Newsletter – February 2023

Our theme this month is Albert Einstein’s Eighth Wonder of the World – The Power of Compounding.

This issue covers the importance of being invested, through the highs and lows, over the longer term.

This month we unpack diversification. Diversification is a strategy to lower investment risk by spreading money across and within different asset classes, such as shares, bonds and cash. It’s one of the best ways to weather market ups and downs and maintain the potential for growth.

This issue explains recency bias, a phenomenon whereby investors let short-term performance influence their decisions, and ways to counter this, instead seeing the silver lining in market volatility.

This issue shows the methods used to support returns during periods of market volatility. Using the New Zealand dollar as a ‘shock absorber’.

It’s been an eventful start to the year. Tensions have been rising between Russia and Ukraine and central banks around the world are looking to increase interest rates.