Approaching Christmas on a High Note
December is upon us and with Christmas approaching, many are thinking about Christmas celebrations, catching up with friends and family, and holidays to the beach. Another reason to cheer is that if we look back over 2019 global economies have continued to expand, businesses have continued to grow, and global share markets have risen over 20%, well above the average historical yearly return of around 10%. However, far from being unusual, a yearly performance of 20% or greater has occurred one third of the time.
The illustration below shows the US share market’s annual performance going back to 1871. Dividing the years up by performance shows how often 20%+ returns happen! Interestingly while the average performance since 1871 is 10% only two years (1899 & 1993) have actually had a return of 10%!
As we think about the 2019 year in review, there has been a lot of news about trade uncertainty, geopolitical concerns, and slowing economic growth. Despite all of these things, the global economy still looks likely to have expanded in 2019 by US$3 trillion to an estimated US$88 trillion. This growth in the world economy continues to be supported by trade, consumer spending and company earnings.
Following last year’s modest decline, this year’s strong gains are a good illustration of the value in ‘staying the course’ during the occasional periods of shorter-term weakness that come with long-term investing. While performance in 2020 may be above or below the long-term averages, the broad economy is likely to continue to support markets growing over the long term. In this light, the Christmas break is always a good time to reflect, and an opportunity think about your long-term financial objectives. This is something your financial adviser is well placed to help with - having a plan written down will leave you assured that you are on track to meet your goals.
Disclaimer: This article has been prepared for the purpose of providing general information, without taking into consideration any particular investor’s objectives, financial situation or needs. Any opinions contained in it are held as at the report date and are subject to change without notice.
Market & Portfolio Update - April 2022
Global share markets continued their choppy start to 2022 during April.For New Zealand based investors, a fall in the NZ dollar played an important role in helping offset the volatility global share markets experienced. The NZ dollar fell against most major currencies supporting the returns of unhedged overseas assets (assets that are free to move with exchange rates). As a result, ‘unhedged’ overseas investments fell by only 1.8% for NZ based investors.
The KiwiSaver Gender Divide – Why are women saving less and what can be done to combat this?
Recent data shows that, on average, women have 20% less in their KiwiSavers than men. The gap being at its largest between men and women in their 40s and 50s. There are a few factors that come into play causing this divide and although it will take years to achieve equality, there are ways in which we can be proactive to help close the gap. As of August 2021, the gender pay gap is at 9.1% in New Zealand, a decrease of about 0.4% from 2020’s stats.