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1487 posts

Uber Geek
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Topic # 115284 20-Mar-2013 12:46
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Have a naive question.  Kiwisaver is a fund management which you can only select your risk level.  They say that if you have many yrs to go you should select more risk.  However, couldn't you just change the risk of your portfolio to minimise them?  Like going from growth to conservative and back to balance/growth instead of just staying in growth for so many yrs.  Or am I missing something fundamental. 

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447 posts

Ultimate Geek
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  Reply # 784396 20-Mar-2013 12:58
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I think what they mean is the high risk will over long period of time give higher returns, but more risky so it will have a lot of negative growth dips as well as the highs. So over a 20yr period the positives should out way the negatives, however if it's over 2 bad years then you'd have negative growth.


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Ultimate Geek
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  Reply # 784401 20-Mar-2013 13:03
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Oh, and the second part. I think you can change the risk level any time within reason. Lowering the risk as the economy starts to slow? or when you need more stability?

103 posts

Master Geek
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  Reply # 784476 20-Mar-2013 14:13
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I'm with 'strangle the damn feral cats' Gareth Morgan Investments.
They gave me the option of splitting my Kiwisaver around, so I have something like 70% of my fund in shares, 20% in property (I think), and 10% sitting some kind of bank fund.

I'm only 27 so time isn't really a factor for me, however I didn't want to lump it all with the same risk factor.

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  Reply # 784490 20-Mar-2013 14:33
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To the OP, when they talk about Risk, what they are actually talking about is the type of assets they invest your money in. 
Shares are seen as high risk, property medium, bonds and cash lower risk, 

To be honest it is all a bit of a crap shoot anyway, while shares may be seen as high risk, there is a huge risk difference between owning shares in something like Xero/Facebook etc  or Contact Energy/Chorus/ Johnson and Johnson.

Also within property, owning a building in queen street Auckland is probably a lower risk ( easier to get tenants)  than a building in Hastings or Napier.

ditto for Bonds...



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Ultimate Geek
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  Reply # 784492 20-Mar-2013 14:35
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Cambo: I'm with 'strangle the damn feral cats' Gareth Morgan Investments.
They gave me the option of splitting my Kiwisaver around, so I have something like 70% of my fund in shares, 20% in property (I think), and 10% sitting some kind of bank fund.

I'm only 27 so time isn't really a factor for me, however I didn't want to lump it all with the same risk factor.


So you are with 2 types Kiwisaver, saving the Kiwis from those damn feral cats.

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Ultimate Geek
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  Reply # 784501 20-Mar-2013 14:43

Im on the high risk one as well.

My thinking is the people that handle the money would have some sense with my money so I don't lose it. But its good that you can change it if you see that your losing money etc I guess.

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  Reply # 784503 20-Mar-2013 14:45
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I believe you can change plans or providers easily.




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103 posts

Master Geek
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  Reply # 784505 20-Mar-2013 14:46
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My thinking is the people that handle the money would have some sense with my money so I don't lose it. But its good that you can change it if you see that your losing money etc I guess.


Yeah, pretty much.
I like how I can decide how the provider invests/grows my fund, but I leave the details for them.
I've always wanted to get involved in investing, and I think this is a far more interesting way of going about it than letting the whole fund sit in a bank account all my life.

GMI are pretty good, as they give you monthly updates as to how your fund is performing - the last few months mine grew a few % higher than average.

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Master Geek
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  Reply # 784518 20-Mar-2013 15:03
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I'm also with GMI and agree it is great with it's flexible options and monthly reporting.
GM himself sold it to kiwibank, but his name (and face!) are still on it.
I was going to go with risky, being younger too. But then I realised I will likely want to use the option to draw from it for a house in a few years. This means that I am actually short term investing, so I need to go less risky to make sure I'm not in a downturn when I need to withdraw. Of course I could potentially miss out on a higher upturn, but that's the nature of (non)risk.

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Ultimate Geek
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  Reply # 784541 20-Mar-2013 15:40
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@Cambo. I'm nearly 40. The old people were right: you should have started saving at 18.

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Master Geek
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  Reply # 784548 20-Mar-2013 15:50
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gundar: @Cambo. I'm nearly 40. The old people were right: you should have started saving at 18.


Yeah, I was raised by the state so I left the foster home at 18 and found out that I had to get a job, manage finances, get a drivers license etc.
I had no financial knowledge at all, and had to learn by copping some debt and by making mistakes!

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