ASB investor confidence survey finds Kiwis in relative good spirits despite events in Europe; KiwiSaver emerging as a preferred retirement saving vehicle, tied with property.

ASB investor confidence survey finds Kiwis in relative good spirits despite events in Europe; KiwiSaver emerging as a preferred retirement saving vehicle, tied with property.

By Amanda Morrall

New Zealand investors appear to be keeping a stiff upper lip through the events in Eurozone, according to the latest ASB Investor Confidence Survey.

The third-quarter report gauging the mood of investors found that confidence reversed a Q2 fall,  climbing three points to the end of September.

Jonathan Beale, head of private banking and wealth management, said it remained uncertain whether confidence would retreat again given the ongoing dramas in Europe.

“It appears that Kiwi investors have stayed calm amid the threat of European government defaults and a European banking crisis. It remains to be seen whether the evolving situation in Europe will impact local investor confidence in the coming months,” said Beale.

Despite the Reserve Bank signalling a lingering low-interest rate environment, term deposits remain top of the pops with investors.

For the sixth consecutive quarter, they proved the most popular investment class,  with a total of 18 percent of respondents saying they believed they would give the best returns. 

Beale said that reflected Kiwi's traditionally low risk attitudes

What was more surprising was Kiw Saver tieing rental property for second place in terms of perceived superior returns, said Beale.  He said it was the highest ranking KiwiSaver had achieved since the ASB's investor confidence survey began.

KiwiSaver has also climbed the scales as a retirement saving vehicle, according to Beale. 

The survey found that almost half of respondents, a record 47%, are using KiwiSaver as part of a saving platform.

Further, out of those using or intending to use KiwiSaver, a total of 64% indicated it would be their primary source of retirement savings, another first in terms of survey results.

Meanwhile, rental property sunk to its lowest level of popularity since the third quarter of 2002.

“The effects of the property slump still appear to be taking the shine off rental property investments, despite the current low interest rates,”  said Beale.

 

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Kiwisaver has regrettably  become a Mongrel Scheme that has replaced Finance Companies as the slaughterhouse for Middle class New Zealand . It consists of Negative returns , no growth , and being raped for fees

The only people making money are the Service Providers , and frankly its bollocks that service providers can erode capital in fees and charges  . 

I have moved my Kiwisaver scheme to a bank where its held in cash ( Not Bonds but plain cash )  and I contribute the minimum required to get the tax break. My scheme was worth about $15 k and  is now down to about $12k, and all income last year ( 2010) went in fees .  

My view on investment  generally is that I am very uncomfortable with whats going on in Europe, and have adopted a DEFENSIVE INVESTMENT STRATGEY .Having spent time in Europe in my 20's during the late '80's and early 90's  , I dont trust the Euro common market , common currency system . 

To Quote Yeats " The centre cannot hold and things will fall apart."

The reason Euroland will never be really united , is re there is no real cohesion, no real common identitiy , no common work ethic , and an inherent mistrust of each other 

And sorry to say it will affect us here in Newsland when things unravel

My personal investment strategy used to be 1/3 rd in Property , 1/3 in listed equities ( Split between ASX and NZX and some in emerging markets ,) and 1/3 rd stuck in a revolving facility in my home mortgage .

Now its , NO DEBT or mortgages ( 4 out of five Mortgages are Paid off including investment properties), cash in the Bank split betweeen NZ$ and Aus$ (where interest rates are a bit higher.)

 I have dis-invested completely from the NZX and retain a small holding on the ASX in resource shares and Banks and Financial  Services.

Now that I am mostly in cash , I am happy to be a spectator on the side and watch the game unfold 

 

 

KiwiSaver was a reasonably good idea that from the very outset was destined to fail, simply because there was no way to prevent it being abused.

If only we'd had a compulsory super scheme implemented back in the 1970s.

Imagine how well off we'd be today.

What a shame nobody in NZ thought of such a thing back then.