Interest.co.nz journalist, Jenée Tibshraeny, joined Sharesies co-founder, Leighton Roberts, to answer questions from Sharesies users about the market volatility caused by coronavirus.
They discussed investment strategies, compared and contrasted how global markets are placed to absorb shocks now versus during previous periods of uncertainty, and considered the usefulness of fiscal and monetary stimulus.
Sharesies is an investment platform, which gives retail investors direct access to the NZX, as well as various investment funds.
The webinar was recorded on Thursday and is targeted at a general audience.
The views shared shouldn't be treated as financial advice.
6 Comments
WOW ........... Has anyone seen the SPX500 GRAPH in the WSJ re-repoted by MARKET WATCH and Bloombergs about 15 minutes ago .
Its starting to look like a rout .......... they used an expression I have never seen before , not just oversold , but "EXTREME OVERSOLD '
I firmly believe markets usually mostly get it right , so this is not looking good at all .
Luckily I am mostly in cash and Bonds , and have been in cash for a long 3 years now , as I felt the PE ratios were totally out of whack , so I cashed in way back ( too soon )
Boatman,
If you sold all your NZ shares some 3 years ago, then the market(NZX 50) would have to fall to around 7000 to justify that. That would represent a drop of almost 40% from its current level. I doubt if that will happen, though I think we may well move into bear market territory.
Over 2 years ago, I began to take some profits from my best performing shares and I have gradually moved to having 20% of my total portfolio(shares and rental property) in cash. I have no idea when the market will bottom out, or indeed where, but I intend to start gradually buying back these holdings at some point. I will certainly miss some of the initial rise, but the yields will still be very attractive.
From Bloomberg;
Chinese banks are taking extraordinary measures to avoid recognizing bad loans, seeking to shield themselves and cash-strapped borrowers from the economic fallout of the coronavirus outbreak.
Some of the measures, which include rolling over loans to companies at risk of missing payment deadlines and relaxing guidelines on how to categorize overdue debt, have the explicit approval of regulators in Beijing. Some lenders are also refraining from reporting delinquencies to the country’s centralized credit-scoring system and allowing borrowers to skip interest payments for as long as six months, according to people familiar with the matter, who asked not to be named discussing internal decisions.
Before we start reacting to these sorts of meaningless comments by stock pickers who live off activity - take a look at a 10 years graph of the S&P 500 or NZ50 - the small changes we are seeing are simply noise - or static.
Read Buffett's latest Letter to Shareholders - he won't be selling.
Good companies that were purchased at fair prices with a strong economic franchise - such as Chorus, Port of Taurange, Vector, Auckland Airport will reman good investments and almost certainly likely to be more valuable in 10 years than they are today - while providing very good dividend yields going forward.
As Buffett has stated - once you have an IQ over 70 - Investing is very easy - just learn to suppress the animal urge to " do something "
That's the problem, how do you know many of the NZ herds even pass that 70? - specially that the past 150yrs this country predominantly raised a FASD & recreational drugs generation to bring the average into lower level. The same saying cannot be said for NZ mate!
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.