Quote Originally Posted by Baa_Baa View Post
Even in a downturn however severe, it's easy to forget that there is a constant stream of income flowing into the Kiwisaver providers, which has to go into their investment portfolios, including stocks. So when one stops exposure to stocks in whatever parts of their portfolio, to avoid the paper losses, they also forego the fact that the Kiwisaver provider continues investing in lower priced shares during a downturn.

Personally I used to think Kiwisaver was something I should actively manage, by changing portfolio spreads, but I've come around to thinking it's better to just choose the portfolio spread/balance that suits me overall and forget about it, and let time do it's magic thing.

Not necessarily true. In times of panic, people will be switching out of growth funds and into cash/conservative. If this is the case, a shrinking fund needs to realise assets to pay out redemptions. No cheap shares will be bought at the bottom, as all that cash will be required to fund the redemptions. In fact it's more likely that the fund manager will have to sell at the bottom.

One of the pitfalls of unitised structures is that your are beholden to the behaviour of other investors.