| Welcome to the October issue of the Dashboard newsletter. The past 30 days have been relatively muted from a market perspective, so there is not too much to report this month. There is a sense of quiet before the storm with all eyes now on the US elections and the FED's FMOC next meeting.
On 8 November 2016, American citizens will head to the polls to end one of the most brutal, long winded election campaigns that they have ever had to endure. It feels like the presidential race has been going for a decade to me. Think back to the primary elections where the big question was "Could it possibly be that Donald Trump ends up winning a Primary and being the Republican candidate"? For some that seemed outlandish, and yet here we are. Many commentators have now written him off and have already printed the post-election headline with Hillary's name in it. There seems to be an endless stream of mud-flinging and scandal that Trump detractors can latch onto – even some of his own party are turning on him. But somehow he is still standing, and throwing counter punches. So in my view, the race is still on and anything could happen. As the old saying goes, "a week is a long time in politics", and if Brexit taught us anything it should be that no public vote result is ever a certainty – no matter how much it seems so on the surface of it. In conjunction with the US election, the Federal Reserve also meet on the 2nd of November and again on the 14 of December. There is a high expectation now that they will raise the rate from the current 0.25% before the end of the year. The most recent US jobless claims number was lower than forecast and at a 43 year low meaning that the labour market remains very strong. So the FED is really running out of excuses to not increase rates – the question is simply when. From an investment perspective, these 2 major events will almost certainly create a bit of volatility in the last quarter of 2016. There are a range of potential outcomes that markets could react differently to. If the FED raise rates in November and then Trump wins the elections, markets will most likely react negatively. Conversely, if the FED leave rates unchanged in November and Clinton wins, markets will most likely react positively. Obviously there is no way of knowing how these events play out, so the best strategy is to have a balanced approach with a well diversified portfolio. Remember, we are not investing in an effort to make a quick short term profit, we are investing to achieve a good long term outcome. Given that there is not too much else to report this month, I thought I would throw in a few investment quotes that I like.
Share markets have mostly tracked sideways over the past 30 days. Most markets have moved in a range of about 1% with the only outliers being the London and Australian markets (both up 4%). There have been some big moves in currency markets though with the AUS$ and USA$ both strengthening against the NZ$ (by 3% and 2% respectively), but the GBP continuing its downward spiral falling by another 5% against the NZ$. The GBP has now fallen in value by about 35% against the NZ$ since Brexit – a colossal move in just a few months. Here are the numbers: |
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In terms of your Select Wealth Management investment, the performance reports for 30 September are now complete. If you have registered to receive your reports online, it is ready for viewing in your portal – simply login to access this and other helpful information. If you still receive your reports in the mail, these are currently being printed and will be with you shortly. On the whole, the performance for the September quarter was robust, and I am happy with the position of the portfolios. We meet with our researchers JMIS on the 15th of November again, so I'll keep you posted with any developments. If you have any questions in the meantime, please do not hesitate to contact me – I am here to help. Finally, a quick update on our Giving Back campaign. As you may recall, we are supporting Olympic swimmer Emma Robinson for the second half of 2016. Emma is heading to Singapore, Tokyo, and Hong Kong soon to compete in the Asian Short Course World Cups. Each event is two days long with only a few days in-between for the travel. Then it's back to her training base in Australia where she will training for NZ World Champ Trials in April. Good luck Emma – we're rooting for you. As always, thank you for all the referrals over the past month – I really appreciate it. Check out our progress for Emma's giving back account at mifinancialplanning.co.nz/giving-back Until next time, keep well. 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.