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Market Update

November Market Update

Labour/NZ First/Greens are in – what does this mean? National won the NZ election with 44.4% of New Zealand’s voting for them right……? In the First Past the Post era this would have been true, but not with Mixed Member Proportional. Even after National received the most votes, and seats in Parliament, Labour has formed a coalition with NZ First and the Green Party to give them 50.40%, and 63 seats in government. So, what does this new coalition mean for New Zealand? Expected outcomes There is a lot of commentary around how Labour will negatively impact the NZ economy […]

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August Market Update

Where is the top this time? We have been concerned around the levels that local and global share markets, and bond markets, have been trading at for some time, however this has not stopped the US share markets continuing to reach and break record levels in share prices. Below we have included a chart showing the Shiller Cyclically Adjusted Price to Earnings (CAPE) Ratio for the Dow Jones index. This measure which looks at the cyclically adjusted ratio of the price of shares to the earnings of the share, is a reasonably good indicator of when a share market is […]

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March Market Update

We are now seeing the “whites of the eyes” of global inflation In late 2016 Janet Yellen, the Head of the US Federal Open Market Committee (FOMC), stated that there would not be rate hikes until they saw the “whites of the eyes” of inflation. In late February 2017 they finally saw this when the US jobless claims came in at 246,000, the lowest it has been in nearly 44 years. This higher level of US employment is expected to lead to increased wage inflation which in turn adds pressure to the Fed to increase cash rates. This better than expected […]

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Press Release: New Appointment – Grant Lowe

Media Release 14th February 2017 New Appointment – Grant Lowe Boutique investment advisory firm Private Wealth Advisers has appointed experienced investment adviser Grant Lowe to the company. Grant has worked in financial markets for 20 years both in London and New Zealand, with 13 years’ experience as an investment adviser. Most recently he has spent the last nine years working for a large Private Bank, where he advised and managed portfolios for High Net Worth individuals, Family Offices, Community and Charitable Trusts. Grant is an Authorised Financial Adviser, Certified Financial Planner (CFPcm), and a member of the Institute of Financial Advisers. He […]

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February Market Update

Climbing the Wall of Worry in 2017 The term “climbing the wall of worry” has been used in many pieces of commentary from other fund managers, and market commenters over the past 6 months; but at no time is it more fitting than right now. We have seen share markets in the US reach record levels with the Dow Jones Industrial Index reaching an amazing 20,000 points; which is a return since the bottom of the GFC in 2008 of 303% or 14.87% p.a. At the time of writing this, the markets continue to trade around the 20,000 mark, which […]

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December Market Update

Interest Rates on the Rise In the last month we have seen a sharp fall in bond valuations as interest rates around the globe rise on increased concerns of higher inflation pressures. A main concern for investors is the increase in the weighted average production price of goods out of China. The consumer producer price index graph below shows that over the past four years, China has been exporting deflation (lower costs of goods); however, prices have increased recently which means Chinese made goods are now more expensive. China Produce Price Index Source: DB Global Markets Research US Inflation Source: DB Global […]

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November Market Update

The Shine Comes Off the NZ Market The month of October 2016 will not be remembered fondly by the NZ fund manager community. To the period ending 28th October we have seen the NZX50 decline 8.4% from its high reached in 7th September. From anecdotal evidence we are hearing this correction is due to some profit taking by foreign investors, and/or a reduction in riskier investments by global managers as they prepare for the US election followed closely by the Federal Reserve’s December meeting, where markets are pricing in over a 70% chance of a rate rise. Global Equity Indices […]

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September Market Update

Correlation causes concern September may be remembered as the month where the markets reached their most recent peak. At this stage the market has become very data dependant again, and the “lower for longer” argument is being well and truly tested as we approach the next US Federal Reserve Open Committee meeting. In the first two weeks of September we have seen the US S&P500 index decline, and more interestingly the global bond market also sell off (yields rise). This correlation in performance between bonds and shares has been something that Private Wealth Advisers has been concerned about for a long […]

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Market Update July 2016

Expect the unexpected Last month the British public went to the polls to vote on staying in the Eurozone (Bremain) or leaving (Brexit). Brexit won by a vote of 51.9% to 48.1%. This shocked markets, with share values declining, the pound dropping to an historically low level, and bond market prices rising. While the result was surprising we feel that when you break down the results, the underlying issues are more interesting. The referendum had a turnout of 72% of voters, which was 6% more than the recent general election. People were motivated to vote. There was a clear divide […]

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$5.5t USD in negative yielding government bonds!!

JP Morgan estimates that over $5.5t (yes, trillion) of investor funds are currently in negative yielding government bonds. To put that into plain interest, if you purchased $10,000 (Euros to be correct) worth of German 5 year bonds currently at -0.308%, after 5 years, your $10,000 would be worth $9,846.94. To clarify, this doesn’t mean that the quarterly interest payments are negative, it means that the amount an investor is prepared to pay for the bonds is so expensive, that when it matures; combining the capital being repaid (the face value) and any income generated works out that the ‘total return’ or […]

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