Not my cup of tea, but I am not totally against people who want to put some money on it. But kiwisaver is no place for it. This is just wrong.
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I don't support it either justakiwi.
The previous comments were regarding sharesies offering the option to pick individual shares of for half the kiwisaver balance. My post regarding crypto was simply to highlight the fact picking crypto for your KS is already an option and in my opinion just wrong. Regarding picking individual shares for KS, I haven't looked into to much. But it can potentially can open a can of worms and not recommended for individuals who don't or can't do the due diligence.
I think we have reached a point with kiwisaver that we got comfortable with the rules therefore complacency sneaks in.
Yeah I did realise that. I'm just really surprised it is even possible. I know crypto probably wasn't much of a thing when KiwiSaver first came out, but surely the powers that be added a clause to exclude it as an option? If not, they need to urgently address it now, before this cat gets out of the bag. It's a recipe for disaster.
From Koura's website:
Theoretically, a 3-4% allocation of your growth assets to Bitcoin is sufficient to optimise the risk and return characteristics of your KiwiSaver. With kōura, if you tell us that you would like to invest in cryptocurrencies, we will suggest you allocate 3% of your growth assets to the kōura Carbon Neutral Cryptocurrency Fund. If you do not ask to invest in cryptocurrency, we will not allocate any of your KiwiSaver plan to this fund.
You are able to allocate a maximum of 10% of your KiwiSaver to the Carbon Neutral Cryptocurrency Fund, if you do this, 10% of your current funds will be invested in the fund and 10% of your ongoing contributions will also be invested in the fund, though due to market movements, the actual percentage of your KiwiSaver may grow above this 10% level. You will be rebalanced back to your chosen allocation every 6 months.
Importantly, you need to remember that the more you allocate to our Carbon Neutral Cryptocurrency Fund the riskier your KiwiSaver will be. If you go all the way to the maximum amount of 10% you need to be prepared for a significant amount of volatility in your KiwiSaver. Remember this asset class is expected to fall by over 50% at least every 2 years.
Plenty of stock investing falls into the speculative realm, i wouldn't pass too much value judgement on adding crypto provided that it's appropriately risk managed.
Perhaps you are right we all have different ideas what constitutes an investment and whether it has a place in a kiwisaver fund.
Yep it is hard to argue that some companies do perform the same or if not worst than crypto.
My thought process is that when a person is signing up to kiwisaver, hopefully the person has a long runaway so to speak therefore can take advantage of time. Therefore in my mind there isn't really a need to take excessive risk. Even if the allocation is restricted to 10%. But hey I get, people have different ideas. As you have listed the above, the important disclosure info so that the ks members know what they are signing up for.
Personally, I couldn't care less what other people choose to do with their KiwiSaver, but I am not ok with tax payer funded government contributions going to Kiwisavers that have a crypto component.
I see absolutely no reason for it. If people wish to invest in crypto they can do it outside of KiwiSaver.
Does cryptocurrency actually become less risky overtime? I would rather own tulips for a week than for decades during the dutch tulip mania time-period. Or any sort of speculative bubble for that matter.
That's not to say I don't think people should be able to have crypto as apart of their kiwi saver. In the same way I think free people should be allowed to gamble their savings in a casino, but I'll still pass judgement onto those people
Just to clarify I didn't say crypto becomes less risky overtime. I don't know the nature of it, but I suspect not.
Everyone has a right to use their money in whatever way that they wish. I don't pass judgement either. TBH I don't really give a toot what the next person does or do. Each to their own.
This is my opinion only. The concern or risk is when people get a false sense of security when they see other people doing it and the rules become more laxed. To me that's the real danger.
Getting back to Sharesies. I had a response to a couple of questions I asked re the new Savings Account product.
Transfer times are not the best given that one has to first transfer funds into their wallet, wait for that to be processed, then transfer to their Savings Account.
If transfers are made before 4pm, they will clear into the Save account the following day. This is the same timeframe for withdrawing from Save back to your Wallet. Banking with ASB won't help processing times in regards to Wallet > Save.
You also asked about a Save number, Investors don't have a Save account number, so we're not able to advise on that one.
I also find it very interesting that Savings Accounts are not allocated a bank account number - which means we cannot transfer funds directly from one of our own external bank accounts. That is a deal breaker for me. Interest rate is not competitive enough to sacrifice the ability to do that.
great news about sharesies kiwisaver scheme ... wow i mean being able to invest my own money in the companies i choose :t_up: im a starter as long as the fees i not rediculous like the craigs one which is on offer , i mean there one is a road to the poor house with there fee setup for picking your own shares.
if i do join i will be the first kiwisaver cross fingers but on my previous track record of buying and selling regularly i should turn it literally into millions. be the first person to get rich in kiwisaver cause i cant see how you can with the other lot
sharesies probably want to write a story about my performance one day i imagine .... if i join
I think you are are the exception to the rule. For the majority I can only think of future pain. This comment is not targeted at the ST community by any means. It applies to kiwisaver members in general.
You only have to look at the personalfinance thread on Reddit. People asking what individual shares to pick. That saids it all.
As Bull has stated;
'The important thing to me is i know and can prove' (that he's beaten the market)
So having made that statement, by definition you must know what your returns have been.
The S&P 500 (what all professionals and serious investors call 'the market' and measure returns against) has the following total returns;
2013 32.29%
2014 13.69%
2015 1.38%
2016 11.96%
2017 21.83%
2018 -4.38%
2019 31.49%
2020 18.40%
2021 28.71%
2022 -18.11%
The CAGR over that time with dividends reinvested was 12.4%
What have your returns been over this period, either a CAGR for the period or preferably year by year. As above, you have this information and can easily provide it.
You must include all cash in your results. I.e. you can't have a year where you're 90% cash while the market rips 30% and you only compare your equity portion that year. It's everything every year.
Super easy to provide. You are anonymous here so nothing to worry about.
If you have chosen another market to measure yourself against, that's fine we can use that instead.
always risk in investing as long as people know the risks thats all that matters
in aus self super seems quite successful for a lot of people
eg i just took one kiwisaver but there all similar .... can you do better than there performance ?
10 yrs Cash 2.30% Conservative 3.78% Balanced 6.20% Growth 8.55%
I only started investing seriously in shares in the last couple of years . Precovid I made positive returns but never actually tracked them properly and it was a much smaller proportion of nw(still is) Last year was luck and precovid I don't know if it beat the index consistently. I like to consider to myself as still having training wheels on.
My concerns is for the less informed. Potentially it can have a unintended consequence. The subgroup between 20to40s that are perhaps need KS for a deposit on a house and final retirement balance at the end. Anyway of this you won't hear more from me about this. I'm sure everyone is sick of it haha.
This is good news indeed. I am patiently waiting to convert my 100% cash fund to individual companies. Let us expect some further good news from sharesies like competitive(reasonable) fees and other investment friendly decisions. I believe Simplify also may offer similar Kiwi saver like this. Only problem is we hardly find any value stocks in the market. Unless I see value I won’t pick any individual stocks in the market right now.
Dude, you have got to get with the programme.
Why don't you do some serious analysis instead of looking at headline S&P500 figures.
What is the current valuation of the S&P475? The smallest 475 companies in the SP500? What about the next 1000 under the SP500? What about small cap value? What about international?
Hell, what about individual companies???
This is the most bifurcated market you will ever see.
There are massive swarths of the market trading at well below March 2020 Covid levels and even below GFC, this is a value stock pickers dream, you will get opportunities like this a few times in your life.
Many of the best value fund managers are trading cheaper than any level in 25 years aside from GFC 666 low and Covid bottom. They had the cheapest start to the year in a quarter century.
Look at Bloomstrans whole portfolio, look at Berkshire trading at 12 times earning for christs sake, Look at emerging markets, look at the UK....
There is utter destruction under the hood of the big headline indexes you just need to open your eyes.
Hundreds of companies in the S&P500 have had a decade wiped of their share prices. Let alone under the SP500.
It is pure heaven out there for a value investor. Everything is on sale.
Do some real work instead of posting some crap about the market.
Read 40 to 50 of the Q1 fund letters from people who been doing this for decades and see what they are seeing and saying.
This is when you get rich.
think you have gone off track again. we are talking about being able to do better than kiwisaver fund managers with the new do it your self kiwisaver sharesie might provide.
so could you do better than those kiwisaver returns i posted over the say 10yr period. here they are again if you missed it
10 yrs Cash 2.30% Conservative 3.78% Balanced 6.20% Growth 8.55%
10 yrs Cash 2.30% Conservative 3.78% Balanced 6.20% Growth 8.55%
Question Bull, is growth 100% share allocation.
I always got the impression high growth KS funds was near 100% allocation say around 95%.
Edit: fyi for
NZX50 10 year return 11.23%
https://www.spglobal.com/spdji/en/indices/equity/sp-nzx-50-index/#overview
i wouldnt know on every single one but probably mainly stocks with some cash probably.
I dont know why a benchmark is relevant myself as your comparing if you could do better than the fund managers but if you did use the one you provided obviously they have all mostly under performed
as an example conservative fund ( apparently which most people are in ) i reckon i could make one up of stable nz utility type companies with good reliable dividends and a mix of term deposit stuff ( can you do term deposits thru sharsies ? ) which would easily outperform 4% per yr in income from kiwisaver funds
I guess it'a about comparing apples with apples.
If strictly investing in shares, the index is considered to the benchmark as it is 100% shares. With the different types of funds, you get varying degrees of allocation i.e cash, bonds, shares etc.
For myself I invest strictly in shares so it would be a unfair comparison to compare to the growth fund as I know there is an allocation to bonds.
I don't know what the exact allocation breakdown is for a conservative fund. This also over a 10 year period, interest rates have changed over this period. It would be great to earn in the long run a term deposit rate of 5-6% if the inflation rate was set always at say 2%. Thats why Im perplexed why people put money in term deposit for the long term, when in nature it is below or in line with the inflation figure. The real return is negligible.
We are getting very off topic here, so it might be good to start a new thread, but in the meantime - providers generally provide that info. Here are a couple of screenshots for the Simplicity Growth (first screenshot), and their new High Growth fund. The next two are Conservative and Defensive
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I think this discussion is really interesting, and valuable, but it is taking this thread off-topic, so if anyone wishes to continue the conversation, I've started a new thread here:
https://www.sharetrader.co.nz/showthread.php?12650-Kiwisaver-general-discussion&p=1002206&viewfull=1#post1002206
At Sharsies, we are always on the lookout for investors who exemplify the power of long-term investing. Today, we want to shine the spotlight on one of our star investors, whom we affectionately call "Bull."
Bull is an animal who has been investing with Sharsies for the past 10 years. He started small, investing just $1,000 in a mix of exchange-traded funds (ETFs) and individual stocks. But over time, he has continued to add to his portfolio, taking advantage of the power of compounding to grow his wealth.
And grow his wealth he has! Today, Bull's portfolio has returned an impressive 15% per year on average, outperforming the broader market by a wide margin. His success can be attributed to his disciplined approach to investing, his focus on long-term trends, and his willingness to hold on to his investments through market ups and downs.
Bull's portfolio is a mix of stocks and ETFs that he believes will benefit from long-term trends like the growth of e-commerce, the rise of renewable energy, and the aging of the global population. He doesn't try to time the market or chase the latest hot stock. Instead, he takes a patient, long-term approach, and trusts that his investments will pay off over time.
We are thrilled to have Bull as a part of the Sharsies community, and we hope that his success will inspire others to take a disciplined approach to investing for their own retirement. After all, as Bull has shown us, the key to success is not just picking the right stocks, but sticking with your investments for the long haul.
Great points SR. Now is the time to start looking for bargains.
Perhaps to posters who are keen on value investing. The following is the link to Seth Klarman's classic, margin of safety as a pdf.
http://library.lol/main/E5C796C4A382...C7498C6A904E10
- click get.
If you want to get your hands on a limited copy, it's about $1,500 USD. He did a limited run.
hey sailor you didnt awnswer my qestion about do you think this service is good for the average person to construct there own portfolio and do you think they could do better than most kiwisaver managers and by the way can you construct a portfolio to better there return ( we are not talking about sp returns ) only manager returns so dont go off -track
No, I think it will destroy the average investor and there is no way they will be able to construct a better portfolio. The average investor is lucky to do 2% over the long term.
I think the service is a good idea from a choice perspective but having that choice will not be good for most punters. Like having the choice to smoke ciggies...
I was forced into Kiwisaver and used Craigs as I can pick stocks for myself and went 100% BRK, since doing so have destroyed every single kiwisaver fund in existence and will continue to do so, if fees are lower in Sharsies I will swap.
To answer your question, just look at Sharsies retail stats and see what people were buying and when, everyone will try to time the market and buy the latest hot thing and kill their retirement fund.
To think the average investor can pick stocks and outperform the profession managers is ridiculous, but they could all outperform if they just indexed.
Will be virtually impossible to get 8.5% from the index over the next 10 years unless inflation is high and persistent.
I think perhaps you are dramatically underestimating how hopeless the average investor is.
Do I think that BaaBaa or Maverick could use the service to pick their own stocks and outperform the managers, yes absolutely.
self super in aus has been quite sucessful i read somewhere 26% roughly of the total pool is self managed and across all age brackets the participation and just like the markets there are winners and losers as far as people doing better i have not seen any research on overall if people do better. havnt read any reports eithier of people totally blowing up either there super
craig's lol only works for you cause you dont buy and sell all the time otherwise the fee's would destroy your account
i dont believe ba ba or mav can beat those figure's
Successful for who? You're just taking about number of participants. That means nothing.
Agree, craigs is awful but my only option at present.
You don't believe Mav or BaaBaa can beat 8.5% over the next few years? What leads you to these beliefs? Do you believe I can?
what's the difference in fee's your pay with craigs vrs sharsies if you only brought 100 % berkshire
actually you cant buy 100% berkshire thru sharsies only 5% of your 50%
50% base fund and 50% allocation to stocks with only 5% max in each stock
there fee structure looks expensive based on the above rules at first glance if you want to trade but ill dig deeper when ive more time see if it stacks up
"You’ll be able to invest up to half of your KiwiSaver balance in your own picks, to a max of 5% in each investment. At least half of your balance will need to be invested in the base fund you choose."
and
"To start with, you’ll be able to pick from some of the most actively-traded companies and ETFs listed on the NZX—with US shares on the way!"
So not currently possible to do what Sailor Rob has done via Craigs.
A bit simplistic - 50% return for the 1st time but year 2 the return is $512 on $2048 (2 lots of the $1024 (or even $2560 (2x1024 + the Govt contribution last year))) and it diminishes from there.
Returns on portfolios are usually over the portfolio, not what you just put in this year.
Not it's not, it's $512 every year, on a deposit of $1024 every year, this is not complicated portfolio theory here, it's just simple maths.
Year 1 - deposit $1024, get $512 from the government = 50%
Year 2 - deposit $1024, get $512 from the government = 50%
Year 3 - deposit $1024, get $512 from the government = 50%
.
.
.
Every year, get 50% return on your deposit. One day, withdraw 100% of your deposits and all of the governments' 50%'s, not counting gains or fees.
I wouldn't use Kiwisaver for anything else, except getting 50% each year return on my deposits.
Where dat SuperHero rumoured to be coming to rescue all those badly Scaresied , ignored and Fee fleeced ? ;)
Ok, so feeling a bit thick here, seems I might have missed something and didn't understand Dobby's reply. To my mind, if I bank $1 and the government gives me $0.50c, every year, then I made a 50% return. Then if I do it the year after, and the year after that, I still am getting 50% every year. When I withdraw all my money, I get everything I deposited back, plus 50% that the government gave me. To me it's not an 'investment' or a portfolio, it's just a bank account that I can't withdraw from, until I can, that gives me back all my money and 50% more than I paid into it. (not including gains on the account or fees). So let's say I deposited 10 years of $1 and got $0.50c every year from the government, that's a total of $15 I can withdraw, for the $10 I deposited, so that's 50% gain.
Can you show me the maths that I can understand why my logic is wrong?
I am patiently waiting until I see major correction in stocks that I like to convert my 100% kiwi saver.Margin of safety is very important to me. I think I can do this through Craig or Sharesies. In case of Craig, we can pick only stocks in their list. I would rather like to pick companies I like. So, Sharesies may be best option for my kiwi-saver. My main aim is making use of Kiwisaver funds to pay off mortgage.
I believe the confusion lies in the difference between total gain, and p.a gain. In your scenario your total gain is always going to 50% of the portfolio, but the p.a gain is going to be lower and lower each year. Using your example, in your tenth year you gain $0.5 whilst your kiwisaver is worth $15 which is a 3.4% gain.
Yes.Currently, protection of capital is more important than capital gain for me. I am expecting major market correction after one of the longest bull markets in the history. Fortuantley, I didn’t get caught to paying very high price(Crazy value) for my first home. Asset prices have so stretched I can’t think about converting my cash fund at this juncture.
I get what you were saying but it isn’t a bank account. It’s a portfolio so it’s going to go up and down in value over the years. There is no guarantee you will get back what you put in (even though we know you probably will over the long term) - the value of your portfolio could be less or more when you want to withdraw it. Having said that, in any given year you are right - you put in the minimum amount and get the full govt contribution, which is a 50% return on your one annual deposit. But that doesn’t really translate to your overall return over time, when you decide to withdraw it.
Or maybe I am just as confused as you now :confused:
OK, that's interesting, so if you extrapolate that logic out to 20, 30, 40 years, your p.a. gain is bascially nothing. (can you please show the maths?).
I would contend that it is not a portfolio strategy, is is just pure returns on deposits, which every year returned 50% on deposits and at the end yielded 50% on all deposits made.
I'd really like to see the maths that says I put in $1k but withdrew $1.5k (one day) wasn't a 50% ROI.
Let's recap for a moment, I'm not saying KS is an investment, all I'm saying is that if you put in the absolute minimum amount, every year, the government will put in your account 50% of your deposit. How can that not be a 50% gain every year and 50% total when you withdraw your money, plus the governments money?
My scenario was based on a 100% cash position (not a portfolio view, which is why I said like a bank account), which you will always get back, cash is cash. Just put in the $1024 every year and the government pays you 50% $512.
The cash account might make a few bucks on interest or lose a few on fees, but it's just an illustration of leveraging the government incentive, of $512 (for free) for your $1,024 every year invested.
Sure. Using the same scenerio of $1 deposit and 50c govt contribution yearly. At year 50, your total portfolio is worth $74.5 before the govt contribution (gain) of $0.5. So therefore your gain as a percentage of your portfolio for that year would be 0.5/74.5, which is a return of 0.67%.
Your return for that given year is 0.67%, but your total return is still 50%.
There is a difference between a annual return and total return (which is your ROI)
This is what I don't get. The SUM of the deposits, is contributions (deposits) of $1024 every year, PLUS, $512 government (deposits) every year. Total gains = govt deposits / your personal deposits = 50%
Show me the maths, I need to know why 50% free money from the government .. every year, isn't a good way to make money over the long term.
I've been around a while but you lost me there, do you have a spreadsheet that shows that?
I'm thinking annual return by your definition is irrelevant in this case, vs total return which is real money coming your way. You get 50% of your minimum deposit, every year (free), just by making the minimum deposit. And, you'll get to keep it when you're allowed to withdraw.
Annual return, by those calculations seem somewhat irrelevant. In real money, the government will give you 50% of the minimum money you need to invest in KS to get their money.
In any event, I think we're agreeing absolute, total return, is 50%. It must be, the government gives me 50% of my minimum deposit every year, I can withdraw that some day. Free money, half of what I deposited.
Doesn't this make it the best and safest investment of anything, anywhere, ever? It might not be a lot of money, but its easy money and government guaranteed.
Absolutely it's a very good and safe investment, and yes looking at annual return as a percentage of your portfolio in this case is definitely irrelevant since your return isn't based on the size of your portfolio. The point of my reply was to show why dobby41 and you disagreed about the return, since you guys were looking at different ways of calculating return.
Anyway I made a spreadsheet https://docs.google.com/spreadsheets...it?usp=sharing
edit: Just realised the kiwisaver govt contribution is $521.43 and not $512, but the %'s remain the same regardless
Arguing over semantics.
Valuenz knows what's going on, read their explanations.
Maybe another way to think about it is ask how you could get a better return on your $1000 than doing what Baa_Baa suggests.
What I find incredible is that "as many as 1,862,000 didn’t contribute at all in the year to 31 March 2022 (compared to 1,483,000 the year before);" That's a lot of free money left on the table!
5 expert KiwiSaver savings tips for 2023
3. Make sure you don’t miss out on the extra $500 from the government!
Every year KiwiSaver account owners between 18 and 65 years can get an extra $521.43 from the government. To be eligible, you need to make sure you contribute at least $1,042.86 to your KiwiSaver account between July 1 and June 30 every year.
I would hope that the Sharsies Kiwisavers at least get their annual free money.
Then don't put your money in KS. Invest separately until you are eligible.
Edit: the only real incentive to invest in KS is because you get the employer and govt contributions. Otherwise why have your money locked until 65.
Without these incentives you can invest outside KS and do as you wish with your money.
Yes of course you should accept the government contributions if eligible. It's a no brainer. All I'm saying is that the 1.8m figure not contributing to their KS would be concerning if they were all eligible. But they wont all be eligible, and that 1.8m is misleading because there are going to be alot of children and over 65 made up of that.
It was $1000
You are missing the point. My response was to your comment: "Then don't put your money in KS. Invest separately until you are eligible."
Whether you are interested or not is irrelevant. Many parents set accounts up for the kids purely to take advantage of the free $1000. Which is one reason why there are now a significant number of accounts doing nothing, until those kids turn 18.
Your attitude is now bordering on rudeness, so take a chill pill and don't be so arrogant.
Great work.
Have you made a spreadsheet calculating compounded returns, say from what you have now, adding 15k a year until you're 25, while compounding at 10%.
Then from 25 to 30 adding 25k a year also compounding at 10%, then 30 to 40 adding 50k a year... etc...
Can build a few different assumptions in there.