Kiwisaver Strategy

[Aaron]

Is it just me (older white male) or is Kiwi wealth massively overreacting.

https://www.stuff.co.nz/business/ind...a-lim-comments

The comment was that the My Food Bag IPO lacked substance compare to DGLs IPO and he said Nadia Lim in a low cut top was indication of this. He described her as Eurasian fluff (whatever that means)

Kiwiwealth has now blacklisted the company. I know which IPO I would have rather invested in and between the two companies which one I would prefer to be invested in currently.

Admittedly what he said was dumb and unnecessary and possibly hurtful to Nadia who as far as I know has said nothing about this but Kiwi Wealth chief executive Rhiannon McKinnon said it was in the process of adding DGL to its exclusions list in response to Henry’s “derogatory comments”.

I am not sure where Rhiannon has her retirement savings invested but I am not happy she is taking this stance with my savings. It doesn't sound like the actions of a thoughtful investor but a kneejerk reaction, not sure what that says about the rest of her team.

Thoughts on which Kiwisaver to switch to.

I was thinking lowest fees from a larger provider with better systems.

Ironically this is an emotional kneejerk reaction from me so maybe both me and Rhiannon should not be making long term investment decisions.

[Aaron]

Simplicity is also out as managing director Sam Stubbs said it would blacklist DGL until Henry had retracted the comments and “made amends”.

Maybe if there are enough social justice warriors running kiwisaver funds my decision for new fund manager might get easier.

I don't think much of Henry's statements but don't think they are that big a deal. If it was a company run or owned by Ron Brierley then I would definitely be on board.

I wonder if Kiwiwealth and Simplicity invested in MFB.

I guess if Henry had just said that he brought his company to market to invest and grow the business and the people bringing MFB to market were cashing out and in hindsight may have ripped off the idiots who invested in MFB, he might have come off better.

[SBQ]

@Aaron:

I'm not in a Kiwisaver scheme and never will be. But if I was forced to, I would pick the fund that has the absolute LOWEST, PASSIVELY managed fund there is. One that just does nothing but buy Vanguard's S&P500 ETF ticker VOO or VOOG. It sounds like the fund you are in with such a person like Ms Rhiannon, is an ACTIVELY managed fund; if you say how she manages your investment in their portfolio. As Charlie Munger always reiterates, 'there shall be no compensation scheme to pay these fund managers for merely doing the same as everyone else... by choosing an overly diversified portfolio because they're too scared and too lazy to actually learn what companies they want to invest'. A person investing in KS does not need to be invested in 1000s of different companies and asset classes for the sake of 'DiWORSEsification'.

[Aaron]

@Aaron:

I'm not in a Kiwisaver scheme and never will be. But if I was forced to, I would pick the fund that has the absolute LOWEST, PASSIVELY managed fund there is. One that just does nothing but buy Vanguard's S&P500 ETF ticker VOO or VOOG. It sounds like the fund you are in with such a person like Ms Rhiannon, is an ACTIVELY managed fund; if you say how she manages your investment in their portfolio. As Charlie Munger always reiterates, 'there shall be no compensation scheme to pay these fund managers for merely doing the same as everyone else... by choosing an overly diversified portfolio because they're too scared and too lazy to actually learn what companies they want to invest'. A person investing in KS does not need to be invested in 1000s of different companies and asset classes for the sake of 'DiWORSEsification'.

Thanks for that pretty much my way of thinking as well.

I wonder if the advice to sit tight is valid if you are turning 65 in the next year or two and we are like Japan in the 1990s. The actions of the central banks are historically extreme from what I understand and every action has an equal and opposite reaction.

https://www.nzherald.co.nz/business/...Y553ERPW7J2HA/

[ynot]

Doesn't effect me but does my kids. I'm interested to know if some of you have jumped into cash in kiwisaver. Markets not looking to hot currently.

[SBQ]

Doesn't effect me but does my kids. I'm interested to know if some of you have jumped into cash in kiwisaver. Markets not looking to hot currently.

Hindsight is 20/20. To sell stock (or equity holding in a Kiwi Saver scheme) would be selling at a markets much lower and the lesson to that can be you may lose out on potential future gains on a market rebound. No one knows where the bottom will be as going into a cash position, you are saying you can buy LATER on at a LOWER price.

The whole idea of Kiwi Saver is to give your money to a KS provider, who is suppose to know how to 'navigate' market volatility and provide long term returns. They charge a fee for the administration of your investments and for their professional advice, they should be the ones making the decision when to buy or sell stocks or when to sit on cash etc. However this is rarely done as majority of managed fund providers do not do better than the index market return. Why do people pay KS administration / mgt fees to these managed funds for doing what the rest of others do? They obviously do no know when to go cash and buy at the lows or when to sell high. The excise 'non-performance' by just taking weekly contributions and buying the an index ETF or a certain stock that is in favour. They certainly are not in the business of timing markets like a hedge fund would do.

Therefore if it's in your decision to decide when to sit on cash and try and time the market, you best to do so OUTSIDE of any KS scheme. You owe the mistake to yourself if you timed when to buy in the worse way or by missing out gains when the market returns violently. I've seen this happen back during the 2008 GFC when many investors thought they could wait it out to buy lower but after a few years, they end up doing worse by buying at prices much higher.

[kiwico]

If we were in Australia our KiwiSaver or equivalent might be this high. This comes courtesy of the weekly Barefoot Investor email.

I was above my age group average but I'm with Juno KiwiSaver, so I'm down 24% from my early September high and now below my age group average. They have a weird way of showing the shortfall through, they instead show what I have gained (or lost in this case) since I joined them almost two years ago. So despite the big gains in 2020 and 2021 I am down despite 14% of my salary going in a month. WOW!

Oz savings.jpg

[Bjauck]

Doesn't effect me but does my kids. I'm interested to know if some of you have jumped into cash in kiwisaver. Markets not looking to hot currently.

I was in a conservative unit from before Covid but am now in a balanced growth unit. It is worth less than the Kiwico posted Australian male average for my age group (early 50s) though.

According to sharesight my KS has returned 1.5% pa after tax and fees since January 1st 2020….!

[SBQ]

Thanks for that pretty much my way of thinking as well.

I wonder if the advice to sit tight is valid if you are turning 65 in the next year or two and we are like Japan in the 1990s. The actions of the central banks are historically extreme from what I understand and every action has an equal and opposite reaction.

https://www.nzherald.co.nz/business/...Y553ERPW7J2HA/

NZHerald does a pay subscription or registration block so can't read the article. But regarding on the effect of central banks, I would say the RBNZ vs the US Fed central bank would be a world of difference in terms of impact on the share markets. When interests rates go up in the US, it's usually the 'growth / tech' stocks that have NO earnings or massive losses that get punish the most. US stocks that are long well established with proven earnings regardless of the interest rate outcomes will weather the storm fairly. To illustrate this, just look at the the DOW Jones index which over 33,000 recently vs the crash of March 2020, it was around 18,000.

I can't really comment much on the Kiwi Savers that are solely invested on the NZX because all that convinces me to not touch any NZ companies is the fact that the NZ investment environment tends to prefer 'dividend payments' to shareholders instead of maintaining profits on the balance sheet which -> increases book value per share -> increase share price (which the capital gains are tax free ; note most NZ companies don't get the full 100% imputed dividend credit!! Guru investor Peter Lynch has said "over the long term there's a 100% correlation for a company's stock price to go up if their earnings continue to be booked in on the balance sheet". But pay those profits out and you will simply deflate the shareholder's equity.

[SBQ]

If we were in Australia our KiwiSaver or equivalent might be this high. This comes courtesy of the weekly Barefoot Investor email.

I was above my age group average but I'm with Juno KiwiSaver, so I'm down 24% from my early September high and now below my age group average. They have a weird way of showing the shortfall through, they instead show what I have gained (or lost in this case) since I joined them almost two years ago. So despite the big gains in 2020 and 2021 I am down despite 14% of my salary going in a month. WOW!

The benchmark metric should be based on the market index return. So again, take the Dow Jones index today and compared to it back in 2020. It is still WAY HIGHER now than it was at the peak of 2020. There should be NO excuse for any fund managers that can't book a massive gain over the past 3 years. If they have managed to lose most of the gains in 2020 and 2021, then they must be invested in highly speculative stocks with no earnings. Many of the tech stocks on the Nasdaq have lost 70% of their value and on average, say 50% for the big common name tech stocks that have no earnings. Look at Roblox for eg that had a peak of $140 earlier in the year to be around $30 these past weeks.

@Bjauck: 1.5% since Jan 2020 to now??? That is a complete fail and your $ would have been better in the bank. The idiots in these fund managers always get their cut. As Buffet says, "The helpers help themselves"