most small company's think the only way they can grow is to fund growth with more money from shareholders.This dilutes your shares,and takes management's mind off making real profits.So well done PAZ.
    My second post on this thread.My third post on 23-04-2011 I stated I brought 80,000 PAZ at 3.5 cents.
    Reflecting back on the years,I think I kept doing the right things.ie.
    1] Buy a few shares to get to know the business.
    2] Make sure the balance sheet is strong,mainly cashflow positive, and current assets far exceed current liabilities.
    3]Watch the company to see if they do as they say they will do.
    Then I just kept adding to my/our holding on each positive announcement.
    A good lesson to me that we all know;And KW always told us:Sell your losers and add to your winners.That usually means buying your winners at higher and higher prices.
    Our last purchase of PAZ was 50,000 at 25 cents, for the wife, on 15th April.At lot higher than the original 3.5 cents I paid.So added to our big winner,and have sold other shares in other companies over the years,some at a profit and a few at a loss.Whenever the story, or the reason you brought a share changes,SELL.
    Thank you to all of you who have thanked me, and joined the fun.I guess we are all "well positioned."..lol.
    I think most Sharetraders will realise our PAZ holding far exceeds what I expected our total share portfolio would be.
    re: iceman " It describes how millionaires are made in this game. "

    Doing some simple math in Percy's position in PAZ (now I must admit, he lucked out and I can't speculate how many shares he owns in this company). But from what he's mentioned in that post, it's certainly not how millionaires are made.

    80000 shares @ $0.035 = $2,800
    50000 shares @ $0.25 = $12,500

    As a general rule I do not follow NZX listings and the last time I did ever look at any particularly company listed on that exchange, the biggest problem I found is the lack of volume for any person with a large position to move in or out. So when you say in this game that's how millionaires are made, the first thing that comes to my mind is if a person had $1M in cash, what impact on the price of the shares would it have by buying that much? Likewise if you had $1M in PAZ shares, what impact would the share price have if you tried to move it all out at once? Because the way I look at how NZ brokers operate, they cream you by doing frequent trades, they get more commissions from buy / selling in tranches.

    If you had $1M in any S&P500 listed company in the US exchanges, ALL 100% of $1M would be bought or sold in a blink of an eye and not a bat would happen to the share price. Just set your limit order and you're away.

    BTW, from an investment point of view, the millionaires i've met in NZ have all done it by owning NZ real estate. (i'm not speaking of those that made their wealth from owning a successful business). Yet, i've yet to come across 1 person that has made millions purely by investing on the NZX (and let's not speak about those that started with a huge position).

  7. #112
    percy
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    You missed "Then I just kept adding to my/our holding on each positive announcement."
    So brought from 3.5 cents up to 25 cents.
    I would suggest you read the whole PAZ thread.

    ps.The more research I do the luckier I become..lol.
    Last edited by percy; Yesterday at 07:49 AM.

  8. #113
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    SBQ, you are completely wrong in your highlighted criticism of my post. I'm not guessing. I'm stating a fact that was meant as an interesting reading for "newbies" this thread was started for.

  9. #114
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    Quote Originally Posted by iceman View Post
    SBQ, you are completely wrong in your highlighted criticism of my post. I'm not guessing. I'm stating a fact that was meant as an interesting reading for "newbies" this thread was started for.
    Seems some are their own worst enemy
    Just consider that maybe the probability of you being wrong is higher than you think.

  10. #115
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    Quote Originally Posted by SBQ View Post
    .........................

    BTW, from an investment point of view, the millionaires i've met in NZ have all done it by owning NZ real estate. (i'm not speaking of those that made their wealth from owning a successful business). Yet, i've yet to come across 1 person that has made millions purely by investing on the NZX (and let's not speak about those that started with a huge position).
    I can assure you that I know several members of the NZSA have got millions due to their NZX investments. And you don't need to question whether you can really make millions by investing on just NZX alone.

  11. #116
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    Quote Originally Posted by percy View Post
    You missed "Then I just kept adding to my/our holding on each positive announcement."
    So brought from 3.5 cents up to 25 cents.
    I would suggest you read the whole PAZ thread.

    ps.The more research I do the luckier I become..lol.
    Great effort for a book seller

  12. #117
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    Quote Originally Posted by SBQ View Post
    ....whereas where I come from....
    I really wish that you would go back there.
    om mani peme hum

  13. #118
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    Quote Originally Posted by Snow Leopard View Post
    I really wish that you would go back there.

  14. #119
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    Where SBQ comes from is absolutely irrelevant in this discussion. And if you want immigrants to go back "home" there are other websites you can pontificate on.

    As to his/her argument about tax it certainly is valid. Financial advisors should know tax laws (even in NZ) and be able to advise clients on tax implications. People underestimate the effect that poor tax planning has on portfolios and wealth. To be fair though, I studied tax and estate planning at postgrad level so the qualifications are out there. Whether these are mandatory for financial advisors is another matter but some rudimentary knowledge certainly IMHO should be.

  15. #120
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    It’s not about actually wanting SBQ to go home, and you know that. I welcome anyone into this country, as a visitor or a permanent immigrant, regardless of race or culture or gender or whatever else. But SBQ is constantly running down my country, and criticising our tax systems. He doesn’t have to like how we do things here, but he knew what he was getting into when he came here. So, I make no apologies for sometimes feeling and voicing “if you don’t like it here, maybe you should go back to the country you were apparently much happier in.”

    Quote Originally Posted by blackcap View Post
    Where SBQ comes from is absolutely irrelevant in this discussion. And if you want immigrants to go back "home" there are other websites you can pontificate on.

    As to his/her argument about tax it certainly is valid. Financial advisors should know tax laws (even in NZ) and be able to advise clients on tax implications. People underestimate the effect that poor tax planning has on portfolios and wealth. To be fair though, I studied tax and estate planning at postgrad level so the qualifications are out there. Whether these are mandatory for financial advisors is another matter but some rudimentary knowledge certainly IMHO should be.

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