Crypto operates on the greater fool theory. Because it has little real world use currently, investors are buying it on the premise that they will be able to find someone down the line willing to buy it off them – the greater fool, or some optimist who believes they have found their own golden ticket.
There’s a lot of fear about what happens next in financial markets and across the world economy. What should you do in response? Firstly, as always, our advice is to do nothing. We know you’ve heard us say this before, but in this instance, it’s even more important you don’t panic and don’t react.
On 30th July, an important piece of legislation which affects many people received a Royal Assent but received little media attention. It’s the Trusts Act 2019. With New Zealand having the highest number of trusts per capita in the world, new landmark legislation has critical implications for the thousands of trustees and many more beneficiaries of these structures.
It's been quite a time for the markets this August. First the Reserve Bank cut the Official Cash Rate to a new record low of 1 per cent and last week we observed the first inversion of the US yield curve between two-year bonds and 10-year bonds since 2007.
Clearly anyone can quickly pick up cooking, laundry or start the hedge trimmer if needed, but finances can be daunting and difficult if there’s no familiarity there. A lack of financial knowledge can be paralysing if a person is suddenly confronted with financial demands.
New Zealand appears to be stuck in an economic malaise. Household debt has never been higher, wage growth tends to lag, and gross domestic product per capita (everyone’s share of the economic pie) annual growth has been shrinking. And this was with interest rates already at record lows. Solution? Cut interest rates further.
Owning something valuable, such as a house, car or boat, without insuring it means taking a huge financial risk. For that reason, around 95 per cent of New Zealanders have insurance to protect against loss due to disaster, accident or theft. However, when it comes to protecting themselves and their family’s future, the majority have little or no insurance cover.
Ross Asset Management was the biggest Ponzi-scheme ever happened in NZ when it unfolded in 2012 – it is said investors had $450 million with Ross but only $10m was recovered. In reality the figure invested was closer to $110m as most of the $450m were accumulated fictious returns. About 200 have signed up to the claim so far.
Given how unfathomable the game of cricket is for the uninitiated (and initiated) I am at pains to reference such a wonderfully convoluted activity; however, sometimes sport offers up such vivid examples of our behavioural biases in action that it proves irresistible subject matter.
The hype in new IPOs continues to be huge. The recent announcement by Hawke’s Bay Regional Council approving to float a 45% stake in the Napier Port on July 15th has stirred up a lot of interest among many investors in New Zealand.
Heard of Warren Buffett? You probably have. You might not really know much about him, but that’s ok. World’s most famous investor. World’s greatest investor. Take your pick. He’s reasonably well known and has been reasonably successful, to put it mildly.
There are five ages of KiwiSaver. Each of them calls for different strategies to get the best from New Zealand's $50 billion savings scheme offers. People jumped into KiwiSaver, many when the $1000 kickstarter was still available for their kids, and what happened was they became disengaged.
Our income is our most valuable asset. If you had to stop working due to an injury or illness the Government’s safety net (ACC) would catch you, but only just.
An adviser once said he did not so much have people with investment problems as he had investments with people problems. Your assumed rationality can vanish in a crisis. So why not build your human imperfections into your game plan?
Neil Woodford has a neck thick like a rugby player and a head shaped like it was chiselled out of granite, it could be mounted somewhere on Easter Island. Imposing is an appropriate word to describe his appearance. Woodford is a man screaming conviction.
In Greek mythology Sirens were beautiful half-bird/half female creatures, but you couldn’t trust their appearance. They lured passing sailors with beautiful music and melody toward their island home. While not quite as dramatic, the world of investing has never been short of sirens and their songs. These mostly manifest, not in tune, but in story.
“Like me, I’ve got mates who were dubious about the value of insurance and whether claims will actually be paid. But right from the beginning, working with Scott and our insurer has been completely hassle-free.”
Is your will drawn up? Do you have a power of attorney? Aside from ensuring your investments are right for you, your financial adviser should have a healthy interest in ensuring a few other things in your life are addressed.
Any company can run into difficulty. Most potential good news is already built into the stock price of a blue-chip favourite. Bad news tends to be unexpected and can cause significant damage to the share price.
As a topic of conversation, investment is like sports. Everyone has an opinion. And the strongest opinions often come from those who spend more time in front of the TV than out on the field. Practitioners, meanwhile, are wary of anything labelled a sure thing.
Determining how much you will need to save for retirement will depend upon several variables, including your current age, health, income and level of debt. Here are a few guidelines to help you evaluate your retirement needs.
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