Market & Portfolio Update - March 2021
For The Financial Year Ended 31 March 2021
The March market update reflects a theme of ongoing strength in global sharemarkets, but weakness in assets whose value is mainly driven by changes in long-term interest rates. Overall returns for the year ended March have been very strong, despite some recent drag on portfolios with high allocations to fixed interest securities (bonds). These have seen some weakness as long-term interest rates have risen, and a little softness in NZ shares lately.
The first quarter also saw the anniversary of the fastest market correction ever seen - during February and March 2020. The subsequent 12-month returns for many asset classes reflect the sharp recovery from those lows, providing a vivid reminder of the merits for a disciplined long-term investment approach.
Central banks and governments are committed to continuing their support for the global economic recovery for some time, thereby keeping short-term interest rates very low and fiscal policies expansionary. This provides investors with both unprecedented challenges and opportunities, “the risk is to search for yield in all the wrong places”. Financial research company DALBAR, has attempted to quantify the effects of poor behavior on investors’ long-term returns. According to their 2016 study, the average individual investor underperformed the broad share market by 2.89% over the past 20 years. The lesson of course is to work with an Adviser who understands your goals and can keep you on track.
Unlocking Financial Harmony: Navigating the Symphony of Life with Mindfulness
In the hustle and bustle of daily life, the concept of mindfulness often finds its place in discussions about mental health and stress reduction. However, its impact on financial wellbeing is a hidden gem worth exploring.
A 2021 survey by the New Zealand Retirement Commission ranked New Zealand’s overall financial wellbeing as 61 out of 100. In this case, financial wellbeing is defined as “a combination of meeting commitments, being financially comfortable, and resilient for the future.” The area in which New Zealand scored the lowest was preparedness for retirement, with a 43 out of 100 which highlights that around one in three New Zealanders are concerned that they will not have adequate savings to last through their retirement.
Finding Your Financial Ikigai: The Japanese Art of a Balanced & Purposeful Life
In a world that often measures success in financial terms, the Japanese concept of Ikigai offers a refreshing perspective. Transcending the boundaries of culture and geography, this philosophy loosely translates as "a reason for being". Ikigai is a convergence of what you love, what you're good at, what the world needs, and what you can be paid for. It's an approach that represents a broader view of prosperity, encompassing joy, purpose, and contentment. As financial advisers, we find this particularly compelling. This article delves deeper into how Ikigai can not only enrich your life but also inform your financial decisions for a more fulfilling journey.