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.
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.
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.
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%.
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.
When young people and young families reach out to me or other financial advisers, it’s typically centered around particular financial questions, goals, or issues they need help with at that point in time. Other times, it’s a combination of all these things, as their situation has become too complex to manage by themselves.
Finding $20 in your pocket is always great but imagine finding thousands of dollars in super that you had lost track of? According to the Australian Taxation Office (ATO), as at 17 May 2019, there were AUD$ 17.5 billion funds in lost and unclaimed super money, and we know that a large proportion of these funds belongs to Kiwis.
It’s no great secret that as we age our bodies begin to go into some form of decline, it can’t be disputed because the evidence is visible. Mental decline isn’t visible, no one knows what’s happening in anyone else’s head. This means it might be more open to dispute, delaying any response.
Women need to educate themselves about how to mitigate things like illness and the loss of a partner and talk to an expert about things like estate planning, life and health insurance, investing and retirement planning. The more informed and prepared women are for these things, the better they will feel, and the more protected they will be.
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.
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?
“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.
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.
Some positive KiwiSaver changes are coming into effect from 1 April 2019 and later in the year. These changes will provide greater options for New Zealanders to see their retirement savings increase over time.
Digital innovation has democratised access to financial information to the point where anyone with a smartphone, a few apps and real-time news and data feeds can be like a pro trader. But who wants to do that? And do you need to?
So, renting a home always equals throwing money down the drain, and buying a home is key to building equity … right? Nope. That rule is as outdated as a horse and carriage. In fact, more people are deciding to keep on renting — indefinitely. Why? People have different financial goals.
Those of you in your 30s know it's the decade when a lot of significant things happen. Along the way, there are some smart money moves you can make now that "Future You" will seriously thank you for.
We'd all love for the market to go on a tear forever, reaching record highs and blowing minds; but the truth is, downturns are a reality, particularly if you are a long-term investor.
The new year is a time of reflection; a ready-made reminder to us all that we should perhaps take stock of what's happened and what will come next. It is a good time to ask a very simple but profound question: What could possibly go wrong over the course of the coming year?
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