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World sharemarket ups & downs

Changes to the equity market can lead to investor concern.  However, your financial goals and aims have probably not changed in the last week, and the plans that are in place to achieve those goals have probably not changed either. These plans are based on your circumstances and where they are medium or longer term in nature, they consider some market variability. 

Yesterday AMP Head of Investment Strategy, Keith Poore, released an InsightPaper on this topic and we invite you to click this link to review this article.

What would you do with $10,000?

Applications for AMP Scholarships 2015 are now open, and this year AdviceFirst is proud to be offering a People’s Choice scholarship in the Wellington and Canterbury regions! So it's time to start thinking about doing your thing and helping others do theirs. Check out what’s new this year.

Get inspired.
From New Zealand’s most renowned footwear designer, to world BMX Champ, AMP Scholarships have helped more than 160 passionate Kiwis take on the world, in association with businesses just like AdviceFirst. Take a look at what some of our previous recipients have to say, and share the video with people you think should apply.

A brighter tomorrow starts today.
To apply for a People’s Choice scholarship offered in Wellington and Canterbury, all you need to do is click ‘Apply’ at doyourthing.co.nz and select your preferred region from the dropdown box. All AMP National and AMP Study Start applicants will be eligible to apply for a People’s Choice Scholarship.

Applications close 18 September 2015. If there’s someone you know with brilliant potential, then forward on this email, and encourage them to apply today.

Best of luck, and dream big!

The AdviceFirst team.
Do your thing. For a better tomorrow. doyourthing.co.nz.

How social media use could affect your finances

The digital age has changed how people obtain information when making financial decisions, but personal advice is still important when getting the best outcome for you, your family and your business. You need to take personalised financial advice from a qualified Adviser or you may end up getting the wrong advice.

AMP's Director of Advice and Sales Blair Vernon appeared on the Paul Henry show recently talking about social media and financial advice.

"When it comes to social media often you’ll get wacky advice. The internet is a great information source and allows you to compare a lot of information. There are also lots of resources there to make and form decisions."

To watch the full interview with Blair click here.

Personal Insurance - tomorrow's plan your family will thank you for

One of the first things people do when they buy a car or a house is get it insured, but when it comes to personal insurance, Kiwis are a little more cavalier.

The challenge is that it’s not exciting to talk about life insurance, and the reality is that no one likes to talk or think about bad things happening to them or their family, so they put it off until next week. But next week may be too late.

AMP's Director of Advice and Sales Blair Vernon appeared on the Paul Henry show recently to discuss personal insurance.

“The best thing you can do is to go out and find an Adviser and work out what you need to do – today,” says Blair.

A good way to think about it is by calling it 'tomorrow's plan'. If something happens tomorrow, what do you have in place now that will look after your family then?

To watch the full interview with Blair click here.

Why having a will is so important

While mortality isn't something many of us like to consider too often, regardless of how old you are, having your personal affairs and plans in place in case the worst-case scenario strikes is just a smart idea.

AMP's Director of Advice and Sales Blair Vernon appeared on the Paul Henry show recently talking about wills. 

"I think waiting to have children to make a will is a bit old-fashioned. It should be as soon as you are independent and take care of your own affairs. You have got to command your mortality. Unfortunately a lot of people don't attend to them until it's too late."

To watch the full interview with Blair click here.

Another Solid First Quarter For Diversified Investors

The first quarter of 2015 has been another solid one for diversified investors. The start of the year is looking like 2014 déjà vu as US first quarter growth has come in weaker than expected, central banks have eased more than expected, and bond yields have moved lower while equities have rallied.

The key theme for investors last quarter was the divergence in monetary policy expectations. The European Central Bank (ECB) and other central banks have eased more than expected while the US is still on course to commence rate hikes. This has driven the US dollar (USD) higher and most other currencies lower. Because the US Federal Reserve (the Fed) has trimmed its expected policy tightening the net effect has been lower US bond yields as well as lower global bond yields. An unprecedented level of quantitative easing, lower rates and lower oil prices have been a boon to share markets so far, especially Eurozone and Japan shares. Eurozone shares are also benefiting from a pick-up in growth and the long-heralded recovery in earnings.

New Zealand share returns have also been healthy with reasonable earnings and higher dividends contributing to the positive economic backdrop. Following a relatively weak 2014, Australian shares started the year well. A lower Reserve Bank of Australia (RBA) cash rate, combined with a weaker currency and increased dividend payouts, are all playing a part. Commodities continued to decline in the first quarter on rising inventories in key sectors and generally softer China data, but it looks like oil prices may have found a bottom at current levels. The stronger USD saw the New Zealand dollar (NZD) modestly lower against the MSCI-weighted basket of currencies over the quarter, but this masks strong gains against the euro, yen and Australian dollar (AUD).

The outlook for the global economy continues to be best described as “uneven”. Despite a weak start to the year, underlying economic fundamentals continue to improve in the US. That should see the US along with New Zealand remain one of the stand-out performers amongst the developed economies. Economic and financial conditions continue to gradually improve in the Eurozone and Japan, but growth is expected to undershoot the stronger performers by a still considerable margin.

Central banks are looking through current low headline inflation and appropriately remain focused on the outlook for core inflation. Along with the divergent growth outlook, monetary policy is on a divergent path too. We expect the Fed will soon be raising interest rates while the Bank of Japan and the ECB, along with the RBA, are continuing to ease. The Reserve Bank of New Zealand (RBNZ) is on hold for now, although we continue to believe higher interest rates may still be required.

The outlook for the major emerging economies has become similarly divergent. The trend slowdown in the Chinese economy is continuing but we still expect growth of close to 7% this year. India is undergoing an economic resurgence, but Russia and Brazil are both likely to be in recession this year.

We see global growth of 3.4% this year, the same level as 2014, although the mix is different with stronger growth in developed economies but lower growth among the emerging economies. Growth then accelerates to 3.7% in 2016 as the growth performance of the emerging economies improves.

Our key asset calls remain essentially the same as last quarter. We expect bond yields to move modestly higher over the next twelve months as the US takes the first small steps toward policy normalisation. Bond purchases by the Japan and Eurozone central banks should limit the rise in yields globally.

We also expect the subdued inflation backdrop to be around for some time so US hikes will only occur if growth remains reasonably robust. Solid growth will help underpin earnings and share prices given valuations are not overextended. The Fed rate hikes could cause a ‘reset’ in US shares, but we expect this to be a temporary setback and would represent a buying opportunity.

Tighter US monetary policy can be (but is not always) a trigger for bigger issues in emerging markets. This time around our expectation is for emerging markets to wobble but not collapse, given the expected modest nature of the US tightening cycle and the overall better shape of emerging markets with regards to currency regimes, international reserves and current account positions.

We expect the USD to continue to move higher on the back of US rate hikes, which implies further weakness in the NZD. Given the adjustment we have seen so far, however, the NZD could stay around these levels for some time before trending lower again. Finally, we think a modest improvement in global growth, together with large cuts in supply capex, is setting the scene for a recovery in commodity prices, but this may be a 2016 story.

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Source: AMP Capital Investors (New Zealand) Limited

Important note: While every care has been taken in the preparation of this document, AMP Capital Investors (New Zealand) makes no representation or warranty as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This document has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this document, and seek professional advice, having regard to the investor’s objectives, financial situation and needs. This document is solely for the use of the party to whom it is provided.

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