We’re spending more than we’re earning overseas – to the extent that this is the largest annual account deficit to GDP ratio since records began in March 1988. The previous largest was during the global financial crisis in December 2008.
Bills, Bills, Bills...
This is the highest since February 2020, back in the initial uncertainty of covid times... Only the economic landscape is quite different.
Government Funded, Locally Led
The next few years will be tough. But if the Government does it right, and nurtures a local led approach, this is an opportunity for us to come back stronger (and more resilient) than ever.
Save it for later: The CCCFA revisited
The already-infamous CCCFA was implemented in December 2021 with the view to stop predatory lending practices. It went a bit further than that, and banks were refusing to take chances when there was a $200,000 personal fine for anyone found at fault. Lending, unsurprisingly, slowed right down in the lead-up and after implementation.
Diamonds and Caviar
This geo-political crisis has certainly had economists and politicians running the ruler over sectors dominated by both Russia and Ukraine – such as Russia’s global dominance of the diamond mining production at over 50%, and Ukraine and Russia’s collective 26% of global wheat exports.
Banking on Change
In the past few years, we’ve seen moves from big banks offloading their investment and insurance offerings.
We Had Better Have a Plan – Corrections, Risk and Tolerance
With the corrections occurring in the market and the markets doing what they have always done efficiently… It’s time to stop, breathe deep with both feet firmly on the ground, and reassure ourselves of the why and what is of our financial position and plan.
Are Concerns About Inflation Inflated?
Okay, the annual inflation is now running at 3.3%. In the June 2021 quarter compared with the March 2021 quarter, the New Zealand Consumer Price Index (CPI) rose 1.3%. A much stronger lift than the market expectations. So what does it mean to us?
The lesser-known link between investment and return
"Investment" actually has two interrelated meanings: a physical investment (machinery, building, cars etc.) and financial investment (stocks and bonds), which lays claim on physical investment and the income (aka "return") it generates. So what is the lesser-known link between investment and return? Productivity.
The greatest risk
Lurking just under the surface of the investment ocean is a risk waiting to devour retirees desperate for yield. It’s understandable: after all, a retirement portfolio is supposed to generate cash. But considering the current economic situation generating income is tough.
The slippery slope of borrowing money
Many of us will agree that the COVID-19 economy in New Zealand has resulted in record-levels of government borrowing and Reserve Bank lending. Soon it may challenge the idea that we are supposed to keep those two things separate.
Property investors feel the pinch | COVID-19 Special Focus
Recently, a story popped up on the landlord section of an online property investment forum. The story is an extreme version of what we view as the risks associated with property investing. It was exacerbated due to Covid-19, but it's illustrative, nonetheless.
Gotta be right twice | Covid-19 Special Focus
In mid-January 2020, China was announcing confirmed human to human contact of Covid-19, locking down Wuhan province and building temporary hospitals. While many investment managers carried out daily operations, some had their eye on China.
Slashed dividends | Covid-19 Special Focus
Dividend stocks are a staple of every income investor, and they can play an important role in any portfolio, regardless of age and financial circumstances. But it is very much possible that dividend investors can fall into the trap of hindsight bias if they are not careful and sufficiently diversified.
Forward-looking | Covid-19 Special Focus
Do you find it confusing when a bleak economic report emerges from the press, only to be accompanied by a positive surge in the global share market? You're not alone. The last few months have produced many examples of a stark contrast between global market performance and economic indicators.
How to invest during a downturn | Covid-19 Special Focus
Over the past few weeks, we have been answering lots of money and market-related questions that members of our community have asked. Not surprisingly, a lot of the questions have had to do with the market volatility and how that can, or should, affect their investments.
Budget from the dark side of the moon | Covid-19 special focus
Budget 2020 is unveiled under the most challenging economic conditions since 1984 and with expectations from the whole nation that it will cushion the economy from the fallout from COVID-19, the stakes are surely high. This budget is seen as the voyager for our journey around the dark side of the moon.
Wild west of lending | Covid-19 special focus
LVR restrictions are one of the four macro-prudential tools used to help reduce risks with rising household debt. So, why would the RBNZ take LVR restrictions to the woodshed which could potentially push the household debt to newer heights when uncertainty abounds?
Ready and robust will thrive | Covid-19 Special Focus
As a nation, we did everything in our power to slow down the COVID-19 spread, and at the end of level 4 four weeks lock down, roughly 400,000 of us headed back to work. New Zealand is hopefully at the tail of the epidemic, and with single-digit new cases, we would likely move on from Level 3 very soon. So, what next?
