The unexpected can always happen but at this early stage of 2020, all indications are that the year should be good for our investing clients. The threat of a global recession seems to be staying away. The uncertainty around Brexit and the US/China trade war seems to be factored into market prices and any quick resolution of these will see financial markets respond positively. On the whole, companies are doing well and producing good profits, and this contributes to strong share prices. Global and local interest rates are at historical lows. This helps to stimulate investment and rising share prices, but it does reduce income flows for those wanting retirement income from term deposits. House prices have started to rise again in New Zealand albeit at a slower rate to that of the past five years. The proposed massive investment into infrastructure in New Zealand should see our economy continue to grow throughout 2020.
However, these things can never be guaranteed so it does not pay to have all your eggs in the one basket. Diversification of your investment portfolio is still critical to reducing risk. The outbreak of the Coronavirus and the unease it is causing globally will have an impact upon investor sentiment and some investments. However, the severity of that impact is currently unknown and will be dependent upon how quickly the virus can be contained and how quickly things return to normal.
Give one of our advisers a call if you wish to discuss your investments and how they are positioned for the year ahead.