Articles by Cam Watson on ArticleSnatch.com

Investing in Shares : What Works and What Doesn't

Wed, 29 Sep 2010 21:41:41 -0400

There is no ‘right’ way to invest in shares, but there are some methods and strategies that tend to work better than others. Investing is like town planning, in that it has to look forward. Try as we may with tea leaves, weather maps and computers, humans struggle with guessing what the future holds. In the field of investing the best we can do is look backwards and see what has worked in the past and hope a similar pattern occurs in the future. Which leads nicely into our first golden rule. Something that definitely doesn’t work is to expect recent returns to repeat themselves. In January 2001 global shares had delivered an annual return of 21% over the previous three years. If you had invested $10,000 into global shares in 1998 it would have been worth $17,715 by 2001. If you had instead chosen New Zealand shares over the same three years your $10,000 would have grown to a paltry $10,895 as our market only returned 2.9% a year over these three years.This situation reversed over the next three years. New Zealand shares returned 10. **End Summary** Topics: Shares]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit our website. Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. It is one of New Zealand's largest and most established investment advisory firms. If you are looking at investing in shares visit www.craigsip.com

Share Investment : A Wealth of Information from Wealthy Investors

Wed, 29 Sep 2010 21:23:04 -0400

The 2009 World Wealth Report from Capgemini and Merrill Lynch, a survey of high net wealth investors around the world that have US$1 million of net financial wealth excluding their primary residence, outlines where these people invest their money. On average, the 10 million people globally that fit this definition of having ‘high net wealth’, have 29% of their capital invested in shares, 31% in bonds, 17% in cash, 18% in real estate and 6% in alternatives like hedge funds, commodities and private equity. If the world’s richest people take such a diversified approach perhaps the rest of us should also consider it. Diversification also applies to share portfolios. Own a range of companies, but do not over-diversify, or as Peter Lynch the great Fidelity fund manager, calls it “de-worse-ification”. Having said that Lynch used to hold upwards of 700 companies in his fund, but recommends personal investors hold perhaps 20-40 companies. Emphasising high-quality shares is a strategy that continues to make sense. It is very common to see people new to shares to head straight for the speculative end of the market – to buy small companies or shares trading at a few cents. **End Summary** Topics: Shares]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit our website. Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. It is one of New Zealand's largest and most established investment advisory firms. If you are looking at share investment visit www.craigsip.com

Taupo Report Important For New Zealand Investments

Sun, 15 Aug 2010 19:29:20 -0400

A recent study on the Taupo volcanic area by the Institute of Geological and Nuclear Sciences published in the NZ Journal of Geology and Geophysics has more relevance for investors than may appear at first glance. Our country’s volcanic geology is a factor those involved in New Zealand investments should consider when they are deciding on the asset allocation of their portfolios. A recent report on the Taupo volcanic zone by the Institute of Geological and Nuclear Sciences, published in the NZ Journal of Geology and Geophysics, highlights the issue. The entire central region stretching through to the Bay of Plenty is one of the most active volcanic regions in the world with 12 active volcanoes and over 30 geothermal hotspots. Taupo itself is a massive volcanic crater 20 kilometres in diameter, making it one of the ten largest in the world. The first eruption at Taupo occurred 27,000 years ago and it has had major eruptions 28 times since. The last big blow was in AD 181. This eruption was huge and one of the largest the world has seen over the past 5,000 years. **End Summary** Topics: investments]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit www.craigsip.com . Craigs Investment Partners is one of New Zealand's largest & most established investment advisory firms. Some of our services include: Sharebroking, Portfolio Management, Retirement Planning & Investment Advice.

Investments in the Share Market in 1990 Were Scary Too

Mon, 19 Jul 2010 21:39:05 -0400

With significant risks continuing to swirl around financial markets, many people are understandably reluctant to invest at present. But we should remember that share markets always face uncertainty - risk is a fact of life when you are investing. If we go back 20 years, things were much worse in 1990 than they are now, and markets have done fine since. 2010 might seem rough, but 1990 was no picnic for investors, or workers either. Considering the situations vacant section in The Dominion could fit on one page, just getting a job was an achievement. The unemployment rate in 1990 was 8.9%, commercial property prices were collapsing, GDP was shrinking and we were in recession. Inflation was 7.9% and the floating mortgage rate stood at 14.9%. Our share market had halved in value over the previous three years. Then, just when you thought it couldn’t get much worse, in August 1990, Saddam Hussein invaded Kuwait sending our share market down another 30%. Soon after, the BNZ needed recapitalising by the government. Then we went through what the UK is facing now, massive budget cuts, needed to fix a very sick looking set of public accounts. **End Summary** Topics: share market]]>]]> About the Author: ]]> This is a modified article from Cam Watson. Read the complete article at www.craigsip.com . Craigs Investment Partners, an NZX Firm, is one of New Zealand's largest & most established investment advisory firms. Services include: Sharebroking & Share Market advice, Portfolio Strategy & Management, Retirement Planning, Investment Advisory & much more.

Fixed Income vs. Equity Portfolio

Tue, 08 Jun 2010 22:51:15 -0400

Fixed income is fantastic for lots of things, but ‘income growth’ isn’t one of them. Fixed income is unbeatable if you are looking for security of income and capital. It is also does an excellent job of providing a portfolio with a buffer against volatility. But, fixed income is not the place to be if you are looking for ‘income growth’. The income stream from fixed income depends on changes in interest rates, and as we know these move up and down in cycles. They do not continually rise over time. Consider an investor who retired in 1985 with $100,000 and invested it all in 6-month deposits. At this time they could have earned a hefty 17.8% (source: RBNZ) on this money, giving them a pretty good annual income of $17,800 before tax. Assuming they spent all this income and weren’t able to add anything to their capital, where would they be today? According to the RBNZ again, the 6-month deposit rate is currently 4.4%. Thus, our investors would today be earning only $4,400 from their portfolio. That represents a 75% drop in income. **End Summary** Topics: fixed income]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit www.craigsip.com . Craigs Investment Partners Ltd (formerly ABNAmroCraigs) is an NZX Firm established in 1984 and is one of New Zealand's largest & most established investment advisory firms. If you have a fixed income and would like to know more about investment, contact us today.

Investing in Shares and the Panic Caused by a 'Fat Finger'

Tue, 08 Jun 2010 22:18:01 -0400

On Thursday the 6th of May 2010 the US market plunged more than 900 points in under half an hour, but then later in the day found its feet and recovered to end the day down 340 points. What caused this fall is still being investigated but a typing error could be partly to blame. Urban legend has it that a dealer mistakenly hit the "��b"�� for billions key rather than the "��m"�� for millions sending a far larger sell order into the market than they intended. What is far more concerning is the panic selling this "��fat finger"�� mistake appeared to have caused. Automatic computer models were sent into immediate overdrive and many hedge funds and traders who use these systems sent a wave of sell orders into the market, not only in the US, but right around the world. Investing in shares is a pursuit that involves a lot of uncertainty. Optimists might call this excitement. I prefer to call it uncertainty. Sometimes markets react rationally to news, but at other times they behave completely and utterly irrationally. The widespread use of computer systems only adds to this mindless volatility. Pun intended. **End Summary** Topics: investing]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit www.craigsip.com . Craigs Investment Partners Ltd (formerly ABNAmroCraigs) is an NZX Firm that was established in 1984.Some of the many services offered are Sharebroking, Portfolio Strategy & Management, Retirement Planning & Superannuation, Investing Advice.

Investment Strategists Becoming Less Bearish Toward UK

Mon, 10 May 2010 18:34:23 -0400

We have noticed a steady increase in the number of investment strategists around the world becoming less bearish towards the United Kingdom and United States. With glimmers of better news starting to emerge from these major economies, maybe they have a point. With the major economies wallowing in massive debt, budget deficits and crumbling housing markets, emerging markets like China and India along with the commodity economies such as New Zealand and Australia have been the investment darlings of the past year. However, there are signs that the economies and markets of the major countries are stabilising. At the same time, there is a growing view that the enthusiasm for emerging markets could be a little overdone in the short term. It appears that an increasing number of investors are sending more money back to the blue chip shares, in the blue chip markets. The UK has always been an important market for many New Zealanders investing in shares. Many of us, of course, have historical linkages there, and many returning Kiwis and recent immigrants from the UK have investments in the UK stock market. **End Summary** Topics: investment strategies]]> sharemarket investment new zealand]]> investment strategist]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit www.craigsip.com . Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. It is one of New Zealand's largest and most established investment advisory firms. Craigs Investment Partners is 100% owned by certain staff and close business associates.

Shares in Ryman Healthcare - A Rare '10-Bagger'

Mon, 10 May 2010 18:32:25 -0400

Since listing in June 1999, Ryman Healthcare has delivered its shareholders a total return, which includes share price appreciate and dividends, of 1,043%, or 24.3%pa. By cracking the 1000% mark (i.e. returning 10 times the original investment) brokers will, with a good deal of admiration, refer to Ryman as a ’10-bagger’. Ryman develops and operates retirement villages. It currently has 21 villages around the country and 3,700 residents. Its villages are somewhat unique in that they offer an integrated service, from independent apartments through to serviced units, resthome and hospital beds, allowing the company to cater for the changing needs of occupants as they age. While aged care is Ryman’s core business, it also has a property angle. It develops two new villages a year on average and has a land-bank of 3 to 4 years up its sleeve. The aged care operations generate care and management fees that represent 35% of Ryman’s total revenue. The sale of new units accounts for 27% of revenues and the resale of units 38% of revenue.The market certainly perceives Ryman’s fortunes to be closely linked to the housing market. **End Summary** Topics: shares ryman healthcare]]> sharemarket new zealand]]> stockmarket new zealand]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit www.craigsip.com . Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. It is one of New Zealand's largest and most established investment advisory firms. Craigs Investment Partners is 100% owned by certain staff and close business associates.

The Characteristics of Quality Investment Companies

Mon, 03 May 2010 23:55:26 -0400

A key element of any investment philosophy is to invest in ‘quality’ companies. We believe quality companies deliver higher returns at a lower level of risk than low quality companies. The issue with the term ‘quality’ is defining what exactly is a quality company and what it not. Quality is a subjective measure and what may look like quality to one person is not to another. It is also difficult to measure and value. Unfortunately we cannot simply insert a line into a company’s balance sheet called ‘quality’ and attach an appropriate dollar figure. Here are some key indicators of quality companies: 1. Track record of steady growth in earnings per share (EPS) A quality company should be growing its earnings over time. It is important to look at EPS rather than just profits because profits can be inflated by issuance of additional equity and acquisitions. EPS is the best measure of real earnings growth. 2. Track record of steady growth in dividends per share Nothing is more transparent than dividends. The payment of a dividend proves that a company has cash on hand and the financial muscle to produce a cash flow to shareholders. **End Summary** Topics: Quality Investment Companies]]> Quality Investment New Zealand]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit www.craigsip.com . Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. It is one of New Zealand's largest and most established investment advisory firms. Craigs Investment Partners is 100% owned by certain staff and close business associates.

Income Investors Should Consider Shares

Mon, 03 May 2010 23:53:57 -0400

Many New Zealand shares today offer excellent income streams of between 6.0% and 10%. Most provide the chance of growth in income over coming years. For people dependent on the income from their investments, shares can be a powerful ally. Many folks desperate to earn higher levels of income are preferringterm deposit look-alikes such as finance company debentures to shares.While finance company debentures are higher riskthan term deposits (finance companies undertake higher risk lending overall thando banks do and the risk of default is higher) they look and feel like term deposits.Shares on the other hand go up and down like yo-yos every day. There is also aperception in New Zealand that the sharemarket is a gambling den. Yes, sharesare volatile, but there are ways of lessening this, which will be discussed later.As for the sharemarket being a ‘gambling den’, it can be, and many stubbornlytreat it as such, but many more (probably wealthier!) people use it for the role itwas designed for 300 years ago; to buy stakes in good companies which theyhold on to for a long time. Turning again to the volatility of share prices. **End Summary** Topics: Sharemarket]]> Investing Sharemarket New Zealand]]> Sharemarket Edge New Zealand]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit www.craigsip.com . Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. It is one of New Zealand's largest and most established investment advisory firms. Craigs Investment Partners is 100% owned by certain staff and close business associates.

The Biggest Investing Potholes

Mon, 03 May 2010 23:51:25 -0400

The longer one is involved in the investment sector the more you realise that being a successful investor is 20% market nous and 80% avoiding stupid mistakes. As legendary investor Warren Buffett put it; “investing is simple, not easy”. With that in mind, Here are some of the more common potholes that continue to trip up investors. Having unrealistic expectations Shares have been the best performing investment over the past 60-70 years and have returned around 10% a year. During periods when inflation is low and rising returns tend to be more like 8% a year. Investors gunning for returns of 15% plus will have to take huge risks to get there by putting all their money on a few shares or properties, or by using debt to gear their portfolio. The higher return you aim for, the higher the chances that you fail. As they say, aiming for the moon can mean you end up in a black hole. Falling for con artists There are many unsavoury characters out there that play on people’s gullibility and greed by offering unrealistic returns. Do not get sucked in. If it sounds to good to be true, it will be. **End Summary** Topics: Investment]]> Investing]]> Investment Mistakes]]> Avoiding Investment Mistakes]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit www.craigsip.com . Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. It is one of New Zealand's largest and most established investment advisory firms. Craigs Investment Partners is 100% owned by certain staff and close business associates.

Investing Legend Visits New Zealand

Mon, 03 May 2010 23:48:43 -0400

It is 18 years since Dr Mobius was in New Zealand and on this trip he was only here for 20 hours. The sprightly and very personable 72-year old managed to squeeze in a 2-hour presentation to over 600 people, including myself in Auckland, a couple of media interviews and a working lunch with a group of directors and CEOs from a range of leading NZ companies. Dr Mobius is Executive Chairman of Templeton Asset Management. He has managed the Templeton Emerging Markets Investment Trust since it listed in 1989. This fund is listed in London and in New Zealand. He also manages other funds and is responsible for US$30 billion of client money. He has been investing in emerging markets for 30 years and is now regarded as the world leader in this field. His fund has appreciated 18 fold since listing, which equates to an annual return over the past 21 years of around 15 per cent a year. Over the past decade it has gained 12 per cent a year in NZ dollars, trouncing the broader global markets MSCI index which has fallen 3.0 per cent a year over this time. **End Summary** Topics: Investing New Zealand]]> Dr Mobius Investing]]> ]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit www.craigsip.com . Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. It is one of New Zealand's largest and most established investment advisory firms. Craigs Investment Partners is 100% owned by certain staff and close business associates.

A Smorgasboard of Investment Tips from Buffett

Mon, 03 May 2010 23:47:12 -0400

Warren Buffett is probably the most widely read, but most ignored, business leader in the world. Buffett’s annual letter to his Berkshire Hathaway (BRK) shareholders is always widely anticipated by investors for its investment insights, humour and market views. This year’s effort doesn’t disappoint. What continues to amaze many of we ‘Buffett-watchers’ is how rarely he is emulated. Here is the world’s second richest person with a nest-egg of US$37, who wins plaudits from investors all around the world for not only his returns and investment approach, but also his open and frank communication with his shareholders, and yet only a daring few seem to want to try and follow in his footsteps. And just by way of introduction, Buffett and partner Charlie Munger have delivered a return of 22% a year to BRK shareholders for 40 years - in other words, he has turned a $10,000 investment in Berkshire in 1965 into $80 million today. Nobody has come close to matching this return over 40 years. When picking stocks Buffett and Munger prefer predictability over growth and avoid businesses whose future they can’t evaluate. **End Summary** Topics: Investment Tips]]> Investment Tips Warren Buffett]]> Investing Tips]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit www.craigsip.com . Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. It is one of New Zealand's largest and most established investment advisory firms. Craigs Investment Partners is 100% owned by certain staff and close business associates.

Property Investment Tax Changes : Good News For First Home Buyers

Mon, 03 May 2010 23:45:03 -0400

Changes to the way property investments are taxed are on the way. These changes may have a positive spin-off for people looking to buy their first home. Property is currently a very tax-effective investment compared to shares and deposits. Investors in shares pay tax on their dividends and those with deposits and bonds pay tax on the interest they receive. Property owners though can reduce their tax with depreciation credits, to the point where the government actually ends up paying a refund of $500 million to the owners of the $200 billion invested in property. Perhaps this generous tax treatment is a contributing factor to our love affair with housing as an investment. We recently compared the assets held by New Zealand households to those in a sample of other developed countries. This analysis showed that we have far and away the highest weighting to property with 75% of our household assets invested in housing. At the other end of the scale, the figures we gathered show that New Zealanders have the smallest allocation to shares of all the countries in our sample. **End Summary** Topics: Property Investment]]> Investment Tax Changes]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit www.craigsip.com . Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. It is one of New Zealand's largest and most established investment advisory firms. Craigs Investment Partners is 100% owned by certain staff and close business associates.

Where The New Zealand Markets Currently Sit In The Global Economy

Wed, 17 Feb 2010 16:56:58 -0500

05 January 2010 2009 will go down in history as one of the most remarkable years on record for markets around the world, including New Zealand. The year began where 2008 finished, with the world facing financial Armageddon, but ended with investors enjoying a year of generally reasonable returns, after such an awful 2008. Market tensions eased in March and sentiment improved. After hitting a low of 676 points on March 9, a level not seen since 1997, the S&P 500 began to recover strongly, eventually ending the year (with one trading day to go as I write this) 67% above this low point. In New Zealand our market followed global markets upwards. Using the NZSE index, which does not include dividends, the NZ market hit an 11-year low in early March, but has since gained 34% from this low. While markets have recovered strongly, they remain far below their 2007 peaks. The New Zealand market needs to deliver a 34% gain to get back to its 2007 high point. Much to the frustration of exporters and investors with overseas investments, the NZ Dollar roared over 2009. Against the US Dollar it gained 50%, rising from US$0.50 to US$0. **End Summary** Topics: new zealand markets]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit www.craigsip.com . Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. It is one of New Zealand's largest and most established investment advisory firms .

Defining Some Different Fixed Rate Bond Types

Thu, 17 Dec 2009 15:42:19 -0500

In the tradable fixed interest market there are a number of different types ofsecurities, from senior bonds with a fixed coupon (interest rate) and maturity date,through to perpetual preference shares with resettable coupons and no maturitydate. Some of the key points to note about the various types of tradable fixedincome securities available are: Senior Bonds "�" These bonds can be either secured or unsecured. They rank ahead of subordinated debt holders and shareholders. Senior debt for large corporations is typically given a credit rating by a global credit rating agency. Typically these bonds have a fixed maturity date and fixed coupon. On maturity the principal is redeemed to the holder in cash. High quality corporate bonds are easily traded in the secondary market without undue premiums added for risk or liquidity. Subordinated Bond "�" These bonds rank below senior debt and all other debt but before shareholders and unsecured creditors for repayment in the event of liquidation. There are also a large number of Subordinated Callable Bonds on issue by banks in the New Zealand market. **End Summary** Topics: fixed rate bonds]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit www.craigsip.com Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. Craigs Investment Partners is 100% owned by certain staff and close business associates. Services offered include Sharebroking , Porfolio Strategy and Management, Retirement Planning and Superannuation and more.

Getting An Edge On The Sharemarket

Thu, 17 Dec 2009 15:41:07 -0500

From the minute you invest in shares the sharemarket will largely drive your returns. If the sharemarket falls or rises, your investment portfolio will move in the same direction. In the wake of the recession and global financial crisis, our sharemarket fell 41% from October 2007 to March 2009. Over 94% of NZ stocks went down over this period and things weren't any better overseas as 90% of global markets also fell. That's a very strong tide to swim against. Since March the reverse has happened. Our sharemarket has rebounded by 30% and most other international markets have risen by a similar, or larger, amount. Given the indisputably dominant role the "market" has on returns, some investors choose not to bother with stockpicking at all and simply seek to track the market by investing in broad, low-cost, index funds. Their returns will simply follow the market, less the index fund fees and any tracking error. And there are an increasing number of good index funds with very low fees, of 0.25 per cent a year or less, becoming available. **End Summary** Topics: sharemarket]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit www.craigsip.com Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. It is one of New Zealand's largest and most established investment advisory firms. Services offered include: Sharebroking , Portfolio Strategy and Management, Retirement Planning and Superannuation and more.

Uncertainty In Investing Is the Enemy - Not the Bank

Thu, 26 Nov 2009 21:41:19 -0500

I have noticed that when many Kiwis join the world of investing in bonds and shares, their aim is to achieve a return that "��beats the bank"��. Using bank deposits as your performance yardstick in this way arguably misses the whole point of investing. The bank is not the enemy, uncertainty is. People who invest their capital in a wide range of assets that together form a diversified portfolio do so for one reason, and its not to "��beat the bank"��. The goal is to protect themselves against uncertainty and risk. Nobody knows when or where the next financial crisis or dramatic shift in markets or economic fortunes will happen. The vast weight of research to date shows that investing a portfolio across a diversified range of assets is the best way to mitigate risk, generate an income and to protect and grow capital over the longer term. One stark lesson I have seen over the 20 years I have been in the investment sector is that uncertainty and risk can come from anywhere. Even investments that "��look safe"�� can get caught out. **End Summary** Topics: investing]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit www.craigsip.com Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. It is one of New Zealand's largest and most established investment advisory firms. Craigs Investment Partners is 100% owned by certain staff and close business associates.

10 Things To Consider When Looking At Investments

Thu, 26 Nov 2009 21:40:46 -0500

After such a tumultuous year for investors it can be helpful to come back to some basic principles. Here are five do"��s along with five don"��ts that we believe are good advice at any time, but especially in the aftermath of the global financial crisis. Let"��s start with the Do"��s. 1. Be cautious. Having a conservative bias makes mathematical sense. If you lose 50 percent of your capital you need to earn 100% to get back to square one. This most basic mathematical fact is justification enough for a cautious bias when investing. It is better to miss out on some upside in order to protect your capital against downside. 2. Have realistic return expectations. Over the long haul fixed income investments like deposits and bonds will return between 4% and 7%, while property and shares have averaged returns of 7% to 10% a year. A balanced portfolio, depending on the mix of assets, might therefore be expected to deliver a return of 6% to 8% a year. After tax and inflation are deducted this return may translate into a real net return of 2% to 3% a year. **End Summary** Topics: investments]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit www.craigsip.com Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. It is one of New Zealand's largest and most established investment advisory firms. Craigs Investment Partners is 100% owned by certain staff and close business associates.

Is It Too Late To Buy Shares?

Wed, 04 Nov 2009 16:58:34 -0500

Since March our market has risen by 24%, posing a dilemma for people looking to buy. Should they buy now in the hope that the rally will continue, or are they better to wait, on the basis that the market has run too hard and a pull back in prices is inevitable? Since 2004 our market has given investors a rollercoaster ride. From 2004 to 2007 it rose 50% on the back of the global economic boom. Then, from October 2007 to March 2009, as the recession and global financial crisis started to bite, it fell by an unnerving 40%. But it has staged a remarkable 24% recovery since March. Before we get too excited, we should acknowledge that even though it has bounced beautifully over recent months, the market is still 27% below its 2007 peak. It needs to gain a further 38% to regain this 2007 high point. Therein lies a very important lesson for investors of shares. Notice that the 40% decline requires a recovery of over 60% to get the market back to square. Such is the brutality of maths - losses require gains of a much higher magnitude to get back to the starting line. **End Summary** Topics: shares]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit www.craigsip.com Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. It is one of New Zealand's largest and most established investment advisory firms. Services offered include: Sharebroking , Portfolio Strategy and Management, Retirement Planning and Superannuation and more.

Shares Need To Become More Likeable For New Zealanders to Invest in the Sharemarket

Wed, 04 Nov 2009 16:56:53 -0500

Shares are not a very popular investment with New Zealand investors. For the good of our economy and our investment portfolios, shares need to win a few more friends. Only around 10 percent of New Zealanders own shares compared to over 40 percent of Americans and Australians. You can point to many reasons for why shares are so much more popular overseas than they are in New Zealand. For starters, our alternative investments are so much more attractive than they are overseas. Even though our government stock rates and term deposit rates are currently only barely over 4 percent, they remain the highest in the developed world. Investors overseas are lucky if they earn 0.5 percent on cash and 2 percent on bonds. New Zealanders are happy to stick their savings in fixed income where the returns are okay, than bother investing in the sharemarket. The other alternative to shares is of course property. It has done exceptionally well for New Zealand investors since the 1960s and remains an important and excellent investment. The elephant in the room is of course tax. **End Summary** Topics: shares]]> share market]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit www.craigsip.com Cam Watson is the Chief Investment Officer for Craigs Investment Partners (formerly ABN AMRO Craigs), which is one of New Zealand's largest independent investment firms.

An Investment Review of Dr Mobius' Advice

Sun, 18 Oct 2009 17:23:43 -0400

Dr Mark Mobius is one of the most renowned fund managers in the world. The Templeton Emerging Markets Fund that he manages has risen 11-fold since its launch in the late 1980s. This equates to a return of over 12% a year. In a recent interview with The Times Online in London Dr Mobius offered some advice for investors. As investment advisors ourselves, we thought it worthwhile taking a closer look at his advice.His first piece of advice was to keep an eye on value. It is no surprise to us that this was his first point. He is famous for his value approach. He looks for companies trading below their book value, or at a very low multiple of earnings. He also advises people don't follow the herd. By this he is referring to the fact that markets often act irrationally. During good times they can become overly exuberant and during tough times they can fall well below fair value. It often pays to buy when others are selling, and sell when others are buying. According to Mobius, investment is a long-term endeavour. **End Summary** Topics: investment]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit www.craigsip.com Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. Craigs Investment Partners is 100% owned by certain staff and close business associates. Services offered include: Sharebroking , Custodial Services, Foreign Exchange, Asset Allocation, Cash Management and more.

Investing? Emerging Markets Warrant Attention, And Care

Sun, 18 Oct 2009 17:21:17 -0400

If you are looking into investing it must be noted that emerging markets are attracting a lot of attention from investors at present. This enthusiasm is warranted on many counts, but investors delving into the developing world need to be aware of the risks that come with investing in these markets. I recently met with the managers of the Eastpoint Global Emerging Markets Fund, an Australian fund that invests in emerging markets. They made a strong case for why emerging markets may do better than developed markets over coming years. One of the main reasons developing countries have the potential to recover faster than developed countries is that consumers have much less debt in emerging countries than in developed countries.Mortgage debt across developed countries is around 55% of GDP, while in emerging markets it is closer to 15% of GDP. Households in countries like China save a much higher proportion of their income. This high savings ratio has meant the developing world has largely side-stepped the implosion of the debt bubble that has so impacted the developed world. The Anglo-Saxon countries, where the debt and housing bubble have been most pronounced, have been the hardest hit. **End Summary** Topics: investing]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit www.craigsip.com Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. It is one of New Zealand's largest and most established investment advisory firms. Craigs Investment Partners is 100% owned by certain staff and close business associates.

Investment Opportunity in New Zealand - Why Are We So Lucky?

Sun, 30 Aug 2009 21:12:26 -0400

As interest rates have plummeted over the past 18 months, investors have scrambled to lock in long-term income streams. But as difficult as the low interest rates have been, New Zealand investors, compared to their counterparts in other developed countries, are still spoilt for choice when it comes to the opportunity for income investments. New Zealand�"'""s wholesale deposit rates are more than three times as high as those in the northern hemisphere economies. In Britain and Europe three month rates sit around 1% when ours are over 3%. You have to feel for the Japanese and Americans who earn virtually nothing on their cash. When you look at these low figures in places like Japan, it is little surprise that the Japanese see the opportunity to pour money into New Zealand investments via term deposits and bonds. Longer term interest rates are also higher in New Zealand than elsewhere. We can actually receive relatively high rates by buying bank term deposits or corporate bonds rather than government bonds, but the difference in the level of interest rates across countries is roughly the same. New Zealanders can earn 5.7% in 10 year government stock compared to around 3. **End Summary** Topics: investment opportunity new zealand nz]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit www.craigsip.com Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. It is one of New Zealand's largest and most established investment advisory firms and is 100% owned by certain staff and close business associates. Services offered include: Sharebroking, Portfolio Strategy and more.

Investments - FAQs for New Investors

Sun, 23 Aug 2009 21:47:46 -0400

This article provides some straightforward answers to some of the most often asked questions from people who are new to investment. What is fixed interest? Fixed interest describes fixed term deposits like bank deposits, cash management accounts, debentures as well as bonds like government stock and company bonds. Fixed interest investments pay interest, usually every six months or quarterly. On maturity the investor is paid back what they invested. Fixed interest is a very good investment, especially for people looking for a low risk investment and a reliable source of income. The major disadvantage with fixed interest is that the returns from it are relatively low and therefore it provides little protection against inflation. What are equities? Equities is another name for shares. The word equity is derived from the latin word aequitas, meaning equal ownership. This aptly describes shares, which are essentially part ownership of a company. For instance, if a company has 100 shares in total and you own 10 shares, you own 10% of that company. Why does everyone worry about inflation? The goal of investment is to ensure you can maintain your standard of living in 20 or 40 years time. **End Summary** Topics: investments]]>]]> About the Author: ]]> This is a modified article from Cam Watson. To read the complete article visit www.craigsip.com Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. It is one of New Zealand's largest and most established investment advisory firms . Craigs Investment Partners is 100% owned by certain staff and close business associates.