There were warning signs of the RBNZ, among other central banks globally, not tackling inflation correctly as far back as 2019.
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.
The Value in Going Off-Script
No script is perfect on first draft. Even iconic films like Casablanca underwent several changes – it was originally a play called Everybody Comes to Rick’s when Warner Bros purchased it in 1940.
Is Mortgage Shock Setting In?
It’s the moment many will have been nervously anticipating since rates started to rise in June last year – those who choose the cheapest rate on offer, which happened to be a 12 month term, will be refixing their terms.
Diversification: the World Cup of Investing
While the All Blacks are one of the world’s most successful sports teams, Kiwi rugby fans have learnt not to expect them to win the World Cup at every tournament. Likewise, while the NZ share market has punched above its weight over the years, that doesn’t mean it is going to be a winner every time.
Trusting the Swing
There are many fields where it is accepted that, in order to succeed, one must have professional aid. Take golf for example – no pro player is going to go without a caddie. To do so would be to add to their burden and distract them from what’s important in the game.
Volatility: Playing the Long Game
Getting emotionally caught up in the latest news of the markets (which, by the way, is always outdated by the time we hear it) is a bit like basing your entire perception of an athlete on one game.
Buy Now, Pay Later Blues
When there’s not enough in pocket for purchases – essential or otherwise – debt becomes a lot easier to justify.
Crypto: Not a golden ticket
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.
OCR - Chocks Away
This latest change signals the first time the OCR has been raised by 50 basis points twice in a row – ever.
Budget misses the mood of the room
If New Zealand was expecting a dynamic approach to the situation we now find ourselves in... it was not delivered in Budget 2022.
Swings, roundabouts, and streaming services
What matters for individual investors is whether they are on track to meet their own long-term goals detailed in the plan designed for them. Unless you need the money next week, what happens on any particular day is neither here nor there.
Bonds - shaken, not stirred?
They may not be as exciting as a suave Brit exploring far-flung corners of the world in the name of espionage, but bonds are experiencing a bit of fame recently for all the wrong reasons.
Prepare for the brain drain
For the last two years we’ve been grounded while COVID took its toll. Now borders are starting to open and, despite the situation still being grim in places like the UK, New Zealanders are keen to get going and explore the world like they used to.
Watching with interest
All eyes are on interest rates this week, with inflation hitting a 30 year high of 6.9% according to the Customer Price Index (CPI) data.
Chocolate coins (and other dubious currency)
If someone came up to you and offered to convert your cash to a handful of chocolate coins, would you accept them as legitimate currency even though their real-world buying power is severely limited?
The world of crypto and other NFTs (non-fungible tokens) is similar…
The rising cost of living
A report by the New Zealand Initiative states households are spending an extra $3000 or more a year on essentials, with a third of the increase being due to higher transport costs.
Save it for later: The CCCFA revisited
The already-infamous CCCFA was implemented in December 2021 with the view to stop predatory lending practices. It went a bit further than that, and banks were refusing to take chances when there was a $200,000 personal fine for anyone found at fault. Lending, unsurprisingly, slowed right down in the lead-up and after implementation.
Choosing the Greener Path
Investors have been increasingly looking for options aligning with their personal ethics and values, without compromising on potential returns – and evidence is saying they can get both.
Diamonds and Caviar
This geo-political crisis has certainly had economists and politicians running the ruler over sectors dominated by both Russia and Ukraine – such as Russia’s global dominance of the diamond mining production at over 50%, and Ukraine and Russia’s collective 26% of global wheat exports.
