Balancing investments

spicers1Authorised Financial Adviser DAVID MORGAN discusses role of shares in long term investment planning.

With a new government taking over in Wellington change is in the air. Many are looking at 2018 and wondering what the future holds. Regardless of our political perspective, the future is always uncertain.

When making investment decisions we also look to the future and, in planning for the uncertainties of life, ask ourselves; How long should I work? How long will I live? How do I grow my wealth?

Understanding how to invest to achieve long-term objectives, whilst managing short term risk, is essential.
‘Growth Assets’, such as shares, have consistently outperformed bank deposits over longer periods of time (e.g. 10 years plus). And this is true despite periodic market downturns.

The New Zealand share market has returned an average 10% per annum for the past 10 years, a period that includes the Global Financial Crisis. A 30-year measure of global markets averages almost 8% per annum.

In an age where bank deposits pay an inflation-adjusted 2%-3% per annum, the inclusion of shares in investment planning may be vital to the achievement of long-term goals and a comfortable retirement.

But we must get the balance right. Share markets perform well over long periods but they can be volatile over short periods so it is important investors retain a portion of their assets in more stable investments. This helps avoid the need to sell assets at an inopportune time.

The right balance will differ from investor to investor, based on factors such as age, life expectancy and needs. An Authorised Financial Adviser can help make the most of your investments.

The past few weeks have also seen exciting changes at Spicers – the company has renamed and rebranded as “AdviceFirst”. The change coincides with our expansion and the broadening of our advisory services which now include investment planning, Kiwisaver, personal insurance and specialist business insurance.

Whilst we love the new look, it is important to acknowledge our long history as “Spicers” and the high regard with which it is held among our clients. For Mark, Rebecca and myself, it remains business as usual.

David Morgan has a disclosure statement that is available on request and free of charge.

The information in this article is of a general nature only and is no substitute for personalised advice. To the extent that any of the above content constitutes financial advice, it is class advice only. If you would like advice that takes into account your particular financial situation or goals, please contact your Adviser.

By David Morgan