Market & Portfolio Update - October 2018
Market & Portfolio Update - October 2018
Share markets continued their 2017 ascension during October, with a moderate 3% gain boosted further by the New Zealand Dollar falling 5%. For New Zealand investors, the fall in our local currency reinforces the diversification benefits of holding foreign investments, which rise in value when the currency falls.
While exchange rate changes have featured this month, the real story driving markets is global economic growth continuing to expand all around the world. This is one of the pillars supporting global share markets’ good performance since the start of the year.
With many investors globally remaining arguably too cautious about the current economic expansion, we have, in the vein of Warren Buffett, slightly increased funds’ global share investments during the month of October.
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.
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The global share market (represented by the MSCI World Gross Index) returned +1.4% in New Zealand dollar terms, despite many listed software companies facing pressure during the month. Investors are questioning how durable some software companies’ competitive advantages really are, as developments in artificial intelligence (AI) may make it easier to replicate their software. Nonetheless, the broader market tone was more resilient as investors continued to favour industries related to AI infrastructure.
Lifetime Book Club: The Almanack of Naval Ravikant by Eric Jorgenson
In a world that often confuses busyness with success and income with wealth, this book offers a different perspective. One that suggests true wealth is freedom. Freedom over your time. Freedom over your decisions. Freedom to live life on your own terms.