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  1. #81
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    Quote Originally Posted by Valuegrowth View Post
    As you suggest, balanced or growth seems to be good option.
    I was suggesting cash is a good option right now. Balanced or Growth sometime in the future.

  2. #82
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    Quote Originally Posted by Aaron View Post
    I was suggesting cash is a good option right now. Balanced or Growth sometime in the future.
    Cash is a horrible option if you intend to invest / lock it in for 1 or 2 years. As Warren Buffet said, 'why would anyone lend cash ; such as buying gov't bonds, that return only 1 - 2 % when annual inflation is more than 2%?

    We're going to see a lot of 'quantitative easing' meaning, the NZ reserve bank is going to print money like hell (no different to other gov'ts abroad). The unfortunate problem with NZ is we can't print our way out of debt. Our NZ currency exchange rate will take a massive hit over the coming years and this leads to higher prices on imported goods.

    The NZ tax system is a joke. Consider the negative returns of this financial year and if the funds are invested abroad, they're are wacked with FIF / FDR on the entire managed fund balance. Don't forget, management fee takes a cut.

    Why pay RWT on interest income ? It's a for sure way of not beating inflation.

  3. #83
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    Quote Originally Posted by SBQ View Post
    Cash is a horrible option if you intend to invest / lock it in for 1 or 2 years. As Warren Buffet said, 'why would anyone lend cash ; such as buying gov't bonds, that return only 1 - 2 % when annual inflation is more than 2%?
    If you lock it in for one or two years wouldn't that be fixed interest rather than cash which is available at a moments notice. Agreed most of what is being done QE etc is to destroy cash and make debt affordable. I would hazard a guess that possibly we are in for a brief period of deflation in asset prices, if the market went down a further 5% this week while you got 0% in cash you would be better off in cash. Time will tell.

    The big question would be when is the best time to switch out of cash which we all agree is a good idea.

  4. #84
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    Quote Originally Posted by Aaron View Post
    I was suggesting cash is a good option right now. Balanced or Growth sometime in the future.
    I won't comment on the pros and cons thereof but I would suggest that this is one of the factors contributing to the wild swings, mainly down, in the current market, ie, the pressure on Kiwisaver providers to sell stock on behalf of account holders who decide to move to cash.

  5. #85
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    Quote Originally Posted by macduffy View Post
    I won't comment on the pros and cons thereof but I would suggest that this is one of the factors contributing to the wild swings, mainly down, in the current market, ie, the pressure on Kiwisaver providers to sell stock on behalf of account holders who decide to move to cash.
    My understanding was Mr valuegrowth had been in a cashfund since 2010 (and would have missed out on the bull run) and was considering moving to a balanced or growth fund. Sometimes being a contrarian can work so if he waited until the other Kiwisavers, have moved to cash it might provide a better entry point. I am hopeless at market timing but it doesn't stop me from trying. I am not suggesting a jump from a growth or balanced portfolio to conservative as he is already in cash, but a bit more patience to see if shares continue down before switching from cash to balanced or growth.

    The original question was "My Kiwisaver started in early 2010. 100% cash fund. I feel like I should adjust my kiwisaver now. Is it wise to keep 100% cash? Are there any risks?Thanks in advance."

    The biggest risk in cash to me is a debt or currency crisis as company defaults could bring down the banks and the banks give depositors a haircut to get themselves out of the s**t. Or central bank money printing leads to a loss of faith in currencies.
    Last edited by Aaron; 23-03-2020 at 09:14 AM.

  6. #86
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    If I am reading my watchlist correctly so far today cash seems like the best option. Not sure what tomorrow will bring.

  7. #87
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    The biggest risk in cash to me is a debt or currency crisis as company defaults could bring down the banks and the banks give depositors a haircut to get themselves out of the s**t. Or central bank money printing leads to a loss of faith in currencies.
    If banks give depositors a haircut, will if affect my kiwi saver too?

    If it is so,I would go for balance fund/growth fund where I can have both cash and shares. Second option is I would put all my eggs in stocks after doing some research. My period for keeping stocks would be about 7 years.

  8. #88
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    Quote Originally Posted by Aaron View Post
    If you lock it in for one or two years wouldn't that be fixed interest rather than cash which is available at a moments notice. Agreed most of what is being done QE etc is to destroy cash and make debt affordable. I would hazard a guess that possibly we are in for a brief period of deflation in asset prices, if the market went down a further 5% this week while you got 0% in cash you would be better off in cash. Time will tell.

    The big question would be when is the best time to switch out of cash which we all agree is a good idea.
    People that hold cash typically lock it into interest bearing deposits or bonds. This is no different to the silly Kiwi Saver fund options between Conservative to Aggressive where the amount of return on the fund (and risk level) is based on the proportion of the investment held in equities and the rest held in interest bearing bonds or cash. (ie. 60/40 80/20 ratios). and I tell you, these fund managers don't have a plan on investing, they take the income streams day after day and just buy an ETF and the rest to some cash/bond fixed interest return. They won't operate a managed fund like hedge funds do or like Berkshire Hathaway would where the cash says in liquid form and buy in times of crisis. As I mentioned before, what point is earning 1 or 2% a year when the gains are far more by buying at the right time.

  9. #89
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    Quote Originally Posted by Aaron View Post
    My understanding was Mr valuegrowth had been in a cashfund since 2010 (and would have missed out on the bull run) and was considering moving to a balanced or growth fund. Sometimes being a contrarian can work so if he waited until the other Kiwisavers, have moved to cash it might provide a better entry point. I am hopeless at market timing but it doesn't stop me from trying. I am not suggesting a jump from a growth or balanced portfolio to conservative as he is already in cash, but a bit more patience to see if shares continue down before switching from cash to balanced or growth.

    The original question was "My Kiwisaver started in early 2010. 100% cash fund. I feel like I should adjust my kiwisaver now. Is it wise to keep 100% cash? Are there any risks?Thanks in advance."

    The biggest risk in cash to me is a debt or currency crisis as company defaults could bring down the banks and the banks give depositors a haircut to get themselves out of the s**t. Or central bank money printing leads to a loss of faith in currencies.
    If you're going to hold cash, hold it in USD currency because it will provide the best option to invest into shares. I don't have confidence that the NZX will rebound as fast as US listings as over there, it's the bigger fish that eats the little fish. In NZ, the fish just die and no one would come along to eat it.

    If Valuegrowth is asking what to do with the cash, it may not be to his discretion on how it's invested at the Kiwi Fund mgt level. If he chooses to change the ratio from moving more of the cash into holding more equities, that would all entirely depend on what shares are they investing in? Do you choose NZX listings or overseas ones?

    Don't forget, cash is ONLY king when you're planning to seize opportunties and as what I said before, Kiwi Saver funds don't know how to allocate cash to take advantage of a stock market crash; they simply let the individual to DECIDE where to put the funds to in the form of 3 basic risk levels.

  10. #90
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    Quote Originally Posted by lou View Post
    Can you have a kiwisaver strategy?

    My Idea is to sign up with the growth "smartkiwi" kiwisaver fund. Their aggressive fund invests in the smartFONZ and smartMOZY; these funds invest into the companies listed in the NZX 50 Index and the S&P Australian 50 MidCap Index.

    I will then track the 200 day moving average for the two indices. Once the index price for the crosses the 200 day MA and starts trending down I ring up smartshares and get them to switch me to the conservative fund. The conservative fund is 80% fixed interest and 20% equity.

    Once the indices cross back over the 200 day MA and starts trending back up I ring up smartshares and get them to switch me back to the growth fund.

    What do you guys think of this strategy?
    Is it a worth while strategy?
    Would you guys suggest anything different?
    One thing I am unsure of is the split that smartkiwi invests in the NZX50 & ASXMC50? Does anyone know this?
    Any ideas to improve this strategy or something similar?
    Very interested to know if OP ever went through with his KS strategy. This is a form of momentum investment which I have wondered about myself recently.

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