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KEEPING YOUR EYE ON THE BALL IN A DIGITAL WORLD

This article is not intended as financial advice so if you require financial advice see your bank manager, financial advisor, or budget advisor

How to be money smart in a digital world

Written by R. A. Stewart

It is important to be smart in this digital world we live in and that applies particularly in the banking world. With digital currency and in particular Bitcoin gaining in popularity one needs to keep their eye on the ball in order to avoid being scammed.

Investing in Bitcoin, litecoin, or whatever digital currency you use is speculative therefore it is imperative that you invest only discretionary money in these things. That is money left over after paying your important household expenses.

Visa debit cards issued by the banks are recommended for use over the internet rather than credit cards; the difference between the two is that with debit cards you are using money on the card. If there is just $200 on the card then that is all you can spend. You simply top up the card regularly by making transfers from your everyday account.

When you use a credit card you are spending borrowed money and there is a cost to this. If a scammer gets hold of the card details then you are in trouble.

I will tell you a couple of stories;

A lady who is as financially dumb as it is possible to be had her benefit paid into her visa debit card and when her benefit money disappeared from the card she went to the police and accused her nephew of stealing the money. Do you see the first mistake she made?

Having your pay go into your visa debit card which is also used for buying off the internet is downright stupidity. The police could not find any information linking her nephew to the disappearing money. They said, “It looks like the money went to an overseas website.”

A person with sense would have gone to the bank first and asked them to investigate. Another thing she could have done is check her emails because when a website withdraws money from someone’s account they send the customer an email.

An uncomfortable truth

There is a lot of internet fraud which goes unreported because victims are too embarrassed or proud to admit how stupid they have been to have been scammed. People of all intelligence from university graduates to high school dropouts have been scammed. This issue is no respecter of people, but in the case above, the lady concerned has a very low IQ but that is another story.

In a separate case a young man deposited $3,000 into his everyday account on a Friday then on the Saturday he discovered the money missing from his account. He told the bank on Monday and they did their investigation. As it turned out, it went to an overseas website which he had been purchasing stuff from. The site was hacked and the hacker had access to the banking information. His three grand went into his everyday account but that account was linked to his visa card and that was the mistake he made.

You should never link your main account to your visa debit card. If you do you are leaving the door wide open for scammers. It is also advisable to have an account which is not accessed by the internet for larger sums of money.

In the case above, the bank did the right thing and deposited $3,000 into his account.

These situations are more common than you think so it is up to ordinary people to use their common sense.

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LEARNING FROM PAST FINANCIAL MISTAKES

This article is of the writer’s experience and opinion. If you require financial advice then see your bank manager or financial advisor.

Learning from past investing mistakes

By Robert A. Stewart

“He who never made a mistake never made anything,” but there is no need to make a mistake if you can help it. How? By learning from other people’s mistakes.

The most tragic thing of all is to not learn from your own mistakes; here are some tragic examples which have left people with badly burned fingers.

In October 1987 the sharemarket crashed bigtime; there were horrific stories of mum and dad investors losing fortunes. Leading up to the crash investors would borrow money to purchase shares by using the value of their shares as collateral. As the share values increased, they were able to borrow more and more money. One story I was told was of a man who borrowed money using the value of his home as collateral. 

Many companies were basically called paper shufflers; in order words they were not producing anything tangible but trading in shares.

It took several years before the market recovered.

One should never borrow money to purchase shares which is the first basic lesson of investing.

During the Global Financial Crisis several finance companies went belly up in NZ; these included Provincial Finance, Hanover Finance, Dominion Finance, Lombard Finance, and South Canterbury Finance. There were sad stories with one common one being of investors who had their whole life savings invested in the company. The media’s spin on this is to tell the viewer about the investors who lost everything they invested but that is not the case. The truth is investors were drip-fed money from what the receiver’s could recover.

The investors concerned had a lot to say about all of this but one thing was never mentioned was the fact that they placed all of their financial eggs in one basket. This is a fundamental mistake. In one case, an investor had NZ$400,000 invested in Hanover Finance. One would have thought an investor with commonsense would have spread their money around. 

It does make one wonder whether someone provided this investor with misleading advice. 

The second basic lesson is to not place all of your financial eggs in the one basket.

Crypto currency such as Bitcoin and the like have been very popular during the last ten years. Stories of great wealth have been floating around from time to time of investors who have invested x number of $ and turned it into a fortune worth x. My view of Crypto Currency is that it should be treated as a bit of a gamble where you only invest discretionary income in. Only money you can afford to lose should be invested in crypto currency.

A company called “Cryptopia” which was basically a blockchain which held funds invested in Bitcoin was hacked into and all those with bitcoin invested with cryptopia lost their money. There were some sad stories of an x amount of $ lost.

The third lesson here is to NEVER invest money in cryptocurrency which you can not afford to lose. In other words only use your discretionary money for Bitcoin.

It is certainly well worth remembering that if there is a chance of capital gain then there is also a chance of capital loss. That is the nature of investing.

The bottom line is this; “It is up to YOU, the investor to take responsibility for your mistakes.

www.robertastewart.com

Investing in Gold is worth looking at but like other investments an investor needs to do their research, check out the following;

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FACTORS WHICH DRIVE THE SHAREMARKET

This article is of the opinion of the writer, if you require financial advice then see your financial advisor or bank manager.

Factors which drive share prices

Written by R. A.Stewart

There can be a number of factors which motivate the markets into either direction, but the two factors which are often talked about are fear and greed. It has been said, “You should sell when people are greedy and buy when people are scared.” This is because when confidence is high the markets will go higher but when confidence is down so are the markets.

It is the law of supply and demand. Something is only worth what others are prepared to pay money for. A good example of this is a painting offered at auction. If someone is prepared to pay one million dollars for it then that is what is is worth but if a painting is sold at auction for only $20 then that is it’s value.

Looking at some industries which are likely to be affected by the economy and local trends.

  1. TOURISM/HOSPITALITY (visitors to NZ)

The collapse of the tourism industry due to the closing off of the borders of several countries will affect those companies which rely on tourism. Hotels, airlines, and airports will all be affected as will bus companies that service tourist areas. Many of these companies will not survive during these tough times so they are a risky investment.

  1. FARMING SECTOR (Fluctuating prices)

Companies in the farming sector are largely affected by the price they get for their products from abroad and this could vary depending on the economic conditions in those countries. A worldwide depression will have a major affect on prices as there is less demand for beef and other agriculture products.

  1. CHINA TRADE WAR

Policies by other countries that hamper free trade will see a reaction by the markets and we saw that with some of Presidents Trump’s comments toward China regarding trade.

  1. MOTHER NATURE

As we saw with the Christchurch earthquakes, a natural event can have a noticeable effect on share prices either way. Insurance companies were hit hard by the earthquakes which took the sting out of their share prices, but Fletcher Building were busy after the Quakes with all of the rebuilding.

  1. TRAGEDY

The Pike River tragedy had an effect on the share prices of the mining company in that people who held shares in the company lost the lot, but it serves as a reminder to only use discretionary money in risky stocks and to not place all your eggs in the one basket, but that is not to say that any of the Pike River investors made that mistake.

Even a twitter rant by the President of the United States is enough for the market to react. The market can be very sensitive but at the end of the day it is the emotion of investors behind it. A cool head is needed during times when the market is on a rollercoaster ride and investors who have the right kind of mindset can do well in the markets in the long term.

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ADDING A GOLDEN STRING TO YOUR FINANCIAL BOW

Adding new strings to your financial bow with discretionary income

Unless one is living from one payday to the next most of us have discretionary income which is basically what is left over after paying our fixed expenses. Rent/rates, power, phone, car running expenses, groceries, insurances, retirement savings are all fixed expenses. We do have some say in how much we are spending in some of these areas such as you can find ways to use less power, be more economical with your grocery shopping, or use the car less often.

What is left over is your discretionary spending. 

This spending money can be used for more speculative investments. If you lose your money then the loss of your money is not going to cause you undue hardship.

So where to invest this money? 

There are plenty of options such as crypto currency, investing in gold & silver, and the futures market.

Investing in gold is one option; there are different paths to take, they are:

(1) Purchasing shares in companies which mine gold

(2) Purchasing gold coins

(3) Investing in gold bullions

It is important to diversify but this may not always be practical for someone with limited means. Fortunately, Sharesies in New Zealand offers investors the chance to buy into the sharemarket with a minimal amount of money. If you are not from New ZEaland it is best for you to take a look at what options are available to you.

If you are going the sharemarket route then do your research on the mining companies and their track record. Also take note of whether the area they mine has met with opposition from environmentalists.

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HOW TO GET RICH OR LOSE YOUR SHIRT TRYING

The views expressed in this article are of the writer’s own opinion and do not represent financial advice. If you do require financial advice then see your bank manager or financial advisor.
How to get rich or lose your shirt trying
By R. A. Stewart
“Just how can I get rich on the stock exchange.” That is the $64,000 question, one that has no definitive answer. The question should really be, “How long will it take for me to get rich on the stock exchange?” Investors who have kept up to date with the financial stuff in the newspapers and TV will know that the sharemarket is a long term game. It is time rather than timing which is the key, however, having said that, it is unrealistic for someone aged 60 to have a 30 year plan to make money on the markets.
A younger person, on the other hand is able to take more risks, because they have more years left to recover from financial setbacks.
Share prices do not always represent true value just as at the race track where the horse’s odds do not represent their true chances of winning the race. The share price is a reflection of the opinions of investors, this opinion can be based on fears, hope, or just plain greed. The share price will move in either direction on the back of news about the company.
The mum and dad investors who buys and sells shares is competing with some very astute investors. Many of whom are the best financial brains in the country, however if you have invested in managed funds as everyone enrolled in kiwisaver has you will have the benefit of these brains who are emplyed as fund managers working on behalf of you. There are other types of investments where you are able to dripfeed money into the sharemarket. Sharesies is one of these; you have the option of investing in managed funds or individual companies. This will give you experience and knowledge of how the market works. Another string to your financial bow you might say.
Someone’s loss can be your gain; when others are selling their shares you buy. There can be some good bargains in the sharemarket when investors are pessimistic and you can take advantage of this. We have seen with the coronavirus pandemic that the markets are struggling with the worst affected companies being airlines and other companies connected to tourism. They can bounce back once this is all over.
Many companies have professional directors whose task is to boost the image of the company. They do little else except be paid for the use of their name.
It cannot be stressed enough that if the possibility of loss is going to cause you sleepless nights then stay out of the sharemarket. Life is too short for it not to be enjoyed.
You should however still be signed up for the kiwisaver retirement scheme, because if you are not you are missing out on the $520 per annum government contribution and the 3% employer contribution. To receive the $520, you must contribute at least $1040
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HOW SHAREMARKET FORTUNES ARE MADE

The views expressed are of the opinion of the writer and do not represent financial advice. If you seek professional financial advice see your bank manager or other qualified professional.
Tomorrow’s sharemarket fortunes are made today
Written by R. A. Stewart
Did you know what you do with your money today can really make a difference to your future wealth? Fortunes are made in the sharemarket when you invest in shares not when you sell them. With the values of some sharemarkets on the slide in recent months (March/April 2020), it is an opportunity to pick up some shares at a bargain price.
Think of it as though you are supermarket shopping. Wouldn’t you be tempted to purchase fresh in season fruit at a low price instead of imported out of season fruit?
Tomorrow’s sharemarket fortunes are made today. The key is to buy low + time = sell high.
It has been said it is time not timing which is the key to building your wealth in the sharemarket.
The young have an advantage over the not so young in that they have time on their side.
That being said, even if you are approaching your retirement age you can take advantage of the next rising market.
You may have another ten, fifteen, twenty, or thirty years of life left in you; the determining factor in choosing where to invest your money is the time between now and then when you may need the money. It is a good idea to invest your money in several areas. That is in a conservative, balanced, and growth fund according to the purpose of the fund. That way if you need money at short notice you would use the money in your rainy day fund which should be in conservative funds or in an ordinary savings account.
It all boils down to developing the savings habit when you are young and continuing that throughout your life irrespective of how the markets are performing.
During the Global Financial Crisis (GFC) in 2007-2008, some of the companies I had invested money in went bellyup. Lombard Finance, Dominion Finance, and Provincial Finance. They were offering good rates on fixed interest deposits and the money I fell for it. I did get some of the money back which I deposited into my kiwisaver account.
I also had money invested in a carpet company named Feltex on the sharemarket and lost that as well during the GFC.
These losses did not deter me and I invested $500 in a managed fund through the Public Trust at around the same time. I invested $100 at a time into this fund and by the time it grew to $1800 stop contributing because I preferred to invest my money into my kiwisaver retirement fund. However the $1800 grew to $3,000 without any further contributions when I withdrew the money because the Public Trust were ending those types of investments.
If you want your ship to come in you have to send one out in the first place, not just one but several, and you shouldn’t wait until conditions are just right. Do it today!

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YOUR INVESTMENT GOALS

The information in this post is the opinion of the writer and is not considered as financial advice. If you need advice of a financial nature, see your bank manager or other financial advisor.
Taking stock of your investment goals
The sharemarket will be volatile for the duration of the Covid-19 outbreak and even longer, possibly not until 2022 will there likely to be a settling down period when the markets will recover so what should your strategy be?
If you are close to retirement and have seen your funds dwindle, that is up to you. Myself I think it may pay to just ride it out because investing in the markets is a long term game.
To change funds from growth or balanced to conservative funds will be like closing the stable door after the horse has bolted.
The damage has already been done. To be panicked into selling during a bear market is to take a loss and miss out on the gains once the market recovers.
A bear market is a buyer’s market and that is when it is most profitable to purchase shares.
The fund you chose for kiwisaver or mutual funds needs to be the right one.
The three main factors for choosing the right fund for you are;
1. The number of years left before you reach your country’s retirement age.
2. Whether you are going to use your kiwisaver as a deposit for your first home.
3. Your risk tolerance
Another factor is any medical condition which will reduce your chances of reaching the retirement age.be
There are three time frames which need to be considered, namely;
The short term (up to 1 year)
The medium term (within 5 years)
The long term (more than 5 years)
The number of years you have left before being eligible to withdraw your retirement fund is dependant on your age. This for most people is the criteria for choosing your fund type, (growth, balanced, or conservative,) but not necessarily because in New Zealand anyone can use part of their retirement fund as a deposit for their first home at any age. Furthermore, homebuyers are eligible for a grant depending on how long they have been enrolled in kiwisaver which makes joining kiwisaver a no-brainer.
The markets are on a rollercoaster ride, they go up and down and the worst thing which can happen is to save hard for a house deposit only to discover you have less money than what you had actually deposited in kiwisaver by the time you withdraw the money for your house deposit.
This is the reason why those saving for a house deposit in the short to medium term are advised by financial experts to invest in conservative funds.
The flip side to this is the slow returns because if you are saving money during a rising market your savings can quickly grow.
If you have zero tolerance to risk then the conservative funds may be your answer to a good night’s sleep.
Those aged forty and under may be advised to invest in Balanced or Growth Funds because they have time on their side for the markets to recover losses after a crash.
Your fund manager may be in charge of your investment but it is still your responsibility to plan for your future and set your own goals. No one can do it for you. Your goals, age, and risk profile will all determine which fund you should be in.
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MUM & DAD SHAREMARKET TIPS

The article below is the opinion of the writer and does not constitute financial advice. If you require financial advice see your bank, financial advisor, or budget advisor).
Which companies to invest in?
Written by R. A. Stewart
A look at the sharemarket pages look depressing reading for those who have a sharemarket portfolio. Most people have a retirement fund of some sort. In New Zealand that is kiwisaver which most people in paid employment are enrolled in. The self-employed and those classed as not working are eligible to join kiwisaver by making their own voluntary contributions. Even minors are eligible to join and have done so.
KIwisaver as with mutual funds in other countries are structered to minimize the risk of loss by spreading your investment around several different companies and in different types of industries. When one industry is in a downturn then others that are doing well help compensate for the poor performers.
The current situation is that it is not just one industry in a slump due to COVID-19, it is most of them.
Your fund manager should really be smart enough to know what he or she is doing with your savings for that it is what they are paid for so it is best to leave them to deal with your investment but there are other options for investing in the markets where you are able to buy shares in individual companies and you do not need to have much money. In fact you only need $20 (NZ) to kickstart the investment.
SHARESIES
Has anyone heard of Sharesies?
This is a New Zealand managed fund where individuals are able to dripfeed money into the sharemarkets.
As with kiwisaver, Sharesies has several types of funds with various level of risk you can invest in. It also gives investors the opportunity to buy into various companies even with as little as $10 or $20.
This is a great way for Mum and Dad investors and their kids to learn about the markets and grow their wealth at the same time.
So which company or companies should you invest in during the current state of the market (2020) where there are falls across the board?
Answer this next question and it will give you the answer to the previous one.
Which sector is going to be unaffected by coronavirus (Covid-19) shutdowns by various countries?
Here is a sample of various industries;
Banking (ANZ, BNZ, ASB, Westpac, etc)
Airlines (Air NZ)
Tourism (Tourist Holdings, Auckland Airport etc)
Retail (Briscoes, Hallenstein Glassons, Warehouse, Micheal Hill etc)
Insurance (Amp, Tower)
Telecommunications (Spark)
Power (Genesis Energy, Meridian Energy, Contact Energy, Trust Power etc)
Dairy Products (Fonterra, A2 Milk Company)
The banking sector is affected by the market downturn because they lose a customer each time a business goes bellyup which is the case in this business climate not to mention the job losses which will leave some unable to pay for their mortgage.
Airlines are an obvious no go for the investor since some countries have closed their borders to foreigners. In Air NZ’s case, they will have to be bailed out by the NZ government.
The collapse of the tourism industry has also left this sector a no go area.
Some retail outlets which are considered essential services will remain open during the New Zealand’s shutdown but those I have listed are not among them and will suffer financially during New ZEaland’s lockdown.
Insurance companies are subject to Mother Nature but may be worth a nibble.
Spark have experienced a huge increase in internet usage during the lockdown and so are worth including in your portfolio.
Everyone uses power to light and heat their home. It is one of life’s basic essentials. Even during a recession, people will still use power in one form or another. Even when the sharemarket is falling, the price of power companies will remain steady.
Dairy companies are subject to demand from China and the price Fonterra receive from abroad so can be volitile, however, they are a reliable company with a lot of safeguards against an economic downturn and just like power companies, provide one of life’s neccessities.
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CORONAVIRUS NEEDS INVESTIGATING

Investigation into covid-19 needs to happen
Written by Robert Stewart
There is a lot of speculation online as to the origins of coronavirus with the most likely source being an animal market in Wuhan, China. It is understood that in these markets animals are kept in such unsanitary conditions that it would be considered animal cruelty in other countries. Yet it is not the first time such a virus has began its destructive life form in humans in this way. Sars being another.
Another theory being put forward is that coronavirus started in a Wuhan lab. This one has been suggested by some American politicians. There is an old saying, “There is no smoke without any fire,” so this one has possibly some merit but it is difficult to find proof without evidence and China is hardly going to cooperate with any investigation especially if it has done wrong.
America, and in particular President Trump are not afraid to point their finger toward China’s direction. It is a pity other countries will not follow suit. I suspect so many of them rely on China for trade and tourism that they are too afraid to speak out for offending their Chinese trading partners.
What seems to be at the heart of the world’s problems is that there is no country that is answerable to a higher authority. Sure some rogue nations have sanctions placed against them for their actions but many first world countries can hardly claim to be squeaky clean as far as human rights and other issues are concerned either.
Arrogance seems to be the problem. No one tells us what to do!
Is it any conincidence that the worst affected countries from covid-19 are the USA and UK, both considered parent countries to so many others. Some of the smaller countries had at least had rthe humility to look at what has happened in other countries with covid-19 and learn from how they have dealt with it; not just their successes but also their mistakes. Arrogance say, “We’ll do it our way.”
There is no doubt that an investigation needs to be conducted into the origin of coronavirus but who is going to force China to co operate?
Australian Prime MInister Scott Morrison made mention of the need for an investigation into how coronavirus started and China threatened to not take their meat exports.
What have they, (China) have got to hide?
How other countries behave affects others, one perfect example of this is the migrant crisis which was brought about by human rights abuses in certain countries.
The United Nations, World Health Organisation (WHO), Human Rights Commission, and Amnesty International do good work in the world but none of them have any authority to force a particular country to do such and such.
There needs to be an organisation which all countries are subject to.
As for China using it’s economic might to throw it’s weight around, I think New Zealand, Australia, and other countries need to broaden their horizons and seek new markets. Taiwan, Singapore, and South Korea have all been responsible in dealing with covid-19 so why not explore their markets and open tourist routes with those countries?
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HOW TO PROTECT YOURSELF FROM COVID-19

COVID-19(Coronavirus)updates

How to protect yourself and others

Covid-19 is an illness that can affect your lungs and airways. It is caused by a virus called coronavirus. There are simple measures you can take to help spread the disease and protect yourself and others.

What are symptoms of Covid-19?

Symptom of CVID-19 are:

*a cough

*a high temperature

*shortness of breath

These symptoms do not necessarily mean you have COVIS-19. THe symptoms are similar to other illnesses that are much more common, such as cold and flu.

However, infections with mild symptoms such as cold-like symptoms or no symptoms are likely, but it is not known how common this is.

How to protect yourself and others

*Cough or sneeze into your elbow or by covering your mouth and nose with tissues.

*Put used tissues in the bin or a bag immediately. 

*Wash your hands with soap and water often.

*Try to avoid close contact with people who are unwell.

*Don’t touch your eyes, nose, or mouth if your hands are not clean.

*Clean and clean frequently touched surfaces and objects, such as doorknobs.

*Stay home if you feel unwell and call Healthline 0800 358 5453 (New Zealand only)

Visit www.health.govt.nz/covid-19 for more information.

New Zealand News updates

*All those arriving into New Zealand MUST self-isolate for fourteen days.

Action will be taken against those who flout this rule including deportation for foreigners.

*School sport canceled indefinitely

*The New Zealand government urges its citizens abroad to return home.

*Jacinda Ardern says, “Do not travel overseas.”

*The New Zealand border is now closed to non-NZ citizens & non NZ residents with exceptions for some essential health workers.

*39 cases people have tested positive for COVID-19 in New Zealand with 11 new cases reported yesterday. All with a link to overseas travel.

PROFESSIONAL SPORT AFFECTED.

*The NZ Warriors rugby league team is based in Australia indefinitely

*The Wellington Phoenix football team will base themselves in Australia.

*Horse racing will take place without race goers

*Super rugby on hold

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