As a topic of conversation, investment is like sports. Everyone has an opinion. And the strongest opinions often come from those who spend more time in front of the TV than out on the field. Practitioners, meanwhile, are wary of anything labelled a sure thing.
Investment fads are nothing new. When selecting strategies for their portfolios, investors are often tempted to seek out the latest and greatest investment opportunities.
Making sensible investment decisions is difficult. We are subject to a range of behavioural biases. We have to cope with incessant noise around financial markets. We behave in ways that are inconsistent with our long-term investment objectives. So, what can we do about it?
Finance journalists tend to write lots of articles about industries or sectors because these stories fit a current narrative. In the tech stock boom, it was the information revolution. In the mining boom, it was the rise of China.
Although financial markets are awash with randomness and uncertainty, there are obvious, vital and, often simple, cues that as investors we seemingly choose to ignore or disregard. This results in poor choices and often disappointing outcomes.
We'd all love for the market to go on a tear forever, reaching record highs and blowing minds; but the truth is, downturns are a reality, particularly if you are a long-term investor.
One old adage about investment is that you buy a bunch of reliable stocks, stick them in your bottom drawer and forget about them. That ignores one pesky fact: nothing stays the same.
Go back to the 1995 film, Clueless. After a driving lesson goes terribly wrong, the valley kids are almost squashed by a tractor-trailer, harassed by a motorcycle gang, and given the finger for driving too slowly by old people. If only they had remained in their comfort zone and taken their lesson on quiet residential streets rather than a 12-lane highway!
New Zealand's house prices have been ranked the most overvalued in the developed world behind only Hong Kong. The Kiwi housing market was also deemed to be the fifth most at-risk among OECD nations, according to an Oxford Economics report.
There's been a lot of noise in TV & print media finance reports in the past one month. But have you ever wondered that if there are so many sellers out there, who is buying?
In almost every area of life – whether it's marriage, the workplace, or taking care of our health – we are often our own worst enemies. The realm of personal finance is no different. What's the biggest threat to achieving financial independence? Unfortunately, it's your own brain.
The Tarzino Trophy Daffodil Raceday on September 1 launches Group 1 racing for the season, bringing the big guns of New Zealand racing to Hastings, to battle at one of the country's stellar racing events.
The Financial Markets Authority released its annual survey into the public’s attitude to financial markets. The survey highlights that the least understood investment types are those associated with high risk and 80% of respondents aged 18-29 have a KiwiSaver investment.