Posts by Stephen Judd
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Far out Steve. I will never ever complain about my summer holiday being stink again.
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"Given the size of the budget they have to play with, how the hell do they get it so wrong so often?"
At the risk of never working in this town again, my observation is that their enormous monopoly profits meant that most cockups don't rate. Said monopoly means that they suffer from the same problems as any other large institution, but have less incentive to deal with them. Notice that cockups in the more independently-managed mobile business are rather fewer.
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PS: to clarify, I don't think you've been unwise, I think you've been unlucky
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So what's your return now? Are you ahead or behind? How far back was "a few years?"
Kingfisher and Barramundi are both less than 2 years old - hardly enough time to assess a long-term return.
If you look at the 10 year return for the NZX50 it's done quite nicely even if your end point is yesterday. And unlike a house with a mortgage, you wouldn't have been leveraged to get into it; you wouldn't have had dodgy tenants to deal with; you would have had no running costs like rates or insurance; and you could sell at minimal cost on any business day.
At least, the preceding sums up all the reasons I like shares, but your priorities may be different.
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Self-invested funds are a dumb idea. People would either spend the money on a house, fuelling house price inflation, or throw it into some fraudulent scheme.
Rich: I think the Aussies are a little more rigorous than that in defining what you can do - you certainly can't claim that your house is your super fund. Your point is taken though, paternalistic though it is. And I too would be happy with access to the Cullen fund as well...
Danyl: I have a high-interest account with Kiwibank. You only get the bonus interest if you make no withdrawals in the month. The command in online banking is carefully hidden in the interface so you can't easily withdraw from it. So get one of them, set up an AP that automatically transfers money into it timed for your payday, and Bob's your uncle.
Alternatively, I can manage your affairs and give you pocket money for a surprisingly modest fee.
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In that case Gareth, I'd like the same tax treatment for my individual share portfolio.
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Danyl - what Ben said.
But also, have a look at NZX's SmartShares products, which are effectively index funds. The initial contribution is $1500, but you can put in a monthly contribution of as little as $50 without brokerage once you have bought in. They only cover NZX and ASX indexes though.
There are in fact a couple of Kiwisaver index funds, so another angle is choosing one of them as your Kiwisaver provider.
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Ben: trading for gain is pretty simple really. It means buying and selling with the intention of making a profit frin the sale. As opposed to buying for the intention of enjoying dividend income. Same deal with houses: if you buy so you can get rental income you're sweet, if you bought so you could flip at a profit, in theory your gain is taxable.
The hard part is measuring people's intent. In houses, especially, the IRD hasn't really done much to enforce this rule. Informally, for shares, they've indicated that trading much beyond a half dozen times a year is a sign you're a trader for gain.
re managed funds: I understand what you mean. However, "managed fund" and "index fund" have pretty well-established meanings. It would be nice if "index fund" had a more accurate name, I agree.
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Yes, it would be better to give money to people who a) can use it and b) will spend it than to reward the finance sector for its unwise practices by bailing it out, which it what Bush wants to do.
It really doesn't matter what the problem of the day is, the Bush solution is tax cuts for the rich.
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Ben, here's my understanding.
Note that by "managed fund" I mean one that does not merely follow the index, but actively selects stocks.
Under the old regime, index funds did not pay tax on capital gains, because they were not trading for income. (NZ doesn't have capital gains tax, remember; just tax on income). Managed funds did pay tax on capital gains, because they were deemed to be trading for income.
This upset the managed funds people.
Now, I could see that it might be fairer to allow managed funds to have a lower tax regime if they were genuinely not trading for gain. This would put managed funds on the same plane as personal investors and index funds.
But instead, PIE funds now pay no tax on capital gains in NZ or Australian shares no matter how they are managed. In other words, I personally would pay income tax if I traded shares for income, but as a shareholder in a PIE, I wouldn't. (In fact worse than that, because PIE income is taxed at 33%).
I regard this as an effective subsidy for managed fund managers.