Top tips to handling your wealth management investments in 2019
As seen in every past New Year, we are exposed to new predictions for how well different investment markets will perform, and what new assets we should invest in. With popular press towards many specified funds, assets and markets, an increased amount of noise is created and will continue to be prominent. This can often create more trouble than it is ultimately worth. Studies completed by Investment management company ‘Dimensional’ show that stocks are primarily based on chance. This means funds that have previously taken top rankings are not guaranteed to continue with this pattern.
For example, a study completed by Dimensional looked at the performance of the top 25% of funds from a three-year duration, over a 12-year period ending in 2014. On the completion of this study they discovered that only 26% of these funds from the top quartile of the world markets went on to repeat a high ranking during this period. Therefore, when choosing your future investment options do not to rely on previous performance results. Dimensional Fund adviser’s executive chairman David Booth emphasises the importance of remembering the prediction of rise or falls in stocks is an almost impossible task. This raises the question; why get involved and place your current investments at risk? Booth notes that there are never any guarantees when investing in different stocks or markets. Investors must feel like they are okay through both good and bad times in order to stay on track with their goals and remain successful.
Throughout 2019, it would be fair to assume that noise within the investment sector will continue to increase. It is critical during this time not to be distracted from your pre-planned long-term goals and objectives. While there is a lot of market volatility, there is plenty of opportunity, so it is critical you stick to the plan in action. If you do not have a financial plan now is a very good time to establish one. Moving into the new year it can be an opportunity to set yourself sensible solutions to help you maintain a level head through tough times so you can benefit from the good times that may be ahead.
The Financial Architects Investment committee meet on a regular basis to ensure your portfolio and wealth management goals benefit from the market conditions in action.
During market volatility, it is important to take advantage of lower asset prices and we therefore inspire you to review the level of contribution made to your KiwiSaver investment portfolio. It may be appropriate to increase the amount you invest from 3% or 4% to 8% of income but only in consultation with your adviser. In addition, if you have increased cash flow surpluses or additional lump sum funds for investment, you should speak with your adviser to gain guidance as to whether you invest further in this market environment.
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