Well said. Unfortunately a lot of people here forget that some of us are new to this and don't have the skill or confidence to pick our own stocks. ETFs are great for people getting started.
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Well said. Unfortunately a lot of people here forget that some of us are new to this and don't have the skill or confidence to pick our own stocks. ETFs are great for people getting started.
I feel like I'm being attacked here lol
Peat, i agree, looks expensive at the moment, but good companies. Hence I think I suggested a buy the lows approach with the comment in brackets on POT.
Jak, yup, ETFs might take the pressure off, but it's important to know the alternative. I think the OP mentioned confidence with AIA and seemed set on buying that, so i suggested a strategy that can derisk with diversity and still be able to get a chunk of AIA in there. I also gave imo some good stocks to add to his watch list for a long term hold as per the parameters of his post as I understood them. Ultimately he will buy what he's comfortable with, and hopefully do well.
I think it's good to have different perspectives presented because it helps learning, but Im done defending my posts, so I'll butt out of this thread because i seem to have an unwelcome polarising view.
Im off to top up my wine. Happy Friday all :)
PS: The are other options for investing that can add some diversity, such as squirrel p2p which has some guarantees, etc. And better than the bank roi.
Yes I agree with you. But I think ETFs are a good way for beginners to get started. As one gains knowledge, understanding and confidence it is then less daunting to Branch out into individual companies. Depending on how much one has to invest, they are also an ideal way to get instant diversity, which takes much more time and money when picking your own.
I have some term deposits maturing soon, and am a little stuck about what to do with the cash. Do not want anymore in the NZ market as feel it very overvalued, and already have enough exposure to it.
What would be a decent smartshare to park some money in? Preferably one that has nothing to do with NZ or Australia as want to diversify away from this region.
How does Smartshares or others like Sharesies get around IRD's FIF rule where if your portfolio exceeds $50K if (foreign stock holdings), then FIF kicks in. Does Smartshares automatically deduct the maximum 5% FIF tax with-holding in a year if the portfolio gains exceed that? Or by 'comparative analysis method' take ie 3% if your paper gains was only 3% ? Because for any long term retirement planning $50K is not a lot of $ and when you invest for the long term, in 20 or 50 years time, inflation would of gone up and that $50K portfolio would buy a lot less.
I think all NZ based international equity managed funds and ETFs are subject to the FIF rules. It's hard to get around the them - that's the point of rules! However, paying tax on investments is just part of the deal. If you go the DIY route, buy a few offshore shares through a broker and keep your overseas holdings below $50k you'll get way less diversification, spend a lot more time and effort and pay FAR more in brokerage, forex and custody costs than the extra FIF tax will cost you. FIF tax in a PIE structure is max. 1.4% (28% of 5%). All Smartshares ETFs are PIEs.
I think of it this way: if I was earning $60K p.a. and someone offered me a job earning $90K p.a., would I refuse the job because that means paying more tax? Of course not, because I'd still make a lot more after tax.
I invest in offshore ETFs because they give me broad diversification in a single trade (with no commission if I go direct to Smartshares). I'm also investing in offshore ETFs because I expect to get better long term returns after tax than I'll get from NZ equities in the next few years, so I don't worry about the tax.