| Welcome to the February issue of the Select Wealth Management Dashboard Newsletter. After a really good break with my family, I’m well rested, fired up and ready for another great year. We’re only half way through February, and already the December / January break seems an age ago. Funny how quickly we get back into the routine of work and productivity.
For years I have used the month of January to do planning for the year ahead – both for business and my personal life. I always find this a really interesting and enjoyable exercise. It forces you to THINK. It also forces you to focus on prioritising what is important to you, and what you have to do to make these important things happen. I have scrapbooks going back over 10 years where I have hand written notes relating to goals and priorities for the year ahead. (I realise this might sound a bit naff and it’s not for everyone, but I seem to get nothing done without my written list…). In doing my thinking this year, I kept coming back to a concept I read about in a Ben Carlson book last year – the Geometry of Wealth. He refers to his definition of wealth as being “funded contentment”. This is an interesting concept. Traditionally wealth is perceived as a finite measurable value – a million dollars, owning a Mercedes, or some other arbitrary measure. But “funded contentment” – whatever that may be for each individual – is an entirely different measure. Aside from forcing me to think about what funded contentment means for my family, I was also forced to consider what the implication of this new definition of wealth means in terms of my job as a Financial Planner. Afterall, my job is to grow and protect your wealth – it’s hard to do that if I don’t understand your definition of wealth. Sure, I can aim to get a better return on investment, to create “more”, but this isn’t solving the fundamental issue of what your definition of wealth is. For many years now, our firm has had an emphasis on trying to understand your financial goals – when you want to retire, how much income you want in retirement, what the perfect financial outcome is for you – your definition of wealth. Most of you have already had a retirement cash flow projection done and we review this every year (if you haven’t had yours done yet we need to review this). I have felt for a long time that this is the most valuable part of our service to you – forcing you to consider your definition of wealth, and then mapping out how to achieve this. A little challenge for you this month is to spend some time thinking about what “wealth” is to you. What is your “funded contentment”? Do you want a big house, or would you prefer an overseas holiday every couple of years? Perhaps you can afford both? Perhaps you want neither if it means you can retire 5 years earlier. You see the thing is, in my experience, once you really understand your definition of wealth, you will most likely achieve it. In terms of markets, the past month has seen a lot of activity. The Reserve Bank of New Zealand met last week to review the Official Cash Rate, which was left at 1.75% as expected. However, the comments from governor Adrian Orr were dovish in that he has indicated that rates will stay lower for longer and may even go down before they go up. Surprisingly, the NZ$ strengthened by about 1% against all of it’s trading partners immediately after this statement which seems counter-intuitive. Brexit continues to bumble along without direction as Prime Minister May tries to negotiate an extension on the 29 March deadline. The prospect of a second referendum has now increased from a 5% probability to a 20% probability in my opinion. History will look back on this debacle unkindly I fancy. Despite all of this, the past 30 days has seen continued strong performance in share markets after the December melt down. All markets are up strongly between 3% and 7% with Hong Kong’s Hang Seng being the star performer at 6.86% over the past 30 days – impressive returns by any measure. Currencies were a bit more mixed with the NZ$ weaker against some trading partners, but stronger against others. Here are the numbers for the past 30 days: |
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In terms of your Select Wealth Management portfolio, there have been no changes over the past 30 days. I’m comforted to see that fund values have recovered well since the terrible December quarter and that our managers continue to meet our expectations. I meet with researchers JMI Wealth next Friday, so will report back with any changes next month. Finally, a quick update on our Giving Back program for Loren Harvey. I am really pleased to say that we have got off to a great start for Loren’s campaign, and at this rate we’ll be able to put together a lovely baking package for her. You can learn a bit more at www.mifinancialplanning.co.nz/giving-back.html . As always, thank you so much for the referrals of your friends and family – it’s your support that makes this campaign possible and successful. Until next time, keep warm and well. 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.