| Welcome to the September issue of the Dashboard Newsletter – the first with our new look Isaacs Financial Planning brand. We hope you like it. Feel free to check out the new website too – www.mifinancialplanning.co.nz
Once again, it has been an eventful 30 days since last I wrote. The world in general has been a volatile place over the last 30 days in an economic, humanitarian, and even climatic sense. The biggest story is the European refugee crisis. You will no doubt have seen the tragic pictures and heard the heart breaking stories of these poor Syrian refugees running for their lives. Nobody knows the exact number, but estimates range between 3 and 9 million displaced refugees, with the consensus being about 4 million people. It's hard to imagine the equivalent of the whole of New Zealand's population being on the run with nowhere to go. Given Europe's geographical proximity, it has defaulted to being a destination for refugees (along with countries like Jordan, Lebanon and Iraq). European Governments are grappling with how best to deal with the issue, and it is turning into a heated political debate with strong views on both sides – supporters of taking in refugees, and opposition wanting to keep refugees out. Even as far abroad as New Zealand, our Government passed emergency legislation to allow an extra 600 refugees into our country. Most Kiwi's I speak to seem to feel that this is a token number, but appreciate that New Zealand is at least doing something to help. In an economic sense, the last 30 days was all about China. The concern was that Chinese growth is slowing and will dip below 7% per annum for the first time since 1990. This created volatility in global share markets and caused concern over global growth moving forward. Share markets over the last 30 days are all down between 1.5% and 8%, with Japan being an outlier at -14%. However the world has had some time to digest some of this information now, and views are forming that the Chinese slowing isn't as major a concern as originally feared. For a start, we need to bear in mind that China (the second biggest economy in the world), is still growing at an incredible rate. Whether it is 6% or 7%, this is still much higher than most other economies around the world. (Think of New Zealand's 2.5%...). There are also some reports now suggesting that a Chinese slow down will not have as direct an impact on economies such as the USA and Europe as originally expected. So markets have bounced off their lows, and volatility has settled somewhat. It is also important to remember that volatility in share markets is not abnormal. Markets react sharply to news – both positive and negative. You probably won't remember them all, but in the past 7 years the Australian share market has fallen by 10% or more on 5 separate occasions. Yet over the same period, the return has been nearly 12% per annum. It is important to stand back from the noise and look at the bigger picture from time to time. The next big event is what the FED (the USA's equivalent of our Reserve Bank) does with its interest rate this coming Thursday. At the beginning of 2015, a rate hike in the USA was considered an absolute certainty, and this Thursday may be the day it takes place. This illustrates that the US economy continues to strengthen and warrants a rate hike – in contrast to New Zealand's position where we had another rate cut last week with a statement suggesting another cut before the end of the year is likely. So after all the noise, here are the numbers for the month: |
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In terms of Select Wealth Management, your September performance reports are due out at the end of the month. I am extremely pleased to say that despite all the market movements, the 6 months returns are still marginally positive (as at today) for most portfolios. This is testament to the great work done by JMIS and our fund managers who have navigated these last few challenging months very well and used our currency to our advantage. Once again, thank you to those of you that have already returned your new signed application forms for the JMIS transition. Please remember to do this at your earliest convenience if you haven't yet. If for some reason you have not received your form for signing yet, please contact me at your earliest convenience so that we can arrange it for you. It is very important to get these done as soon as possible. As always – if you have any questions regarding the application form or anything else, please do not hesitate to contact me – I am here to help. I look forward to catching up soon. Warm regards Dave Isaacs 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.