Global events update

Recent developments in the Middle East have been unsettling for many around the world. It’s hard not to feel for the families and communities directly caught up in the conflict. Our thoughts go out to all those affected.

When the world feels this volatile, it’s normal to look at your own situation and investments and wonder, "Am I okay?"

We want to take a moment to talk through what’s happening and why good quality investments and retirement strategies/plans are built for exactly these moments.

What’s happening with the markets?

Much of the talk right now is about the Strait of Hormuz.

Because so much of the world’s oil passes through that one spot, any tension there makes the global market nervous. The strait also plays a huge role in global logistics, and disruptions can affect industries dependent on transport, such as airlines.

You might see:

• Higher prices at the petrol pump.

• Volatility in the share market.

• Headlines about the possible effect on inflation and interest rates.

While New Zealand might feel far removed from the situation in the Middle East, when global prices move, we feel the ripple here.

Why there’s no need to react hastily

It’s uncomfortable to see portfolio values fluctuate in the short term. But history shows us a very consistent pattern: markets react sharply to bad news, but they almost always find their footing again.

The above graph illustrates how a balanced portfolio (60% growth assets, 40% income assets) would have grown over time since 1975, despite the global events that occurred during that period.

Good quality portfolios are designed with "shock absorbers" already built-in:

• Our portfolios are well-diversified, with investments spread across different countries and industries.

• We maintain cash and conservative fund buffers. Most of our portfolios have a portion allocated to more stable investments to help absorb short-term hits and maintain cash flow for those drawing from their portfolio.

• We partner with experienced, high‑quality fund managers who select strong, resilient companies designed to withstand a wide range of market environments.

• Most peoples' goals haven't changed. We build plans based on a goal-based investing framework. We’re looking at where clients want to be in 5, 10, or 20 years, not based on what happens this week.

Our advice? Stay the course.

When things feel chaotic, the urge to "do something" is strong. But making quick changes during a dip usually just turns a temporary "paper loss" into a permanent one.

We recommend not looking at your investment values on a daily basis. Frequently looking at your investments can lead to emotional decision-making, such as panic-selling during dips or overconfidence during rallies, which hurts long-term returns.

The key is to keep calm and stay the course. Markets have been through countless events before, and diversified, well‑constructed portfolios are built to navigate them.

We’re here if you need us

If you’re feeling uneasy, please give us a call. We’re happy to talk to you, discuss your situation, and help you manage your investments with the right frame of mind.