608002
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ISSN 2744-6085
4-DAY WORK WEEK Let’s work less and get the balance back
FOMO TO FOOP The property market rollercoaster
BUY HAPPINESS Which spending makes you happier?
REGULARS
What We Like A showcase of the hottest products and places that are the talk of the town. An Organised Life x The Curve Finance Investment Planner An Organised Life and The Curve collaborate on a well-designed and highly functional dateless planner to make financial planning and investing more accessible. Ask anyone in finance, having a financial plan and sticking to it creates a far more successful path to wealth than randomly picking stocks, having a good ‘gut instinct,’ or trying to time the market. With this in mind, Victoria Harris and Sophie Hallwright of financial education platform The Curve have teamed up with An Organised Life founder Beck Wadworth to launch a finance and investment planner to make achieving money goals more straightforward. It includes an education section with an investing glossary, guidance on budgeting, financial planning and goal setting, and monthly trackers to help you hit your targets. As a dateless planner, it can be used any time to suit your needs, allowing for both flexibility and structure in planning.
Win
This issue we’re giving away a prize package that includes the Investment Planner, the Curve Tote Bag and an Organised Life pen. To enter go to: informedinvestor.co.nz/win
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W H AT W E L I K E
Spring bling Add some sparkle to your spring – or choose a Christmas present early – with these fresh jewellery designs for 2023.
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1. Green Cushion Tourmaline Ring – $17,150 This stunning dress ring is crafted in 18ct white gold and features a cushion cut tourmaline claw set in the centre and small round brilliant diamonds set into the shoulders. 2. Chopard Ice Cube Diamond Bracelet – $4,000 An elegant white gold bracelet from the Chopard Ice Cube collection. Composed of a rectangle bar with ten 18ct golden cubes, five decorated with 0.10-carats of diamonds.
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3. Roberto Coin Love in Verona Diamond and Sapphire Earrings – $8,550 From the Roberto Coin Love in Verona collection, these small hoop earrings are crafted in 18ct white gold and feature pavé diamonds and small blue sapphire flowers. 4. Ruby Top Drops – $8,175 These ruby earrings feature two oval rubies totalling 2.86 carats with a halo of brilliant round diamonds and two emerald cut diamonds at the top.
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5. ASHOKA® Bloom Earrings – $19,200 These flower-shaped 18ct white gold drop earrings are crafted with unique ASHOKA® cut diamonds in the centre and feature a diamond grain set hook.
Clever thinking at a sharp price What we should like best about the new ŠKODA Fabia Monte Carlo is its fuel efficiency, its use of space, and its best-in-segment aerodynamics. But it turns out that we’re more interested in the creature comforts, so what we actually like best are the smartphone storage pockets, the cupholders, the USB-C socket, the storage compartments, and the removable sun visor. And we just love the umbrella that pops out of the door and the windscreen ice scraper that’s tucked into the fuel flap. We’re also rather taken with the multimedia system which comes as standard. It has an eight-inch colour touchscreen, a Bluetooth hands-free system with wireless phone charging, six speakers with surround sound, and smartphone connectivity via cable for SmartLink with Android Auto or Apple CarPlay. Obviously, we should take some time to appreciate all the safety features, and the Fabia is chock-full of airbags and safety systems, including Lane Assist, Adaptive Cruise Control, Manoeuvre Assist and the optional Travel Assist and Park Assist. With its rally car pedigree, the Fabia is always a delight to drive. Nippy, powerful and practical, it’s a great value, small European car at $39,990 plus on-road costs, and it’s eligible for a NZ Government Clean Car rebate of $2181. Hmm, that red colour does look very Christmassy… S P R I N G 2 0 2 2 | I N F O R M E D I NVESTO R 1 3
YO U R I NVE STI N G
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PERSONAL FINANCE
When You Set Goals, You Set Yourself Apart Throughout his a career as a financial adviser, Martin Hawes has seen first-hand the power of setting specific goals.
The people who do best with money are those who have goals. After decades of working as a financial adviser and advising hundreds of families, my experience is that people who know where they are going are more likely to get there.
There is a well-worn path for this, and that path takes the form of SMARTI goals. SMARTI goals are ones that are Specific, Measurable, Achievable. Relevant, Time Bound and In Writing: •
Specific – you know exactly what the goal is (it will probably be a number – for example, we will have a mortgage-free house and $1m of savings in 2035)
“I have a goal: get rich!” Sometimes people think that they have goals: “I want to be wealthy” or, perhaps, “I’m planning to get rid of the mortgage a bit faster”. In their minds, these are sort of nice-to-haves, things that you might think about one day. However, there is nothing defined about them – and, as such, there is no commitment. They are little better than wishful thinking.
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Measurable – you will know whether you have achieved it or not
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Achievable – you have a means of achieving it (i.e. it may be a stretch, but it should not be pie in the sky)
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Relevant – it is something that is important to you and your life
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Time bound – you are able to give a time for when it will be achieved
Instead, you should get smart and define what you want and when you want it.
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In writing – you have written it down in a way that you cannot fudge
I no longer work as a financial adviser and, looking back at my career and the people I have helped, I know that setting goals works.
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PERSONAL FINANCE
From FOMO to FOOP: The Psychology of the Property Market How do emotions play into the real estate cycle – and how can you try to keep a level head? Andrew Nicol looks at some of the features of each stage of the market cycle. Humans are terrible investors. While we should base our decisions on facts, figures and insight, too often we get hot under the collar and make rash emotional decisions. That’s one of the main reasons house prices continually rise and fall in cycles. Some investors decide to buy or sell a property based on market sentiment (what everyone else feels). When property prices are booming, they pile in, stoking demand and increasing prices further. Then, when prices are heading the other way, they sell or sit on their hands. This change in demand and supply is based on feelings rather than fundamental economic shifts. And this can cause property booms to be frothier and slumps to be deeper and more prolonged. So let’s analyse the four main parts of the property cycle and dig into the psychology. That way, you can understand whether you’re making your decisions based on facts or feelings. Boom The first stage of the property cycle is the boom. Here, property prices are rising, and investors feel it’s a great time to be in the market.
In the hope of making a quick buck, others join in or they bring forward their purchasing decision. By that, I mean they buy properties today that, in other circumstances, they would have purchased a few years into the future. This increases demand in today’s market, causing house prices to rise further. Since it takes time to build more houses, supply can’t catch up straight away, and prices continue to climb. This creates FOMO (fear of missing out) and causes some property investors and homebuyers to overpay for a property – just so they get one. Investors who get into the market early in the boom will do well. Investors who get in too late risk paying higher prices than if they had waited. Peak At the peak of the market, most investors are elated. They can’t believe how well they have done. And a good number of people are still buying, which helps prices to remain high. But then FOMO begins to be replaced with FOOP (the fear of overpaying) – and investors worry that prices are too high and will fall in the future. This causes some property buyers to pull back from the market.
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YO U R I NVE STI N G
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PERSONAL FINANCE
Battling the Bear: What Should You do in a Downtrend Market? With the market down 20 per cent since January, what should savvy investors do to protect themselves? Tina Teng, Market Analyst at CMC Markets, provides some guidance on taking a defensive stance in a downturn. The US stock markets ended the worst first half in over 50 years in June, pushing the S&P 500 into a bear market, having dropped more than 20 per cent from the January high. Meanwhile, the ASX 200 took the last but hardest hit from the central bank’s ‘front-loading’ rate hikes, plunging more than 10 per cent in one month. Locally, the New Zealand benchmark index, the NZX 50, tumbled 20 per cent in the first half of the year. It’s certainly a difficult time for investors who hold a bunch of losing positions, and
panic selling often happens when the stock market drops. Eventually the markets will bounce back, so this panic selling can lead to unnecessary losses. What tools could you consider as hedges for your current losing positions? The defensive instruments If the risky assets account for a large percentage of your portfolio, you could consider increasing your proportion of safehaven assets. The traditional safe-haven asset is gold, and the price of gold usually increases when there is a market crash
or during uncertain events. Physical gold can have a high storage fee, so gold-related ETFs are good alternative investment. Gold-related exchangetraded funds (ETFs) such as SPDR Gold Shares (NYSEMKT: GLD) and iShares Gold Trust (NYSEMKT: IAU) are easy to manage and have low transaction fees. As shown in the chart below, gold held its value when the SPX 500 crashed during the Global Financial Crisis (GFC), the US-China trade war, and Covid-19.
SPDR Gold Trust and SPX 500 since 2005 300.00%
SPDR Gold Trust
220.00% 220.00% 180.00% 140.00% 100.00% 60.00%
SPX 500
20.00% -20.00% -60.00%
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
Source: TradingView as of 8 July 2022 S P R I N G 2 0 2 2 | I N F O R M E D I NVESTO R 4 9