After a solid prior 12 months, the third quarter of the year delivered a mixed bag. International share markets were sluggish overall, although mainly still positive, as persistent inflation pressures implied that interest rates were unlikely to be falling any time soon. This was less welcome news for bond markets with yields generally rising through the quarter and resulting in most bond strategies delivering small negative returns. With much of the renewed inflationary pressure coming from stubbornly high oil prices, attention remains fixed on the US/Iran conflict, and the Strait of Hormuz, for any signs of relief.
In this update, we note that even though inflation concerns remain elevated, global growth remains resilient. We also highlight the global AI investment spend that is currently supporting investment markets and we touch on long term demographic trends that can be overlooked right now, but not forever. We tie all of that together by reviewing how the New Zealand economy has been performing amid an unsettled global environment.
In the feature article, we look closely at the concept of financial literacy. It is about more than assessing what people may know about money. This article considers the significant financial wellbeing benefits available to someone making a series of sound decisions over the course of their lifetime. It is not just an important read for investors today, but also for anyone with significant life aspirations and a long investment time horizon.
The excellent investment returns over the last few years have not been lost just because the recent quarter has been less impressive. Quite the reverse in fact. Successful long term investing means enduring occasional periods of lower or negative returns to ensure that, over the long run, portfolios are properly positioned to pick up the returns that capital markets make available. After all, markets don’t go up in a straight line, but they do go up over time.
Between newsletters we often post relevant blogs under the News/Blog section of our web sites at www.lyfords.co.nz and www.uk-pension-transfer.co.nz
Blogs posted since our last newsletter in July:
Monte Carlo Projections used in retirement income projections explained