On Point Craigs Investment Partners

Some women are apprehensive about investing, but there’s plenty of evidence they’re better at it than their male counterparts. There have been several studies conducted over the years, and many of these have shown that on average, women often achieve better investment returns than men. Women are more likely to follow tried and tested investing principles, while men often think they know better. Studies also show women trade a lot less, are more willing to stick to a long-term plan and are much more open to seeking advice. In contrast, men tend to overestimate their abilities, while they believe their more frequent trading will make them money (more often than not, all it does is cost them more in fees). Women are less likely to persevere with a losing position too long, and they don't tend to hold such concentrated portfolios. Women don’t have the monopoly on all these attributes, and there are plenty of sensible, level-headed male investors too. However, when considering these statistics it's surprising there aren't more women working in financial services!

It was the second good week in a row for global sharemarkets, with many continuing to rebound from the weakness we saw in April. Markets still see interest rate cuts on the horizon, with some comforting Federal Reserve comments and a softer jobs report adding to hopes last week. This week, the US consumer will be in focus as the University of Michigan consumer survey is due for release. We'll also get the latest Fed Senior Loan Officer Opinion Survey (SLOOS) on credit conditions, while monetary policy decisions are due in Australia and the UK. The US quarterly reporting season is about 80% complete, but some of the highlights this week will include BP, Disney, Ferrari, FMC Corporation and Nintendo. In New Zealand and Australia, earnings releases will be forthcoming from Infratil, Westpac and ANZ Bank.

If you buy a share or exchange traded fund (ETF) listed outside New Zealand, it’s not just changes in the share price that will determine your return. You also need to keep an eye on the exchange rate between the New Zealand dollar and the currency in question. While currency moves don’t have a significant bearing on long-term returns and at times they can help reduce volatility, over shorter periods they can have quite a big impact. Many local investors are happy to take on some currency risk, and the best way to think about this is to consider it an insurance policy against our small, vulnerable economy. However, if that worries you or if you dislike the idea of something else to try and predict, there are ways to mitigate the impact of potential changes. Holding a portion of your wealth outside our shores is crucial for New Zealand investors, and we shouldn’t let the prospect of currency movements dissuade us from taking opportunities in other markets.

After an April sell-off saw the US market fall 5.5% from its all time, the S&P 500 rebounded 2.7% last week, its best performance in almost six months. This came despite another hotter than expected inflation report, with the headline PCE (the Fed's preferred inflation gauge) increasing at an annual rate of 2.7%. Solid earnings releases drove the gains, and with 46% of the market having reported 80% of companies have beaten expectations. Most other sharemarkets followed suit, with the FTSE 100 in the UK rising 3.1% to a fresh highs and emerging market shares gaining 3.7%. This coming week is a very busy one, with some major US economic releases due as well as a Federal Reserve meeting. There's plenty happening locally too, with the ANZ Business Outlook survey for April due on Tuesday and the labour force report for the March 2024 quarter out on Wednesday. The unemployment rate is expected to rise from 4.0% to 4.3%, the highest in three years and well above multi-decade low of 3.2% from early 2022. Last but not least, there will be more international earnings releases to monitor across the world, with 175 S&P 500 companies scheduled to announce results.

Markets were volatile last week, with another stronger than expected inflation report in the US rattling investors and pushing out hope for interest rate cuts. Wednesday's release of our own consumer price index for the March 2024 quarter will be the key event here in New Zealand, with markets hopeful this will be fall further and open the door to Official Cash Rate cuts later in the year. Elsewhere, Federal Reserve speakers will be closely watched to see recent developments have changed their view, while the quarterly international reporting season heats up. More than 40 S&P 500 companies scheduled to announce results in the days ahead, with some of the highlights likely to be Bank of America, Johnson & Johnson, UnitedHeatlh, ASML, LVMH, Netflix, TSMC and Procter & Gamble.

Several sharemarkets hit new highs during the first few months of this year, but the most significant milestone of all came in Japan, where the Nikkei 225 index finally retook the level it reached 34 years ago in 1989. After a stellar performance in 2023 which saw the Nikkei surge 28.2 per cent, even outpacing the mighty S&P 500, Japanese shares rose another 20.6 per cent in the first three months of this year and stormed through those previous highs. The rally hasn’t been because of a weaker yen and massive stimulus alone. We’ve seen a notable increase in governance standards, while valuations also look reasonable even after the gains of the past 18 months. Perhaps most importantly of all, Japan is finding its way back onto the radar of investors. After being ignored for decades, these recent positive developments might see Japanese shares increasingly included in portfolios as a diversification opportunity following big moves in US shares.