Archive | Investment

Market Volatility

Understanding Market Volatility

Understanding Market Volatility Volatility in the share market is both a threat and an opportunity. It is a threat for people who don’t understand it and an opportunity for those who do. It is something to be welcomed. Without volatility there would be no capital gain. There is a natural process at play in market […]

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Ladder

Fixed Interest Ladders for Peace of Mind

Fixed Interest Ladders for Peace of Mind Managing money to cover short term needs can be challenging. Money needs to be available at the right time while still earning a reasonable rate of interest and without taking too much risk. Added to these issues is the uncertainty of which way interest rates will go in […]

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Egg Basket

Eggs in Baskets

Eggs in Baskets Time and again, despite knowing that putting all your eggs in one basket is a bad idea, investors lose money by chasing high returns or taking a gamble on a supposed ‘sure bet’. In the current environment of low returns, it is very tempting to look for opportunities to increase returns. This […]

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Why Investors Shouldn’t Read Headlines

Why Investors Shouldn’t Read Headlines There is nothing like a sudden drop in the share market to send investors into a panic. It is easy at the time of investing to be full of confidence and classify yourself as someone willing to take risk in exchange for the potential of a higher return. However, when […]

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Balance Your Assets

Balance Your Assets Assets are things of value that you own, such as your house, the contents of your house, your car, your investments and, if you have one, your business. Some assets are better at generating wealth than others, and some assets drop in value over time, thereby reducing your wealth. Assets should be […]

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Fear

The Impact of Fear

The Impact of Fear The impact of the turmoil in Greece on share markets is a classic example of how the emotions of fear and greed create volatility. When shares start to drop in value, investors can become fearful of sustaining further losses. This leads to panic selling which further fuels the fear. Eventually a […]

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Investment Risk

Investment Risk The definition of investment risk is not the probability of losing money, but the probability that the investment outcome will not be what you expect. Risk therefore includes volatility as well as loss. Psychologists have shown that investors put more weight on the pain associated with a loss or drop in value, than […]

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currency

Currency Risk for Investors

Currency Risk for Investors Investing offshore helps to spread risk because not all markets around the world move in the same direction at the same time. Diversification between markets offers the opportunity to reduce risk and improve return, however along with this opportunity comes the risk associated with fluctuations in exchange rates. These fluctuations have […]

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Why Investors Make Bad Decisions

Why Investors Make Bad Decisions Many people complain they have bad luck when it comes to investing in shares. While luck may certainly play a part, more often than not the problem is one of bad decisions about buying and selling. Underlying the bad decisions are psychological factors, the study of which is termed behavioural […]

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Fool

The Price of Ignorance is Low Returns

The Price of Ignorance is Low Returns A recent survey conducted by Colmar Brunton for the Financial Markets Authority shows that many New Zealanders do not understand investment risk. The survey results paint a picture of investors who show a reasonably good understanding of more conservative investments which offer security and a reliable return but […]

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The Impact of Rising Interest Rates

The Impact of Rising Interest Rates The Reserve Bank’s recent increase of the Official Cash Rate (OCR), albeit a small one, heralds the start of a new cycle in interest rates. The outlook for New Zealand economic growth is good, thanks to construction in Christchurch and a buoyant export sector. As the economy grows, interest […]

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AppleOrange

Apples and Oranges

Apples and Oranges There is a plethora of options available for investors wishing to place their money in a managed fund or portfolio. Differences in the way fees are charged and returns reported have made comparisons between funds akin to comparing apples with oranges. A simple approach for investors is to compare investment funds based […]

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