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Economic & Market Updates

Has QE Driven the US Share Market?

International shares, especially US shares, have been a pretty good place to be invested in for several years. Most of this has been driven by the US share markets, which dominate the world shares.

We know that the US Federal Reserve (Fed) has embarked on three rounds of quantitative easing (QE). In the 1920’s this literally used to mean the printing of money. Now the reality is that the Fed bought back bonds and mortgage backed securities from banks and other financial institutions.

Adiós Air New Zealand

The recent announcement by Air New Zealand that they were abandoning flights to several regional towns has not endeared the airline to the public. This is not the first time that Air New Zealand has given up flying in the provinces.

In the mid nineteen eighties the mainstay of the domestic route was the Fokker Friendship which carried, depending on the model, around 46 passengers. From Auckland they flew to Whakatane and onwards to Wanganui and Wellington. They were the mainstay for flights to the provinces.

Free Trade Agreements

One of the major changes over time, particularly over the last few decades has been the freeing up of economies. The Treaty of Rome was the forerunner to the European Union. This created a large free market between the original members, with tariffs or quotas being imposed on goods produced outside the member states. Effectively the rules were set so the home teams had a significant advantage.

Gold – Is it a Saviour?

Whenever there is heightened volatility on share markets or debt markets, it seems that the debate about gold pops up. Gold is yet another one of those commodities that is traded in US dollars. It is natural then that when the US currency is not stable the gold price will fluctuate. If the US dollar falls, unless the gold price increases, the owners of gold will suffer a loss in their wealth if they live in a country that does not use the US Dollar as their currency.

Financial Literacy – Explaining Some Financial Jargon

This week is Money Week which is a joint initiative by the Retirement Commission, the FMA and the IFA (Institute of Financial Advisers). One of the major objectives of Money Week is to increase financial literacy. To achieve this there is a need to understand some of the jargon used. Of course, you do not need to understand all the terms to be a successful investor. To become a successful investor we would recommend that you also seek investment advice from an experienced authorised financial adviser.

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