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Is cash better than a portfolio at the moment?

I have had a few people starting to ask me this question recently, so I thought I’d put something together that will help answer this for everyone. It’s a totally fair question and I understand why people are asking! We are currently in a high interest rate, and highly inflationary environment, with interest rates on […]

Silicon Valley Bank – a lesson on bonds

Those following the news will have noticed that three US banks went into a government-controlled bailout this month, Silicon Valley Bank and two rival banks. Silicon Valley Bank was relatively big being one of the top 20 largest US banks. The Silicon Valley Bank was affected by holding too many long-term government bonds (fixed interest) that lost […]

What happened to bonds?

  On November 15, 2020, the New Zealand Herald ran an article titled, ‘What negative interest rates would mean for borrowers and savers’. It said that the Central Bank was seriously considering negative interest rates as an option to stimulate the economy in the post COVID recovery. A mere 18 months later, the Central Bank […]

Have Conservative Funds become Riskier?

Stuff posted an article last week entitled “KiwiSaver investors told: Conservative funds have become riskier”1. This article explains what they meant by this statement, but also why it is fundamentally wrong. It does highlight something that investors should be aware of though.   So why conservative funds specifically? This is all about bonds and how […]

How much money do you need to be “wealthy”?

In Credit Suisse’s 2018 Global Wealth report, New Zealand was ranked the world’s sixth richest country. Only the US, Belgium, Switzerland, Norway and Australia ranked above us. This works on average wealth per person of course, and there are big differences between the wealth of the population as we know, but it’s an interesting place […]

Are we on the Brink of Recession?

Firstly, I want to point out the title of this article. Had I titled the article, “What is an inverted yield curve and why does it matter?” would anyone actually have been interested in reading it? Because I mentioned recession and hinted that we might be on the brink of it, it sounds more interesting […]

A Consideration of Term Deposits versus Investing

Two important considerations Although term deposits are very popular in New Zealand, there are two main reasons why you may not want to invest the bulk of your long-term investment or retirement assets in term deposits. You want a more secure investment You want a better lifestyle A more secure investment It’s a bold statement, […]

Do Lower Interest Rates mean Lower KiwiSaver Returns?

  With the official cash rate in New Zealand being cut to an all time low of 1.5%, how will KiwiSaver and investment returns be impacted?   Firstly, lets look at the direct impact of a lower interest rate on KiwiSaver. Only a very small proportion of KiwiSaver funds are generally held in cash, or […]