Retirement /Diverseified Managed Funds

[Sgt Pepper]

What a sweet deal - is it right the worst you can do in a year is 4%, but you can earn more?

Yes you always earn a minimum of 4%p.a, the best return was in 2019 when it earned 14%. As it is a closed scheme when you do cash up you are entitled to your share of the reserves, so if the fund had a return of say 7% and a reserve ratio of 5% you would be credited with 12% return when cashing up

[Raven74]

Government guaranteed 4% minimum is a super sweet deal in the current environment.

[ronaldson]

I understood the guarantee has in fact been called upon since around 2009 for the NPF Defined Benefit Fund and has cost taxpayers over a billion dollars already with further large top up payments still due annually from the Government far out into the future as the pension phase runs off. The cause was under funding in an actuarial sense by both participants and employers during the accumulation phase. This is probably the premier financial scandal in NZ history and occurred in plain sight, with the consequences still impacting.

[percy]

Posted this here as I did not know where it should be posted..
Diversification is often described as the "only free lunch" in investing, but Warren Buffett wouldn't agree. The Oracle of Omaha once said that diversification is but "protection against ignorance," an approach that "makes little sense if you know what you're doing."

[GTM 3442]

Posted this here as I did not know where it should be posted..
Diversification is often described as the "only free lunch" in investing, but Warren Buffett wouldn't agree. The Oracle of Omaha once said that diversification is but "protection against ignorance," an approach that "makes little sense if you know what you're doing."

I'd agree with both points of view, to be honest. As an individual, I wouldn't mind access to the sheer amount of analysis and research that Mister Buffet can command to be able to concentrate rather than diversify

Diversification is a tool to reduce risk - and not all risk, but primarily share selection risk. In terms of simple arithmetic, it's easy enough to get one out of one selection wrong, but harder to get ten out of ten selections wrong.

Isn't there a Sharetrader thread along the lines of "pick one company and leave it untouched for ten years"?

[Walter]

Posted this here as I did not know where it should be posted..
Diversification is often described as the "only free lunch" in investing, but Warren Buffett wouldn't agree. The Oracle of Omaha once said that diversification is but "protection against ignorance," an approach that "makes little sense if you know what you're doing."

Isn't he the same guy that said to buy and hold the S&P 500?

[Swala]

Isn't he the same guy that said to buy and hold the S&P 500?

He is indeed, but that was advice for those who didn't have the time or knowledge to try to specialise i.e. most people.