| Welcome to the April issue of the Select Wealth Management Dashboard Newsletter. It seems too early in the year to be commenting on crazy weather (I normally only start that in July), but if the forecasters are right then we need to batten down the hatches for Easter!
The first quarter of the year is gone, and I am pleased to report that from an investment return perspective it has been a good one. This quarter has been a great example of why at Isaacs Financial Planning we follow a strategic investment approach and avoid trying to "time the market". There was much concern at the beginning of the year about market volatility (think Trump election, rising global interest rates, European uncertainty) and it would have been easy to make rushed, emotional investment decisions. Josh Brown sums it up best with his quote "Every advisor's client yearns to be able to say "My guy got me out" at the country club". But more often than not, sitting on your hands and sticking to a strategic investment plan yields the better results. Yes, we'll have some uncomfortable, bumpy rides at times. But in the long run we'll achieve what we set out to achieve. Let's enjoy the good quarter we just had. Much the same as the start of the last quarter, the new June quarter is kicking off with its fair share of uncertainty. In particular, there is plenty of political uncertainty. The atrocity in Syria has drawn a response from President Trump, and it is hard to imagine that we've seen the end of this issue. America's response was a clear message to Syria, but at the same time it was a subtle message to Russia that they need to show more commitment to policing Syria. All the while, President Trump is meeting with Chinese Premier Li Keqiang discussing trade deals and China's obligation to police North Korea. His Syria / Russia message would not have been lost on Premier Li Keqiang regarding North Korea. Across in Europe, British Prime Minister Theresa May triggered Article 50 on the 29th of March – the formal notification that Britain will exit the European Union. Now begins a 2 year negotiation process to define the relationship between Britain and the EU in the future. Brexit was all we heard about for a while leading into the referendum, but then it seemed to fall off the radar afterwards. I expect the rhetoric will pick up again as the negotiations unfold. I am still of the view that this is going to be a painful process that is being underestimated by most Britains. With French elections 2 weeks away and German elections later this year, I imagine European leaders will want to make an example of Britain to deter other member states from considering a similar route. The European Union has too much at stake, and cutting Britain off at the knees seems a likely response to make clear that this is not a feasible or attractive option. I'll watch with interest, and expect that the Pound Sterling will have a volatile few years ahead. Despite all this uncertainty, it is really important to remember that the world is progressing at an incredible rate, and every day there are companies doing amazing things in an effort to improve our lives. Investment opportunities are as abundant today as they have ever been. An interesting example of this is Tesla – the electric car maker. Five years ago this company was virtually unheard of, and the vision of making electric driverless cars mainstream was considered a pipedream fit only for science fiction movies. But as this pipedream becomes more and more realistic the company has grown and is now worth as much as General Motors (despite the fact that there are still very few Tesla cars on the road). The potential of this company has seen its share price go from $28 to $296 in under 5 years – an incredible return. It is important to make a conscious effort to balance the negative news you hear in the media with positive stories like Tesla (and all the other similar companies in industries like healthcare, manufacturing, clothing, nutrition, space travel, the list goes on...). In terms of the markets, results have been mixed over the past 30 days. The worst performing market by far was Japan (down 5%), contrasted against Hong Kong and Australia up 2% each. I am always encouraged by a wide divergence of returns from one market to the next. It suggests that fundamental drivers for each market have affected the result – rather than markets simply rising or falling in unison based on sentiment. The NZ$ has been reasonably stable over the past 30 days, as have home values across the Nation. The big news for retirees is that the state pension was adjusted for inflation this month which means an extra $8.36 per week in each pensioner's back pocket. It's easy to scoff at this increase, but we have to remember how privileged we are as New Zealander's to get a pension at all. Many Nations don't offer one, and it's not inconceivable to think that the universal nature of New Zealand's pension could change in the future too. Here are the numbers: |
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In terms of your Select Wealth Management investment, the 31 March performance reports are in the process of being printed and mailed as we speak. As I mentioned earlier, I am pleased to confirm that the returns for the quarter were robust. If you have registered for online reporting, your report should be available for viewing already. Your tax reports will also be with you shortly for those of you who file a tax return (remember that you can claim your fees back as a deductible expense). If you have any questions about either of your reports, please do not hesitate to contact me – I am here to help. In closing, a big thank you for all the referrals to your friends, family and colleagues – we really appreciate it. We have had a great first quarter thanks to your support, and remain on track to raise enough money to buy an "Airvo" breathing machine for the children's ward at the Hutt Hospital. You can follow our progress at www.mifinancialplanning.co.nz/giving-back.html . Have a fantastic Easter, and travel safely if you are on the road. Warm regards Dave and the team at Isaacs Financial Planning dave@mifinancialplanning.co.nz |
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This newsletter is intended for general distribution and does not constitute personal financial advice. Copy of my primary disclosure statement and secondary disclosure statement.