It can be tough not to panic and succumb to a knee-jerk response when markets are experiencing a substantial drawdown like we have seen this year. Stress levels are naturally high and the temptation to “do something” can feel over-powering.
7 Lessons on Volatility
Everyone is an expert after the fact. Predicting the future is nigh impossible, but it’s quite easy to look back and say “we saw that coming” when making a call on either the behaviour of markets, or economic factors.
To Catch a Falling Knife
Financial markets are one of those things that move fast and slow at the same time. Not much happens in the short-term, yet so much happens over longer periods of time. We get so caught up in and sweat the small stuff that we miss the forest for the trees.
Inflation, the Rising Tide
When the Earth, moon, and sun are just so, you get a king tide – which can be a very real issue for those dwelling along the coast. With the rapid swell of inflation, we can see a similar effect.
Banking on Change
In the past few years, we’ve seen moves from big banks offloading their investment and insurance offerings.
We Had Better Have a Plan – Corrections, Risk and Tolerance
With the corrections occurring in the market and the markets doing what they have always done efficiently… It’s time to stop, breathe deep with both feet firmly on the ground, and reassure ourselves of the why and what is of our financial position and plan.
For Want of a Nail
Complaints about lending have increased with banks leery of the risk and opting to take a harsh line instead – leading to reports of people being turned down for mortgages because they were buying drinks at the dairy, spending money at Kmart, or because of pregnancy.
The Downsides of DIY Investing
With home ownership out of reach for many people, we’re seeing shifts in investing priorities that align with generational differences, particularly from Millennials and Gen Z. Following on from Boomers, who are tipped as the wealthiest generation in history, things are tough in a world where costs keep rising and outpacing income.
When it Rains, it Pours
A Consumer NZ sentiment tracker recently reported that 15 per cent of New Zealanders have no savings, 27 per cent were anxious about the level of their savings, and one in ten of the respondents indicated spending more than they saved over the past three months.
The greatest risk
Lurking just under the surface of the investment ocean is a risk waiting to devour retirees desperate for yield. It’s understandable: after all, a retirement portfolio is supposed to generate cash. But considering the current economic situation generating income is tough.
Running a Trust in 2021 and beyond
The Trusts Act 2019 ("Act") will take effect from 30 January 2021. Running trusts under the new regime can be divided into three components — functional, emotional, and ethical. Neglecting to invest trust property or poor investment choices can be reasons for the breakdown of trusts.
Get ready for Life Two
If ever there was a word that needed to be retired it is retirement. What kind of mental picture does this word invoke up for you? Is it sunny beaches and no longer having to set an alarm clock? Or a stressful feeling about how much longer you will need to work to afford such a lifestyle?
The new face of wealth and legacy
Whilst no one sets out to leave a financial mess behind if they lose mental capacity or pass away, but if you want to leave your family fond memories rather than confusion and conflict, you need to properly consider and document your legacy plans.
How to invest during a downturn | Covid-19 Special Focus
Over the past few weeks, we have been answering lots of money and market-related questions that members of our community have asked. Not surprisingly, a lot of the questions have had to do with the market volatility and how that can, or should, affect their investments.
Millionaire’s Dilemma
It is no secret interest rates are low. Have ten grand in the bank? If you are lucky with a ‘high-interest’ account, at the end of the year, you’ll have made $200 and that’s before the taxman and inflation come calling. We’re also told there are rough waters if you’ve got a few million.
Diversification a Great Luxury
New Zealanders are not keen on diversifying. NZX makes up 0.01% of the world’s share market capitalisation, but most New Zealand investor portfolios are overly weighted to the home market. In other words, a New Zealand investor with a strong home bias would have just a 7% allocation to technology, compared to approximately 16% in the global portfolios.
What Lies Beneath?
Record low-interest rates in Australia and New Zealand are tempting yield-seeking investors into products where the risks can be obscured. New products often are marketed as solid, cash-like instruments that offer regular, predictable returns. But we’ve seen this movie before.
The Decade Ahead
It’s that time of year. When everyone starts talking about what will happen next year. Banks. Brokers. Economists. Lunatic gold newsletter salesmen on YouTube. They’ve all got an opinion. The media goes on holidays while those left manning the fort get extra lazy. We’re all subjected to unfiltered astrology calls on financial markets.
Defining Adviser Alpha
Alpha. In an investment sense it means how much better your returns were against a specific benchmark. For example, if you were holding an NZX 50 fund and it returned 12% while the S&P/NZX 50 portfolio index returned 10%, your alpha is 2%. This can also work in reverse. Your fund returns 8% while the index returned 10%, well you’ve got negative alpha of 2%.
Lifestyle comparisons pointless in debtland
Competitiveness can be good. It can drive us further. Lead us to do better things. Challenge ourselves in ways we didn’t think of. You don’t even need to compete with others. Compete against yourself. Health. Fitness. Creative skills. Projects. Financial. Anything. New goals.
