Turbulent times, uncertainty, fear. This has been the financial world for the last 2 and a half years now. This has meant volatility and a lot of nerves as to where to invest and keep safe those savings that are worked so hard for. Interest rates, falling property prices, share markets, inflation, deflation.

Some of our older investors have seen a lot of these turbulent times before, admittedly the length and scale of this particular downturn is particularly harsh, but certain fundamentals have been proved to be true, and by keeping them in mind assists in peace of mind.

Diversification. Not all eggs in one basket is possibly the most fundamental of investment principles. Whether it is across assets (property, cash, shares, bonds) industries and locations. By diversifying you spread the risk of total loss

Timeframes. Also known as investment horizon. When do you need access to the money? A longer term timeframe would mean a greater tolerance to volatile investments such as shares, which give a greater opportunity for return over the long term. A shorter timeframe, such as a retired person would have, would lead to more investments in cash and bonds.

Keep it simple. Complex investments have been shown over the last few years to be not the field you want to be playing in. CDOs and companies like Bluechip took simple investments and made them complicated for a few extra percent, when they collapsed spectacularly, it was the investor that got hurt.

Simple investments diversified over strong companies with timeframes matched to the investor. This has been proven true in the biggest crises this side of the war.

Commonly retired investors cannot recover if their capital is lost, they tend to be risk adverse, wanting to know that their money is safe first, then get a return from there. There are several options considered low risk that return better than a bank, which barely keeps ahead of inflation these days. But beware as sometimes the risks purported by people are understated, refer to finance companies and the ANZ sponsored, ING funds for evidence here.

Contact us for further information in regards to matching your investment portfolio or Kiwisaver to these principles.

Ps One thing we have learned here as well that we have added to our investment principles is don’t always believe the papers!!! The world would have ended twice over had we believed everything that they said.

SCF – Bonds

Alan Hubbard has quite a status in the South Isalnd and in particular around his home town of Timaru as president of South Canterbury Finance, New Zealands largest finance company. Unfortunately he has been in the news for the wrong reasons over the last month. He is also, along with his wife, head of several other companies under the umbrella of Aorangi investments which was placed under statutory management (where an accounting firm or appointee takes over the running of the company) due to some irregularities.

A report released overnight has detailed some worrying interparty lending within this company framework. Whilst this is separate to South Canterbury Finance, the public perception is in general that Allan Hubbard is South Canterbury Finance.

With the government guarantee coming off in Oct 2011, I really struggle to see South Canterbury surviving in its current form. My opinion would be that someone will step in to buy South Canterbury before the guarantee is invoked.

Investors who have South Canterbury investments, please feel free to contact us to discuss your options around this.

Health Cover

As part of our service we provide Health cover. In New Zealand in the 90s the government came to the realization that the funding of the entire health system was unsustainable. They thus essentially split the health system into emergency, and non emergency and prioritized the former.

This has led to New Zealand having a world class emergency service but a frankly poor elective or non emergency system. Thus if you have a major heart attack, you will be looked after by the best in the business, but if you have a minor cancer or need a new hip, you end up on the dreaded waiting list. Your condition generally doesn’t get any better while you are waiting for treatment!

Health cover is the answer to this. We pride ourselves on being able to provide good Health cover, covering some pre-existing conditions, with a range of excesses and options that allow affordability, generally the reason cited for not having it in place.

Call us 0800 287 387 to discuss further.

Blenheim

Long serving Blenheim Advisor Wayne Robertson has recently announced his semi retirement and we are pleased to announce that we have taken over the Blenheim operation.

Wayne will stay on in a part time capacity and his experience and knowledge will e a valuable addition to our firm. We look forward to working with the clients that Wayne has looked after in his 20 year career.

The merger of the Blenheim operation allows us a little more scale within which to operate which we think will add increased levels of service to our clients.

Referrals.

Our business grows by word of mouth. We put our clients first at all times to provide an effective financial planning service. We would love you to tell your friends and associates about what we do. As an incentive, I am offering a bottle of magnificent Marlborough wine from my Wifes family vineyard  for every successful referral that an existing client gives us.

So who do you know that has

• Bought or sold a house
• Started a family, gotten married or had a change in family circumstances
• Bought or sold a business or had a promotion
• Recently retired or thinking about retirement.