News & updates
Market Outlook
2020
2020 was looking better until a few weeks ago when the world was hit by the Coronavirus. We believe that activity will recover with no real economic loss if this only lasts for a short period.
AMP Wealth Management NZ has recently released an article on "What to do when markets fall?" We found page 3 particularly interesting and very relevant to majority of our clients.
Are you comfortable with your investments?
If you do tend to get concerned or anxious when markets drop, it would be a good idea to check that you’re in the right type of investments. Think about your investment time-frame, when you will need your money, how much risk you’re prepared to take on to get to where you want to be etc.
If you’re not sure about this, make sure you talk to your Financial Adviser (or seek the assistance of an Adviser if you don’t have one) who can assist you through this process. When an Adviser helps you put an investment plan together, it’s always based on your needs, whether they’re short or long term. Generally longer-term investment strategies mean that your portfolio may have a higher proportion of “growth” investments i.e. shares and property. Shares, in particular, can deliver much higher returns over the long term but the ups and downs of the market along the way can test your nerves. If you are finding that it’s too much to handle then have a think about your investment mix to make sure it’s right for you, e.g. would you be more comfortable if you were to reduce the amount you have invested in shares and instead invest this in things that are less prone to ups and downs?
The aim is to make sure you’re comfortable that your investments are appropriate to meet your goals whilst being able to handle the short-term ups and downs along the way. Understanding how your money is invested can help to calm the nerves. Generally, Advisers will recommend that you invest your money across a range of investment types and the amount you invest in each type will be determined by your investment goals, time-frame, and your attitude to risk etc. If you’re not sure, ask your Adviser to explain it to you.
Our message to clients is to trust the research & “hug” your risk profile. In a big picture sense, the fall in share markets should be seen as just another correction after markets ran hard and fast into record highs this year from their last decent correction into August last year.
On behalf of all our team at Trilogy Financial Solutions and S W Morris & Associates, we wish you a very Merry Christmas.
It has been exciting establishing Trilogy Financial Solutions which is now part of the WealthPoint Network and we are incredibly excited for what 2020 has install for us.
With the holidays coming up, we thought we’d share a little message…
Just like you, here at Trilogy FS, we love our presents, food and Christmas decorations. We also understand that it’s all fun and games until we overshoot our holiday spending. While we love Christmas, we want you to enjoy the gift-giving season without any guilt-ridden overspending. Don’t forget that once Christmas is over, you do have all those financial obligations of the month ahead – rent, bills, debt payments, school donations etc.
A few tips…
1) Make a list and stick to it.
2) Track your spending as you go and move amounts around when needed.
3) Don’t say yes to everything - It's ok to turn down the odd event here and there. This can end up saving you a small fortune over the holiday period.
4) Spend your time, not money.
Last but not least, enjoy this silly season.
Merry Christmas and a Happy New Year,
From the team at Trilogy Financial Solutions and our sister company – S W Morris & Associates.
It's that time of the year again!
Trilogy Octobermarket update
U.S. Federal Reserve cuts rates for first time since 2008
Last week U.S. Fed cut rates to prepare the US economy for “downside risks”. The US Federal Reserve has cut its key Fed Funds cash rate by 0.25% to a range of 2-2.25% on the 1st of August. The rate cut is the Fed’s first rate cut since December 2008 and follows nine 0.25% rate hikes between December 2015 and December last year.
US growth is slowing but not to recessionary levels. Trade is the key issue in the US. President Trump’s application of tariffs to combat Chinese imports won’t work and is more a political ploy for his voting support base ahead of the US election in 2020. The reason tariffs won’t work is that they will only make it more expense for the US consumer who will be paying 25% more on goods out of stores such as Walmart, slowing spending therefore further slowing the US economy. It is highly likely once we’re in the run-up to the US election next year Trump will provide relief to the US – China trade crisis and come to an agreement with the Chinese
In summary rate cutting cycle tends to be good for markets however this should be balanced with current downside risks around the world. Here’s more comments on Fed Chairman’s Powell “midcycle adjustment”
Reserve Bank cuts NZ OCR to a record low 1.0%
On Wednesday this week, the Reserve Bank of New Zealand (RBNZ) announced a rate cut of 50-basis-points to a record low Official Cash Rate (OCR) of 1.0%, citing "heightened uncertainty and declining international trade" and low inflation. Economists are praising the Reserve Bank's "proactive" move to slash interest rates.
Following the Fed Reserves rate cut last week other banks around the world have been dropping their cash rates too - India and Thailand slashed theirs on Wednesday - in a bid to boost spending and protect local economies from the worst effects of declining international trade.
So, what does this mean for you?
The banks have followed suit – In terms of debt, ASB was first to announce cuts to its variable, Orbit and 2-year fixed rates, and has since been joined by ANZ, BNZ, Kiwibank and Westpac. While this move means now could be the time to buy or at least review your current mortgage, it also means less money for cash savers.
The RBNZ has said that the cut is to encourage additional spending from households, businesses, and the government, to meet inflation and employment targets. While fixed interest investments are now less appealing, falling interest rates are generally positive for shares. They help boost economic and profit growth and make shares relatively more attractive than cash.
With the cost of borrowing at an all-time low, the Government has been told to seize the moment and invest in New Zealand's ailing infrastructure.The Reserve Bank's "stunning" cut to the official cash rate means it's a very good time to invest in New Zealand, according to Finance Minister Grant Robertson.
SkyTV Interview featuring Steve Morris
Recently Steve was interviewed by SkyTV for an article on growth of junior girls cricket in NZ.
“Being the father of 3 daughters who have all played for Cornwall Cricket Club, I am very proud to be a part of the growth over the past 10 years in junior girls and women’s cricket in Auckland."