Tuesday, April 10, 2012

Fund Management Wars

Today we hear a report in New Zealand that our Government pushed retirement scheme, called Kiwisaver, has over 4% of contributors on' 'holiday' from making payments. Most attribute this to financial hardship.

The figure has grown by 1.5% each year. The age-group doing this? 25-34 years.

Now, I don't like to bash fund invesments too much. After all, these vehicles are nearly all we have in order to invest and try to create a return for our retirement.

Retirement funds will be unable to be provided by government even as many baby boomers get older. Let alone those younger headed for retirement. Now with the likes of Kiwisaver getting hit, retirement plans are looking grim.

As with Kiwisaver, there is a lack of ability for members to keep up payments in investment funds in general. In talking to any of my 'middle-class' and 'upper middle-class' contacts, you get the distinct impression that their reality is less income and higher expenses, but not understanding the causes. They are worried and concerned as budgets do not end positively week after week.

Complaint: Thanks Ben and the boys for letting the system bust while on your watch and trying to fix it with money printing.

However, the big issue going forward is confidence in the fund investment arena. Especially Finance Companies and Investment Banks et al. People not only have less funds to invest, but have less confidence in where to invest. Worldwide, many finance companies went bust taking with them billions in retirement funds. Now those trusty investors don't trust fund managers and don't know where to put savings.

Not only that, their decisions are clouded by lack of return on investment. One needs to make extraordinary returns just to keep ahead of the incidious negative real interest rates the market has been manipulated to produce.

As many articles have alluded to over the past twelve months, we are all speculators now. In and out of the best performing asset classes. Hopefully in and out at the right time. Risk is the order of the day.

Be prepared for war on the investor by smoothe tongued managers wanting every last drop of financial blood from your savings. Already they are talking you out of precious metals (bubbles anyone?) and into the US stock market. Snakes they are. They know the stock market is juiced with comapnies buying back their own shares and they know this will not last.

As with most wars, you don't want to be on the losing side. Hold your ground.

Gold in New Zealand dollars: $1996.11 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $38.37 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)

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