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THE SMART INVESTOR

The low interest economy

Low-interest rates are challenging. To meet this challenge it is important your investment strategy is match fit for today's environment and that you take a long-term approach. In our view, what we do as an active manager, seeking to beat the market, has become more important than ever.

Interest rates are falling and have been falling for many years and low rates present stern challenges. It makes it harder to save towards a retirement nest egg and harder to live off that nest egg in retirement.

Here we discuss low interest rates and the areas we believe we make a real difference.

Build a match fit strategy
Develop an investor's mindset
The role of active management

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Low interest rates are here to stay


A rapidly changing world

Low interest rates are not a fleeting phenomenon. We all must adapt.

Growth and inflation determine the level of interest rates in an economy. We see three key factors which are likely to suppress both economic activity and prices in the years ahead, keeping interest rates low:

  1. Too much debt
  2. Aging populations
  3. Technological advancements.

These secular trends suggest interest rates of the 80's and 90's are unlikely to return. Low interest rates create unique challenges for us all. We must embrace an investing mindset as savers are the losers in this environment.


Build a Match Fit Strategy

Don't outlive your savings, make your money work harder for you.

Getting the right strategy is the first step in meeting the challenge of low interest rates. For many clients this may mean investing more of your portfolio in growth assets while still acknowledging that a well managed allocation to fixed income has an important role to play in protecting you in the tough times that will invariably come. You also need to make your money work harder. This means being dynamic in managing your wealth, adjusting your strategy as you reach long term objectives or changing spending or saving as circumstances change. Working closely with a financial adviser is more important than ever.

Outliving your savings

Develop an investor's mindset

Stick to process and focus on the big picture.

Investing more in growth assets means your returns will be more variable week by week, month by month but, in the long term, your returns should be better. This variability in returns can be challenging – it's great when it's working for you but not so much fun when markets fall. This is where an investor's mindset can help. By investor's mindset we mean having clear expectations about how the returns on your investments might vary over time. Being well informed means you are well armed to avoid unpleasant surprises.

It is important to have a clear process for managing emotions through difficult market environments. Take A2 Milk as an example, the graph shows 4 occasions where the share price has fallen materially over the past 6 years. If you had panicked and sold you, would have missed out on a ~1,600% return.

Bumps in the road

The role of Active Management

$100,000 invested in our New Zealand Growth Fund in 1998 is worth over $1.2 million today.

Active management is at the heart of what Fisher Funds does as an investment manager. We seek to hand pick individual companies and fixed income investments that will do better than the market average. We have been successful in doing this for over 21 years, and, in our view, active management is going to be even more important over the next 21 years.

A low growth, low interest rate environment invariably means market returns will be lower than they have been. This makes any extra return we can generate through finding the best investment opportunities a bigger part of your overall return.

Fisher Funds difference

TAKE CHARGE OF YOUR FUTURE

We have flexible investment options with varying degrees of risk to help you achieve financial freedom down the track.

KIWISAVER

KiwiSaver is a voluntary, work-based retirement scheme with the potential for added contributions from the Government and your employer.

MANAGED FUNDS

With our Managed Funds you can invest like a millionnaire even when you're starting out. Whether you're investing with $100 a month or a lump sum you'll be invested in a diversified portfolio of assets, all managed by us: an experienced investment manager.


PRESENTERS

Frank Jasper

Frank Jasper

Chief Investment Officer

Cath  Lomax

Cath Lomax

Chief Client Officer

David McLeish

David McLeish »

Senior Portfolio Manager — Fixed Interest

Ashley Gardyne

Ashley Gardyne »

Senior Portfolio Manager — International Shares

Sam  Dickie

Sam Dickie »

Senior Portfolio Manager — New Zealand Shares and Property & Infrastructure

Robbie Urquhart

Robbie Urquhart »

Senior Portfolio Manager — Australian Shares

ADVICE TEAM

Cath  Lomax

Cath Lomax

Chief Client Officer

Vicki Watson

Vicki Watson »

Senior Wealth Management Adviser

Allan Carella

Allan Carella »

Head of Advice Development

Dal Jandu

Dal Jandu »

Senior Wealth Management Adviser

Kieron  Williams

Kieron Williams »

Senior Wealth Management Adviser

Louise  O'Brien

Louise O'Brien

Senior Wealth Management Adviser

Aaron  Hinks

Aaron Hinks »

Wealth Management Adviser

Guy  Sloan

Guy Sloan »

Wealth Management Adviser

Stephany  van der Werf

Stephany van der Werf

Wealth Management Adviser

Sharon Webber

Sharon Webber »

Wealth Management Adviser

Carl  Brungar

Carl Brungar »

Senior Client Adviser

Elliott  Young

Elliott Young

Senior Client Adviser

Junior  Asilusi

Junior Asilusi

Senior Client Adviser

Kerry  Stretton

Kerry Stretton

Senior Client Adviser

Tomas Thurston

Tomas Thurston »

Senior Client Adviser

Helen Ottow

Helen Ottow

Wealth Administration Manager

Rebecca Nolan

Rebecca Nolan

Wealth Administration Manager

Nick  Zwi

Nick Zwi

KiwiSaver Specialist

Antonio  Lucero

Antonio Lucero

KiwiSaver Specialist

Annika Shallard

Annika Shallard

KiwiSaver Specialist

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