| Welcome to the August issue of the Select Wealth Management Dashboard Newsletter. Firstly, let me take a minute to congratulate our Olympic athletes who managed to bring home a record haul of 20 medals - including 7 gold. What an incredible performance by some remarkable athletes. Congratulations also to Japan, who against all odds, hosted a fantastic event. Despite there being no crowds and the event being different to a traditional Olympics, they proved that with some determination, creativity and discipline, the show can in fact go on. There were a million reasons to call the games off, but I am deeply encouraged by the fact that the authorities had the conviction to find a few good reasons to proceed. It encapsulates the Olympic spirit and sets the example for success.
I'm not sure about you, but I feel like the past month I've been bombarded with predictions and forecasts about all sorts of different things. There was the climate change report released by the Intergovernmental Panel on Climate Change (IPCC) forecasting a fairly grim outlook for the world from an environmental and climate perspective failing some radical change to current behaviour and emissions. There was the report from the Strategic Covid-19 Public Health Advisory Group forecasting a pathway for New Zealand's borders to re-open and suggesting that more Covid-19 outbreaks in New Zealand are inevitable. On the economic front, all the talk has moved to interest rates with several different forecasts coming out predicting rate rises as soon as the end of month. That's got all the housing commentators forecasting what the implications will be on house prices when mortgage rates go up - some forecasting reasonable price falls over the next 2 years. That's got the share market pundits forecasting what that means for share prices. On and on it goes. I once heard someone say "If you ask a person to forecast the future, you learn a lot about the person, but very little about the future". I love that - it's so true. Whenever I start to hear this much "chatter" in the market, I feel like it's a signal to be extremely alert and vigilant. This is particularly relevant right now, because let's face it, the world is faced with some pretty complex circumstances at the moment. Charlie Munger, Vice Chairman of Berkshire Hathaway, summed it up nicely recently saying "If you are not a little confused by what's going on, you don't fully understand it". The fact is that forecasts are only opinions and best guesses. They can be helpful (especially if you consider many different ones from both optimists and pessimists), but when it comes to your long term financial future and your investments, they should not fundamentally alter your approach. I must sound like a broken record, but if you have a robust financial plan and a well diversified investment portfolio, and you stick to it, then over time you will almost certainly achieve your goals. It really is that simple. Any given day, there would be a million reasons to make wholesale change to your investment portfolio. A negative forecast could have you second guessing if you should sell shares and be more conservative. Bitcoin could create FOMO (fear of missing out) and spur you into "taking a punt". Tax changes could lure you in or out of investment property. But the smart investor knows to take all this information with a pinch of salt, and focus primarily on factors that they can control. Follow the example of the Japanese. Avoid the temptation to succumb to the reasons to quit your investment strategy, and find some good reasons to stick with it. This is your best chance for investment success. In terms of the markets, the past month has been mixed - similar to last month. The Hong Kong share markets continued to fall (-4.57%) whereas the Australian share market had a great month (+3%). The NZ$ was muted against most trading partners, except for a 1.54% gain against the AUD$ - getting close to parity now. Most notably, mortgage and term deposit rates increased a bit again - and let's watch this space over the next few months and see if the forecasts come to fruition. Here are the numbers for the past 30 days: |
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In terms of your Select Wealth Management portfolio, there are a couple of developments. For those of you who use the online portal, you may have noticed that there have been a few improvements in the information available and the way this information is displayed (under the "beta" tab). This is the first in a series of improvements that will be rolled out in the foreseeable future. Hopefully you find these improvements helpful, and please let me know if you have any feedback (both positive or negative). If you have not registered for the portal, I strongly encourage that you do - it's a great facility. Give me a shout if you aren't sure how to register and we can help you through the process. We are also in the process of reviewing all AMP managed funds, and are likely to remove these from the menu of approved investments in the next short while. Whilst these funds have delivered reasonable returns in the past, we have concerns around AMP's commitment to the New Zealand market. This is currently under review, and I'll be in touch with you personally if I think you need to make any changes to your portfolio. Finally, a quick update on our Giving Back program. Thanks to your wonderful support and generous referrals, I am pleased to say that we have had a great start to our campaign for Leukaemia and Blood Cancer New Zealand. I am confident that we will be able to make a meaningful contribution to their great cause, and you can follow the progress of our campaign at https://mifinancialplanning.co.nz/giving-back.html As always, thank you for your continued support and referrals of friends and colleagues that makes this program possible. I really appreciate it. 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.