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  1. #31
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    That is effectively what I did but I also maximised my employer contribution at the time (in its early days). The rules changed after I left the country but had I stayed, no extra would have gone in due to the costs of the KiwiSaver provider. That said, the return has been good for a growth fund and it now just sits ticking away nicely as the bulk of the contributions were in the GFC days. It should be there as a nest egg when I qualify to withdraw (at no loss of contributions).

  2. #32
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    But do you get the $543,21 if you are not in the country?

  3. #33
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    No, I stopped contributing when I left the country. It now just sits. I could cash it in now but I would lose the govt. contributions. Overall, it has a good enough performance to leave alone for the foreseeable future.

  4. #34
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    OP is a good example of momentum investment. I do a similar thing with my investment in the AMP Global Shares Index Fund. That fund mirrors the MSCI World Index, so each month I check the 200 DMA and if it sits below the price, I remain in the fund. If the price is below the DMA then I move to cash/bonds. As weíve been in a bull market Iíve only had to swap out a few times, but I get the feeling this may become more frequent with the current economic climate.

    I do this through InvestNow which is free to buy and sell. While you could do it with KiwiSaver, usually the fee to switch eats into potential profits. For example with my current KS provider you get one free switch per financial year and itís $50 thereafter.

    In saying this I have contemplated moving to more secure funds when there are potentially major bear markets or recessions around the corner. Right now my fund is mostly in global equities, but I am considering moving most of it into a defensive fund for a few years. Iíll probably keep my regular payments buying global equities though, just to DCA cheap shares!

    Iíd be interested to know if many other people have this approach with KS or index funds.

  5. #35
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    Quote Originally Posted by lou View Post


    Discl: Superlife Pools;
    25% Cash
    25% NZ Bonds
    25% Overseas Government Bonds
    25% Overseas Bonds
    I would recommend researching into the debt cycle and how credit flows through the global economy. understanding this cycle is one of the best ways to grow wealth as far as I have researched into it. Ray Dalio's Lessons From The Financial Crisis book is a hot topic at the moment as it gives a detailed reason why he believe this debt cycle is the root cause of every Boom and Bust period ever recorded. Take a look at what happened to shares and potentially bonds around 2008, 2000 and again around the early 1990s crash to see what I am talking about.

    Everyone knows you should buy low and sell high. But how does anyone really know when a stock is cheap or expensive. Chasing the larger trends will help grow your investment quickly. Treat your Kiwisaver like a growing snowball of money that you want to protect for the time you retire. Being aggressive at the start of the cycle when the share market is recovering quickly and defensive at the end of it when it has overshot and about to correct. Hence understanding what drives cycles will greatly assist in protecting it. To better understand what i'm talking about watch the following clip https://www.youtube.com/watch?v=7WXidoI9ppw

    My Kiwisaver is with ASB and 100% Cash atm. Waiting for a market correction and then jumping in again to take full advantage. I have a small holding of NZ Shares that I manage myself through ASB that is currently invested in shares in the NZX and ASX.
    Last edited by NeverQuestion; 03-10-2018 at 06:44 PM.

  6. #36
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    I'm with Summer KiwiSaver, really good, 0.9% amf and free switching as many times as I want, 70% intl shares, and 30% NZ shares, good returns over 18% for Intl shares after fees. Their balanced fund is near top returns for last year which for a broking firm is good.
    Stick to the strategy

  7. #37
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    Moved to 100% Conservative with Kiwisaver about a week ago. Looked at the returns in the Milford fund and was around 6% over the last year - no doubt helped by currency.

    Question is whether current turbulence is just a few bumps, or on the way to a bigger correction. But went for capital preservation in the meantime.

  8. #38
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    Rising rates, asset class sell off.

    Quote Originally Posted by Sideshow Bob View Post
    70% intl shares, and 30% NZ
    100% in equities and presumably 100% NZD hedged too, these portfolios will be hit hardest.

    Quote Originally Posted by Sideshow Bob View Post
    100% Conservative
    Do you think that you are safe in bonds?

  9. #39
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    Quote Originally Posted by smpl View Post
    Rising rates, asset class sell off.

    100% in equities and presumably 100% NZD hedged too, these portfolios will be hit hardest.

    Do you think that you are safe in bonds?
    That is the question I have too. Rising interest rates could decimate a bond fund. Or do these funds just buy at par when a bond is issued and hold till maturity and take the interest along the way, ignoring the rise and fall in the actual value of the underlying securities?
    Last edited by blackcap; 14-10-2018 at 05:02 PM.

  10. #40
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    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.

  11. #41
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    Quote Originally Posted by blackcap View Post
    That is the question I have too. Rising interest rates could decimate a bond fund. Or do these funds just buy at par when a bond is issued and hold till maturity and take the interest along the way, ignoring the rise and fall in the actual value of the underlying securities?

    Isn't the unit price of the fund still marked to the current market clearing price of the assets under management? So if you hold a fund with a high exposure to vanilla fixed interest bonds you'll get a capital gain when rates fall and a loss if the rates rise.

  12. #42
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    Quote Originally Posted by blackcap View Post
    That is the question I have too. Rising interest rates could decimate a bond fund. Or do these funds just buy at par when a bond is issued and hold till maturity and take the interest along the way, ignoring the rise and fall in the actual value of the underlying securities?
    AFAIK, because they have money coming in all the time, they have no option but to buy on the secondary market.
    Last edited by GTM 3442; 15-10-2018 at 05:39 AM. Reason: Add important preposition

  13. #43
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    Quote Originally Posted by GTM 3442 View Post
    AFAIK, because they have money coming in all the time, they have no option but to buy on the secondary market.
    Thanks for thee replies. Ok that makes sense. So a conservative "bond" fund can then quite easily suffer capital losses in a time when the discount rate is rising. Interesting.

  14. #44
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    Quote Originally Posted by Baa_Baa View Post
    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.
    I agree in part, however I will adjust portfolio when major changes in market cycles seem apparent, like right now. In saying this I have opted to move funds to defensive positions, but have continued my regular contributions to continue to purchase international equities throughout any downturn.

  15. #45
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    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.
    I have read a lot of this on kiwi saver providers websites. So how much of an opportunity do you loose if your not IN during the downturn?

    My kiwi saver started in early 2008, 100% growth so it's a reasonable ballance. Looking at the new $$$$$ going in for 1 year it's 5% of the current account ballance (excluding fees & tax). That 5% additional buying opportunity does not excite me compared to the potential reduction in my account ballance.

    A switch to conservative looks appealing if you can time the switch, thats the hard bit.

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