Why New Zealand's economic growth represents a massive opportunity for investors in 2015
Vivier and Co
16 January, 2015
The start of the year is a great time for all investors to consider whether their current investment mix is still suitable after reviewing their circumstances and any changes that may be needed for future planning.
Investors sometimes retain portfolios they haven't reviewed for a number of years. Yes, decisions were appropriate when first put in place. But perhaps personal situations have changed. For instance, an inheritance may have been received, which could have an impact on retirement planning. Perhaps a relationship break-up has significantly reduced overall assets. Or maybe the world economic outlook has led to better opportunities. Any number of matters could have changed since you last reviewed your portfolio. These could significantly affect your time-frame - or indeed your goals.
With an excellent track record in handling past financial crises, New Zealand is a safe haven for investments. Although highly regulated, it has some of the most reliable economic and fiscal policies in the world. When coupled to some of the highest interest rates amongst developed nations, it's little wonder that the country has a reputation as the jurisdiction of choice for investors.
New Zealand's economy grew by 3.4% last year. That was the largest increase in ten years and - according to analysts - the country promises even more growth this year, when the economy is expected to grow by a full 4%. Moreover, New Zealand is expected to be enjoying its first budget surplus in seven years, a remarkable situation, compared with other countries.
New Zealand's favourable position is widely expected to lead to major tax reductions for low and middle income earners, amounting by 2017 to NZ$1.5 billion, together with a prudently controlled debt and a growing economy. It is undoubtedly New Zealand's excellent economic policies that have taken overall business confidence index to a recent high of 30.4. With current fiscal policies likely to continue in the same successful fashion, they indicate a welcome opportunity for the investment community. Shouldn't that include you?
Amongst those taking most advantage of the country's positive business environment is the financial sector. It's already becoming one of the most attractive of all for investment. The NZX50 was up 17.0 per cent last year, a stellar performance, against a 16.5 per cent increase in 2013 and 24.2 per cent in the bumper year before that.
Over the last decade, the New Zealand market has delivered an average annual return of no less than 6.7 per cent. However, the last three years have been exceptional. In 2015, investors remaining alive to the opportunities should expect the same outstanding returns.
About the Author
Luigi Wewege is CEO of Vivier & Co, a boutique Financial Service Provider in New Zealand offering no cost, above average returns for investors.
Vivier & Co
Vivier and Company Limited ('VCL') is registered in New Zealand under number: 1130618. VCL is a member of Financial Services Complaints Limited a New Zealand Government approved Dispute Resolution Scheme, and maintains an insurance policy with Standard and Poor's A+ rated insurers, providing a NZD2,000,000 indemnity on any one claim/loss in the aggregate.
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