You will all have heard in the news about the current market conditions in Greece and China and what some say the impact will be on investing kiwis.
This has been brought about by weaker economic data that was lower than expected and causing a change in business confidence.
This will bring further volatility to the markets and in turn prices of the assets you own in the capital markets will fluctuate more so than what they have over the last 6 years. In fact the last 6 years has seen very good returns from global share markets.
At Financial Architects we have a strong conviction that there will not be global deflation issue because we view the US economy as robust and as a result, we may be moving into a phase where markets become less reliant on policy stimulus and more focused on economic fundamentals and company earnings. That will be excellent from a investing point of view and in forecasting future values of assets.
This leads nicely into how we are building your OneAnswer portfolios and monitoring your KiwiSaver investments. We will and have chosen quality companies that provide strong fundamentals that include, sustainable earnings, low debt to assets, a diversified stream of income, efficient use of assets in producing profits and in turn good dividend to shareholders.
In summary, companies that are ‘financially well’.
In addition to direct investing in shares and bonds, we have recommended very experienced fund managers within your investment portfolios, who have seen many economic events and have utilised volatility to make gains and at the same time ‘hedge’ against capital loss.
Our investment approach has not changed as a result of the above news or the volatility in the markets.
We emphasize the importance of broad diversification, efficient portfolio design and execution and consistent asset class exposure as the more reliable means of capturing ‘value’ opportunities and increase possible returns over time. Markets do reward discipline and ‘staying on track’, through these times.
The reason why Financial Architects have built your investment portfolio the way we have is to withstand and benefit from market volatility. Of course, these investments are for the long term and therefore that’s the focus from here and would ask you employ the same emotion.
Yes no doubt there are some of you that are uncomfortable with the market uncertainty but do rest assured the investment team here continue to be vigilant and proactive on a daily basis, in managing your invested capital and wealth.
With any downturn in market asset prices there are opportunities to buy further in to strong companies, at low and undervalued prices (dollar cost averaging).
That’s exactly what is happening with your regular KiwiSaver contributions and the capital allocation in your OneAnswer portfolio.
If you have any questions at all, please do not hesitate to contact us to discuss further.