My Investment Journey- Since the Beginning

[born2invest]

I may have already said this but you should benchmark your performance against the index. They way you know if you are doing well, can to better, or should just buy index funds.

I was thinking of doing quarterly reviews at the end of March/June/September/December to see the returns I've got and also compare them to the NZX or ASX index so I'll let you know at the end of March how I'm going.

[gv1]

I may have already said this but you should benchmark your performance against the index. They way you know if you are doing well, can to better, or should just buy index funds.

Hi harvey, which ones are good index funds?

[lou]

This is a we bit off topic but I wanted to respond.

I am a little wary of Kiwisaver.

I see it becoming a political football over the next decade or so.

Sadly this will be the case. However kiwisaver is still a great scheme. Hopefully it politicians will strengthen it rather than water it down.

Initially a retirement savings vehicle, it has already been subverted into a mechanism to help raise the deposit for a (first) house. Who knows what the next "tweak" will be? And who by ? And when ?

Possible but this is not necessarily a bad thing. The biggest accoplisment of kiwisaver is an increased saving rate. At least a house is a capital item unlikely to depreciate.

The tax credit has already been halved. When we start getting Kiwisaver millionaires, expect it to be cut again.

In the grand scheme of things the tax credit is not that important.

We then come to the "exit" scenario. There has been some discussion over the past year about what to do on retirement, when member's Kiwisaver funds become available.

I suspect that a few horror stories of people blowing their nest-eggs will be used as evidence of the "need to protect people from using their own money for their own purposes".

I suspect that the fund management industry will lobby hard for withdrawals to be taken as an annuity. The past year has seen the UK print media full of annuity horror stories. Be warned.

The annuity industry will develop in new zealand people start exiting with substantial kiwisaver balances. This will be a free market action rather than a government enforced action.
It will be very difficult for the government to set up a compulsory annuity purchase because of the way kiwisaver has been set up. It is an independent scheme where your funds are held in trust rather than a government pension shceme.
The only logical way I could see the government doing a compulsory annuity would be for them to stipulate the government tax credit portion be used for the annuity purchase.

I suspect that suggestions of a "withdrawal" tax will appear.

I don't see this happening at all. The only way this would happen is if you did not pay tax on your contributions. We currently pay tax on our contributions.

[lou]

Originally Posted by Schrodinger
I know I shouldn't lead the young astray but you should consider getting a margin loan.

Keep it at very conservative gearing levels 40% is a good start. KW has good advice and I would set up separate accounts so you can diversify easier.

Generally if you research enough this will benefit you in the long term.

The most difficult part is when to sell. I have placed a CAGR between 25-30% minimum to make this easier.

Too risky for me. I couldn't sleep at night having a margin loan.

The companies I own and look to buy are generally quite small in market cap and margin lending is only around 30-40% or they don't provide margin lending at all.

This is where technical analysis can really come in to its own. Often people will poop poop TA for not providing additional return over buy & hold but what they don't see is it often offers a better risk adjusted return. ie smaller drawdowns. If you combine this with the judicious use of leverage it can lead to a great return.

[Lizard]

The reason I started this blog was to have a place to log my thoughts without hindsight or outcome bias.

This week for some reason I've been thinking a lot about selling my Supply Network Limited (SNL) shares. The prices I bought at were around the $1.45 on average and now they are up to $2.10 or so which is a P/E of 16 which I think is pretty much full value for SNL, perhaps even a bit over.

I don't know what started the thought in my head to sell them off. Perhaps the downturn in the mining/construction/retail industries sparked me to think that less transport and bus companies would be spending on replacement parts.

However, after studying the annual reports over the past few years, I've come to the informed conclusion that I will continue to hold. The management have concluded that their growth plans have been successful and that they are aiming for 10% plus revenue growth and 10-15% plus profit growth in June 2014 financial year. The half yearly report is out over the next few weeks also which I think will be an ok result for the company.

Seems a bit silly to write my thoughts down but various books I've read have recommended to write down my thoughts at the time they occur so I can look back at them in the future without distorting the information looking back in hindsight a few months in the future.

Any comments are welcome.

I think it is great to have a place to log your thoughts. Briefly, the forum had a section for blogs, but that disappeared again (maybe extra cost?). The forum is a good searchable database for recording thoughts, although it can be frustrating when you try to create a blog on one thread, due to fact that your "blog" and "comments" are not distinguishable.

As for SNL, it is getting close to a figure where I might feel compelled to sell some more to reduce risk. The upside could be a good result out of NZ operations with the improved exchange rate though, so may hang out for the half yearly or any earlier guidance.

[winner69]

Hope you still logging your thoughts mate even if not sharing hem with us

Good practice ...though I gave up years ago