We hope you’ve had a nice break and are looking forward to a different year to the one we’ve just had!
I am optimistic about this year and how that will have a direct and positive impact on Goodlife’s clients.
I wanted to share my thoughts in regard to 2020 and what lies ahead specifically in the share markets and NZ residential property.
- In March 2020 I said there was probably no better time to buy shares. Share markets were priced at levels not seen since the Global Financial Crisis (GFC). At the time, to some it was unthinkable that markets would now be trading at record highs. This highlights the forward-looking nature of markets.
- Given low interest rates coupled with economic stimulus (governments the world over, including NZ’s, pouring money into their economies and local infrastructure), we expected from March 2020 a 3-4 fold gain in shares over the next five years, just as we saw after the 2008 GFC and following the 2000 Tech Crash.
- As at the end of December 2020 the average Goodlife KiwiSaver client had received a return of approximately 30%, compared to the NZ market of 15%, and International markets of 13%.
I’ll re-iterate something I’ve told you all – the protection of our clients’ capital is as important as the growth. So, as we review 2020, Goodlife & NZ Funds Management achieved our number one goal of protecting clients’ capital in a large market drawdown while fully participating in the market rebound.
We continue to identify opportunities for investors.
The availability of vaccines leading to a normalised global economy will dictate global share markets in 2021. It also helps that Biden will more than likely have a calming effect on the markets than his predecessor (and that’s all I will say on that!).
We have positioned client portfolios accordingly and will continue to work hard in conjunction with NZ Funds to make sure your portfolios react to market conditions. On that subject, our clients in the NZ Funds Advised Portfolio Service will soon hear from us in relation to reviewing your portfolios.
Please feel free to read the market report released recently by NZ Funds. It makes for some positive reading! CLICK HERE
Well, what can I say? Outside of all the media hype, the fundamentals leading to house price gains in NZ are strong: Low interest rates – a lack of housing – inability to fill that demand – not enough skilled trades people to build the houses – population growth – the fear of missing out.
And, of course, the desirability of NZ on the world scene for people wanting to move here and live in the Land of the Long White Cloud. When borders open we will see people expedite to relocate to NZ.
What do you think that will do to house prices? Hmmm…. Not hard to understand why ‘they’ are saying we are at the beginning of the next 7-10 year housing cycle in NZ.
We of course have our network of property providers secured and ready to meet our demand. Our clients circumvent the need to fight with the open market when it comes to finding, analysing, and buying investment property.
We would like to thank all Goodlife clients who have been on the 2020 journey with us. We view our role as your Financial Adviser as a privilege and we are humbled by the trust you place in us.
We look forward to advising you, your colleagues, family & friends over 2021.
2021 – We are ready for you!
Director / Authorised Financial Adviser
Goodlife Financial Advice