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Financial Summary post Trump Election
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In this Edition
  • Financial Summary post Trump Election
  • Every Wonder Why?

FINANCIAL SUMMARY POST TRUMP ELECTION
WITH SOME SURPRISES

Economy
  • Global growth for year predicted (AMP Quarterly Strategic Survey) to average 3.0%
  • United States job growth continues to be solid and after a dip in May exceeded forecasts in June and July although slightly down in August. Unemployment low at 4.7%
  • Political frustration evident (Trump and Europe) in some quarters re stagnant incomes, lack of job security immigration and globalisation.
  • US equity and currency markets have reacted positively to Trump victory based on pro growth policies and proposed tax cuts.
  • Oil prices have are fluctuating around $40 to $50.
  • Commodity prices and bond yields may have bottomed out. Emerging markets looking better.
  • Financial markets are very sensitive to negative news including the price of oil resulting in some market volatility
  • China is in transition from a manufacturing economy to a consumer/services economy and reported growth is down to 6.5% which most countries would be very pleased with. Stabilization in China working and stimulus having impact.
  • NZ (and Australian) economy strong with tourism booming, non-dairy exports doing well, housing construction at highs, low interest rates and inflation, and net migration at record levels. Dairy prices are showing a price recovery and are at best levels since 2014.
  • At least one US interest rate increase forecast (December ?) for the year depending on economic data.
  • Reserve Bank NZ reduced Cash Rate to 1.75% and interest rates likely to remain low for a number of years.
  • NZ Dollar is fluctuating in value currently 73 cents US and 95 cents Australian and considered by Reserve Bank to be above fair value.
Investment
  • Growth investor expected to be rewarded for risk over medium to long term (7 to 10 years)
  • US share markets have recovered from a correction and reached new highs in mid August although some volatility since then.
  • For those close to retirement or use of funds if you have concerns re volatility please give me a call to discuss.
  • There is no current forecast of recessionary conditions
  • AMP portfolios are well diversified across asset classes and managed in light of prevailing conditions.
  • Healthy returns from equities forecast.
  • Likelihood of volatility and lower gains than in recent years.
  • Regular contributions (dollar cost averaging) can boost gains in value
  • Very important that funds are accumulated and held for retirement as NZ Super not adequate for most life styles.

EVER WONDER
WHY......

  • Why do banks leave vault doors open and then chain the pens to counters?
     
  • Why do we leave cars worth thousands of dollars in our driveways and put our uesless junk in the garage?
  • Why the sun lightens our hair, but darkens our skin?
  • Why don't you ever see the headline "Psychic Wins Lottery"?
  • Why abbreviated is such a long word?
  • Why is it that Doctors call what they do "practice"?
  • Why don't sheep shrink when it rains?
  • Why are they called apartments when they are stuck together?
  • Why do people order double cheeseburgers, large fries and a Diet Coke?

SUGGESTIONS
Is there a topic you would really like to read or learn about in our next issue?  Email us with your suggestion.

Mark O'Donnell
Authorised Financial Adviser
FSP 32461

 
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