Monetary policy will remain in focus this week, with the minutes of the last Federal Reserve meeting due for release as well as the ECB's account of its January meeting. Flash PMIs are out on Thursday in most of the major economies, and these will provide useful insights into how economic activity is tracking this year. Locally, retail sales will be a highlight on Friday, while we'll see the results of the latest dairy auction midweek. The earnings season gets going on the NZX this week, with...

The US market has had a stunning run over the past year or so. The S&P 500 index peaked in January 2022, before declining 25.4 per cent over the following nine months in the wake of rapidly increasing interest rates. Since those October 2022 lows, the market has rebounded 40.5 per cent. In recent weeks it’s surpassed the peak from two years ago, moving past 5000 points for the first time. Against that backdrop, is it too late to invest in US stocks?

What a week! We saw the S&P 500 sharemarket index in the US rise another 1.4%, closing at a fresh record high and pushing through 5000 points for the first time. There was also plenty of action in New Zealand, as wholesale interest rates rose to a three-month high on the back of strong economic indicators and a bold OCR call from the ANZ economics team. The Reserve Bank will be in focus this week, while the international reporting season continues and some local companies will get in on...

Bitcoin took a big step forward last month, with the Securities and Exchange Commission in the US finally giving approval for exchange traded funds to begin trading on the sharemarket. BlackRock’s iShares Bitcoin Trust (IBIT) quickly emerged as one of the favourites, passing US$1 billion in investor inflows within just five days. This trend could well continue, and there could be a large pool of new money that’ll flow into these funds. For some looking to dip their toes into the world of...

The S&P 500 in the US rose another 1.4% last week, closing at fresh highs on the back of impressive earnings releases (including a very strong one from Meta) and robust economic indicators. The US market has started the new year where it left off in 2023, having gained 4.0% barely a month into 2024. Other sharemarkets performed well, with the Australian ASX 200 posting a very strong gain of 1.9% and also finishing last week at a new record high, while the local market was solid with the...

It’s starting to look like the US Federal Reserve might’ve done the impossible (or at least the very rare) and achieved a soft landing. If that’s the case, there’s no need for these high interest rates to overstay their welcome and cause an unnecessary recession. For investors, this would make for a much more attractive backdrop. It could mean markets perform better than many expect from here, and that the long-awaited collapse in prices some have been calling for might not come. If that’s...

Last week was a very good one for world sharemarkets. The S&P 500 in the US posted a 1.1% gain, having hit a new record high this month as inflation and economic indicators added to confidence a soft landing can be achieved. European shares surged 3.2% last week, the UK market rose 2.3%, and the Australian ASX 200 posted a 1.8% gain. The local market also had its best week since early November, with the NZX 50 gaining 1.8%. Looking ahead, this coming week is shaping up as a very busy one....

Short-term deposits are offering great value right now, but don’t get too content. Within six months interest rates could be headed lower, and after the first cut they’re likely to keep falling. If that happens, investors will be facing much less attractive reinvestment rates and a rapidly declining income stream. By the second half of this year, money could be moving back toward other assets amidst falling deposit rates. Rather than waiting for the herd to catch on, savvy investors might...

This is our final New Year encore episode before we're back into the swing of things next week, and this one was a personal favourite of ours! Between 1900 and today, US shares have returned 9.8 per cent per annum (including dividends). That means an investor has, on average, doubled their money every 7.4 years. That’s a recipe for wealth generation, and an excellent way to ensure your capital grows more than inflation (which has been three per cent per annum over that entire period) and your...

Should I pay off the mortgage faster, or use that extra cash to invest? This is a very common question, but it’s especially relevant today. Mortgage rates are at 15-year highs, with borrowing costs at levels many homeowners won’t have experienced before. Paying down the mortgage as quickly as you can is sensible, and it’ll set you on the path to financial freedom. However, it’s not black or white and using some of that spare money to invest along the way will also pay off.

When is a five per cent return no return at all? The answer depends on the inflation rate, and if you're keeping pace with the cost of living. In this encore episode from April 2023, we'll explain the difference between nominal returns and real returns, why investors need to be mindful of the difference, and how we need to invest to ensure we grow their capital over the long term.

Welcome back to On Point in 2024. In our first new episode of the year, we'll ponder some of the key questions investors are asking themselves at the moment. Will interest rates finally start to fall, can the housing market rebound continue, and how will sharemarkets both here and offshore perform in 2024? Let's discuss and debate some of the potential answers.

If you’re lucky enough to have a bit of surplus cash at the moment, it’s a difficult time to think about putting it to work. You want your hard-earned capital to work productively, but it’s scary to think about venturing into financial markets (or any asset class, for that matter) with your savings. Jumping in boots and all could be unwise, while sitting back and waiting for perfect conditions to emerge can also backfire. In this popular episode from 2023, we discussed some of these...

This was a popular episode from 2023, and its messages are still very relevant for newer investors, as well as those with more experience. Take a listen if you missed it the first time around, or simply remind yourself of these timeless investing concepts! One of our least favourite sharemarket analogies is when it’s said to be just like a casino. While some traders might treat their portfolio like a sports betting account, for genuine investors this comparison couldn’t be further from the...

2023 is done and dusted, and while it was challenging at times, as well as eventful, it ultimately proved to be a very lucrative year for investors. Some of the key stories included faster than expected declines in inflation, an interest rate rollercoaster, and the emergence of AI as a prevalent market theme. Join us to reflect on all of this and more in this episode that details asset class returns and recaps some of the biggest market events of the last year.

Markets are set to end the year on a high note. The S&P 500 in the US has rallied 22.9% this year and is within 2% of its record high from January 2022, while the local NZX 50 has increased for seven consecutive weeks, its longest winning streak since 2019. Interest rates fell sharply last week, buoyed by signs central banks are done and could be cutting interest rates within six months. In our final "The Week Ahead" episode for 2023, we'll discuss all of these things as well as what to...

We’re on the home stretch, and 2023 has been a surprisingly good year for investors. Conservative assets have returned to form with a five per cent gain, while world shares have also been strong, returning almost 20 per cent, which is well above the long-term average. In contrast, the local sharemarket has been a notable laggard, with the NZX 50 flat with just two weeks to go. Looking ahead to 2024, there are some obvious positives, such as the prospect of further declines in inflation and...

Last week was another good one for investors, with shares and fixed income rising further. The S&P 500 in the US posted a 0.2% gain, finishing at its highest level since March 2022, while the local NZX 50 rose 1.1%. Not only was that the sixth consecutive weekly gain (the longest winning streak in more than a year), but it saw the index move back into marginal positive territory on a year-to-date basis. The coming week is a very busy one, as the end of the calendar year looms. Central...

November lived up to its name as a very good month for investors. World shares were up 9.3 per cent, the best return in three years. The S&P 500 in the US rallied 8.9 per cent and the local NZX 50 posted an impressive 5.3 per cent increase, the biggest monthly gains for both indices since July 2022. It wasn't just shares that had a great month, with conservative assets getting in on the action too. US bonds had their best month since 1985 (with a 4.5 per cent rise), while the NZX...

November lived up to its name as a very good month for sharemarkets around the world, with the S&P 500 rallying 8.9% and the NZX 50 posting an impressive 5.3% increase. Those were the best monthly gains for both indices since July 2022. It wasn't just shares that had a great month in November, with US bonds posting the best monthly performance since May 1985 (+4.5%) and New Zealand corporate bonds enjoying their strongest monthly gain in at least 20 years. Let's talk about all of that, as...

Shares have delivered impressive long-term returns. The US is the biggest market in the world, and its long history lends itself well to analysis. Between 1900 and today, US shares have returned 9.8 per cent per annum (including dividends). That means an investor has, on average, doubled their money every 7.4 years. Not bad at all. That’s a recipe for wealth generation, and an excellent way to ensure your capital grows more than inflation (which has been three per cent per annum over that...

There's no shortage of things to watch this week, with Wednesday’s Reserve Bank meeting (which is the last of the year) likely to be the main event. Nobody is expecting any change in interest rates, but the updated projections in the accompanying Monetary Policy Statement will be very important. There will be plenty of corporate earnings releases to monitor across the New Zealand market too, including interim results from market heavyweights Fisher & Paykel Healthcare and Ryman...

Should asset sales be a topic up for discussion? We’re carrying higher debt than in the past, while our creaking infrastructure ensures there’d be no shortage of uses for the funds raised. Demand from investors wouldn’t be a problem, as our small sharemarket has limited options to satisfy the steady stream of KiwiSaver money that rolls in each month. The mixed ownership model has been a huge success in New Zealand, providing the best of both worlds to the taxpayer. It’s fostered stronger...

US shares had another very strong week, with the S&P 500 rising 2.2%. The index is up 7.6% in November and on track for its best month in more than a year. The NZX 50 in New Zealand was more subdued, although it still added 0.3% for its third consecutive weekly gain. The local market has rallied 3.9% this month, on track for its best performance since January. Looking ahead, it will be a holiday-shortened week in the US, with markets closed for Thanksgiving on Thursday. There will also be...

Many principles of investing are considered compulsory, and one of these is the need for diversification. It can mean spreading your capital over different asset classes, such as bonds and fixed income as well as shares and real estate, or ensuring you own a range of companies across multiple regions and sectors. Being diversified protects you from the risk of major losses, just in case something goes wrong with one of your individual investments or holdings. Let's talk about the basics of...