Welcome to the February issue of the Select Wealth Management Dashboard Newsletter. It has only been 1 month since the last newsletter, but it is remarkable how much has happened in the past 30 days:
It really has been an incredible 30 days, a stark reminder of how unpredictable life is, and quickly things can change without notice. I'll start by expressing my sympathy for those unfortunate people that have been affected by the flooding and Cyclone Gabriel. When the public warnings were announced before the storm, I really wasn't expecting anything at all as severe as this. The scale of the damage has caught me way off guard - it seems to me the worst natural disaster since the Christchurch earthquakes 12 years ago. There is a long road ahead for many families who have had everything taken away from them, through no fault of their own. As a country, we will need to come together and all play our part in the recovery, either directly or indirectly. Events like these always compel me to re-calibrate my priorities. It really does get me laser focused on what is most important to me. I can't imagine what it would be like to have the sanctuary of my home taken from me, or the comfort of my job / business, heaven forbid a loved one. Too often, we are looking for the next best thing - a faster car, a bigger house, a better job, better returns. Don't get me wrong, these aspirations are important - it's the reason civilization moves forward. But sometimes it is important to take stock of what we have too. The mere fact that you receive this newsletter means that you have accumulated some degree of wealth (I use the term wealth in a relative context). I imagine your wealth, like mine, took a lot of hard work, skill, discipline, sacrifice, and a healthy dose of good fortune to accumulate. We should never take for granted this wealth, nor take lightly our responsibility to protect it. At Makowem & Isaacs Financial Planning, we take seriously our obligation to help protect our client's wealth - it's in our DNA. It's why we are in the business of "Financial Planning", as opposed to "Investment Planning". There is a difference: Investment Planning - striving to extract the best possible return for a given level of risk. We do our level best to achieve this. Sometimes we'll get it right, sometimes we'll get it wrong. But over longer periods of time, most well managed investment portfolios will deliver comparable outcomes. Financial Planning - striving to grow and protect our client's wealth. This involves a lot more - understanding your financial and retirement goals. Understanding your priorities. Creating a cashflow plan to achieve these goals. Making sure you have appropriate insurance, Powers of Attorney and a Will in place. Ensuring there is an emergency fund to carry you through unexpected events. Ensuring that your wealth is diversified, and not concentrated in any one particular sector or geographic area. It's through Financial Planning that we are striving to build and protect our client's wealth. Obviously there is no way to protect yourself against natural disasters like we have just had - only good fortune protects you against that. But while it is fresh in your mind, take some time to take stock of your own arrangements. Do a quick check on your insurance, check your Will, think about how long you could last without income on your current savings, check your disaster emergency kit. A bit of time spent on this now is possibly the best investment you could make this year. In terms of the markets, the past 30 days have been fairly muted. Most share markets are in a narrow range from -0.5% to +2%, the exception being Hong Kong's Hang Seng down 4%. The NZ$ is slightly weaker against most trading partners, and house prices continue to fall. One noticeable move this month has been in the mortgage rate market. For the first time in a long time, a 1 year mortgage rate is more expensive than it's 2; 3 ; 4 and 5 year counterparts. So banks are offering slightly lower mortgage rates in the longer term in an effort to entice mortgage holders to lock in these longer term rates. This is a clear indication that banks expect interest rates to come down in the foreseeable future. They do not expect mortgage rates to be as high in 2, 3 or 4 years time, so they want borrowers to lock in higher rates now. Perhaps some relief is on the horizon for mortgage holders… Here are the numbers for the past 30 days: |
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In terms of your Select Wealth Management portfolio, the year has started well with solid return in January and February. Our portfolios have been resilient to the developments over the past month, and our fund managers continue to deliver as expected. Fixed interest continues to look far more attractive that in recent years, particularly with the prospect of interest rates globally nearing the top of the cycle. Finally, a quick update on our Giving Back program. After a challenging campaign for Kaibosh last year, I am very pleased to say that we have had a great start to the campaign for the nurses. We have already managed to raise just over $900 so far, and we still have 3 months to go on this campaign. So hopefully we should be able to raise a meaningful amount, and get a good number of coffee machines and healthy supply of coffee for the wonderful nurses at Hutt Hospital. As always, thank you for the introduction to your friends, family and colleagues which enables us to continue this initiative. To keep track of the Giving Back program visit https://mifinancialplanning.co.nz/giving-back.html That's all for now. Chat again soon Warm regards Dave and the team at Makowem & 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.