| Welcome to the February issue of the Select Wealth Management Dashboard Newsletter. I always find the beginning of the year a bit "stop start" with all the public holidays and disruptions. But now that Waitangi Day has come and gone, it feels like the work year is properly underway. There is a good stretch ahead now before a nice break in mid April for Easter again. If only the weather would play its part...
The past 30 days have been relatively quiet without much fanfare. There were a few local developments – in particular Prime Minister Bill English confirming an election date of 23 September. No doubt politicians and their parties will begin jostling for positions, coalition deals will be struck, and the lolly jar will be carefully weighed and measured to see how big the scramble can be (or if there can be one at all...). It should be an interesting year of politics – National gunning for an uncommon 4th term, and Labour trying to bump the incumbent off their pedestal. All the while the New Zealand economy keeps ticking along nicely and is the envy of many countries, and the average man of the street seems to be doing ok. I imagine that this would dampen any appetite for political change. At about the same time as this date was confirmed, Reserve Bank governor Graeme Wheeler announced that he will not be seeking a further term and will be standing down on 26 September. At this stage, there is little opinion on him or his success in his role. Nobody seems to have a definitive view (positive or negative) on him. This suggests to me that he has in fact done a great job during his tenure – akin to a sports ref who goes unnoticed for an entire game without disruption. There is good lead time for the search for his replacement, so I'll watch with interest – this is an important position that has the potential to influence your and my lives materially. Sticking with Mr Wheeler and the Reserve Bank, the most recent meeting was on 9 February where the OCR (official cash rate) was left unchanged at the historically low rate of 1.75% (as was unanimously expected). However, the statement made with this announcement was a bit surprising and caused a noticeable reaction in the markets. Mr Wheeler stated that "monetary policy will remain accommodative for a considerable period". Consensus among commentators is that we have reached the trough in this interest rate cycle, and that rates are likely to move up from here. However Mr Wheeler's statement suggests that whilst this may be the case, we are a long way off this occurring. The reaction was for bond prices to rise, and our currency to fall sharply against trading partners. This would have pleased Mr Wheeler, as he also stated that his view is that the NZ$ "remains higher than is sustainable for balanced growth". Selfishly, this also pleases me as rising bond prices and a falling NZ$ has a positive effect on our portfolio returns. Globally there is little to report. The media remains hysterical with President Trump, so there is always lots of "noise". He feeds them plenty of fodder, and continues to polarise the Nation and sometimes the world. Investment markets are caught somewhere between fear and optimism, which is captured by this quote from the "Reformed Broker" Josh Brown's blog: "The irony is that he could be one of the great presidents if he does his policies, except for all the other stuff..." Love him or hate him, you can't accuse him of inaction. He knows that there is 0% chance of a second term for him, so he has exactly 4 years to make his mark – and he's not wasting a minute! Here are the numbers over the past 30 days. |
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In terms of your Select Wealth Management investment, there has been little change over the past 30 days. There were 2 new bonds added to the menu recently – an ASB bond maturing in 2025 and a Westpac Bond maturing in 2026, so please feel free to contact me if you are interested in learning more about these. I am also meeting with JMIS (the researchers for Select Wealth Management) at the end of the month for the quarterly review, so will let you know if there are any material developments as a result of this meeting. I am also pleased to say that we have had a good start to the year for our Giving Back program. We are 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 mifinancialplanning.co.nz/giving-back.html . As always, thank you so much for all the referrals to your friends, family and colleagues – we really appreciate it. In closing, cricket fans around the country will be rubbing their hands in anticipation of a challenge against the mighty Proteas. With the Black Caps having just dealt the Aussies a hiding, this promises to be a cracking series. Bring it on!!! 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.