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Biden Versus Trump

Some speculate that the future of the republic hinges on the outcome of the next election. But for smart investors it doesn't really matter who wins. Conventional wisdom says that those liberal Dems are generally bad for the economy and the stock market because of their big government tendencies, while fiscally conservative Republicans are good. This widely accepted belief is actually fake news if you look at data going back to the end of World War II. “Stock markets do perform...

HHG's Preferred New Zealand and Australian Equities

The stocks listed below have varying advantages and will suit different investment objectives. They have one common trait in that they have all been selected with a long-term focus. Contact Energy has a narrow economic moat, which reflects the oligopolistic structure of New Zealand’s electricity market. The firm generates a fourth of the country’s electricity and supplies power to more than 400,000 residential customers. Being a net generator, Contact Energy benefits from high spot prices. These typically occur during a dry...

Defend and diversify with Bonds

Why bonds are critical in any portfolio COVID-19 has had many ramifications, including an increase in the number and size of the government’s debt programmes. While these programmes assist people and businesses that are struggling, they also need to be funded – and this is where bonds come in. Bonds are the way governments raise money. In the current environment, there’s strong demand for them – especially for the A-rated bonds – and for very good reasons. For example Government bonds...

Why Are Interest Rates So Low?

The Monetary Policy Committee (MPC) is an internal committee of the Reserve Bank of New Zealand (RBNZ) and is responsible for formulating monetary policy in New Zealand, directed towards the economic objectives of achieving and maintaining stability in the general level of prices over the medium term, and supporting maximum sustainable employment. The global economic disruption caused by the spread of COVID-19 has been catastrophic, but the effects on the developed worlds’ share markets have largely been mitigated by the...

The Benefits to Staying Invested

As most major indices around the world close in on or even surpass their all-time highs, most investors will have reaped the benefits of employing a long term strategy over the last six months, staying invested and not panicking when the share market goes through even the most dramatic of falls. In fact, as investors, you have now all lived through the sharpest, shortest market crash in living memory, followed by a similarly spectacular recovery and are still here to tell...

How is The Reserve Bank of NZ using Monetary Policy Tools to Effect Changes in Interest Rates?

The Monetary Policy Committee (MPC) is an internal committee of the Reserve Bank of New Zealand (RBNZ) and is responsible for formulating monetary policy in New Zealand, directed towards the economic objectives of achieving and maintaining stability in the general level of prices over the medium term; and supporting maximum sustainable employment. The global economic disruption caused by the spread of COVID-19 has been catastrophic, but the effects on the developed worlds’ share markets have largely been mitigated by the...

Portfolio rebalancing, is it worthwhile?

Rebalancing your portfolio is one of those beneficial habits—like flossing every day or dusting under the refrigerator—that’s easy to let slide. But if your portfolio’s equity exposure crept up over the past few years, the sudden market correction in February and March was a harsh reminder of why it’s a good idea. In this article, I’ll look at how different rebalancing frequencies have paid off in 2020’s turbulent market, as well as during other market drawdowns. In a nutshell, any...

The 100 Year Life: How to make longevity a blessing, and not a curse

WHEN Poles want to wish somebody well, they wish them a hundred years of life. This is a charming prospect, as long as the chances of it coming to pass are vanishingly small. But once it starts to look as though it might actually happen, you may think that people should be careful what they wish for you. As Lynda Gratton and Andrew Scott make arrestingly clear in their book The 100 Year Life, it will take a lot more than...

Retiree Spending Patterns Differ from Expectations

Recent analysis of real-world expenditure data from Australia has shown a dramatic fall-off in retiree spending as retirees age. Given the similarity between Australian and our demographics, this study provides useful information for retirees in New Zealand. How retirement spending falls The median retired couple’s expenditure falls by more than one-third (36.7%) as they move from their peak spending years in early retirement (65 to 69 years-of-age) and into older age (85 years and beyond). The decline in expenditure for couples...
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Jargon Busting - Capital Raises - What Are They And, Why Do They Occur?

Over the last couple of months, you have probably seen or heard this term on multiple occasions, Auckland Airport, Z Energy, Sky TV, Cochlear and Ramsay Healthcare are all examples of companies who have recently announced capital raises – but what exactly does it mean? A capital raise is where a company issues new shares in exchange for additional funds (or “capital”). The specifics of each raise will vary, but new shares will usually be offered at a discount to current...
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