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Economic & Market Updates

Currency Union?

With the New Zealand dollar at close to parity with the Australian dollar, the topic of adopting a common currency has emerged its head again. Is it even logical to consider a currency union with Australia? Over the last twenty five years, periods of highs for the New Zealand dollar relative to the Australian dollar have only occurred spasmodically.

Debt Investing

In the early 2000’s, debt investing was the dominant form of investing for many New Zealanders with the exception of property investors. The two went hand in hand with much of the debt investing being associated with property. Both banks and finance companies were heavily into lending for property.

Regulation is designed to Enhance Trust

Prior to the regulation of financial advisers in 2011 just about anyone could put up a sign and call themselves an adviser. To obtain a share broker’s licence required filling out a form, obtaining sign-off from the Court Registrar and the payment of a fee. There was no requirement for any competency or qualifications.

Regulation was designed to give the public some confidence in financial advice and to get rid of the inevitable rat bags that seem to plague virtually all professions.

Winners and Losers in 2014

Over the past year the stand out performance area has been from shares with strong dividend streams. The share prices of listed property companies in general did very well. This is a trend that has continued for some time, and explains the popularity of Australasian Equity Income Funds. These types of investments can have a pretty wide investment mandate and provide a revenue stream typically well in excess of what can be obtained from bank deposits and a diversified range of bonds.

What Has Happened in the Market Place?

At this time of year many people look back and think about what has been happening during the year. In the investment world it is also common practice. Economy wise, things have been ticking over pretty well in New Zealand. But there is an elephant in the room which could have serious implications over the next couple of years, particularly in the provincial centres. This of course, is the decline in dairy prices.

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