INVESTING for a good life - MEDIAKIT2018
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
INVESTING
for a good life
MEDIAKIT2018
Welcome
JUNO is a quarterly luxury investment and lifestyle publication that
starts conversations about money. JUNO is about educating Kiwis in
plain English about their financial options: investments, the markets
and building wealth. JUNO readers are investors, from the beginner in
KiwiSaver to the sophisticated with a diversified portfolio.
Our readers are people with money to invest and money to spend.
Jacqueline Taylor
Co-founder/Editorial Director/Publisher
JUNO offers
we simplify investing junoinvesting.co.nz we simplify investing junoinvesting.co.nz
1
BITCOIN BOMB
Ethical Investing Why you should hold off
The hottest share
GO RURAL
Expert investing commentary
market trend
A new field for investors
AG
T H EE S
Low Interest Rates
Will they continue SOLAR SAVINGS
SH
Will you get your
AA
to fall?
NRDE SMA
money back?
Boot Camp
TAG
ROD DRURY
RK
Get your money
ES
The leadership revolution
ET
working harder
and beautiful lifestyle content.
INVEST
2 Access to a niche industry. Bulls, ER
2017 - IS
SU
M
SUM
E 15
Bears,
- TH
-
ET
SH
K
R
E
ARE MA
& Booms
The Share Market Explained
The psychology
of investing – p35
3
Regaining trust in the
investment system – p40 OUTSIDE THE BOX
Easy to understand content
WI
SUMN TE
NZ$9.95 INC. GST NZ$9.95 INC. GST
MR
Analysing the share
E R2 201
017 7- -I SI S
9 772422 894000
market sectors – p44
9 772422 894000
SUE
S UETH
FIIFRTE
TE EEN
Superyacht Style Easter Island Mysteries Tastes of Hawke’s Bay Coasts & Ghosts • Tech Toys • Money in Honey • The FX Factor
with simplified investing
N
concepts.
YOU R I N V E S T I N G P E R S ON AL F I N AN C E
John Berry
4
On Your Markets,
A wide reach from beginner Get Tech, Go!
Tech disruption is great for consumers. It’s even
better for investors, as it can make (or break)
investment returns, writes John Berry.
investors to high-net-worth Unexpected product developments can slash prices, make existing technology
obsolete, or create valuable new markets.
In 2017, the five largest US-listed companies were all from the tech sector:
Apple, Alphabet, Microsoft, Amazon, and Facebook. This is a first – not even
during the dotcom boom was tech so dominant.
Disruptive technology has high potential returns. In the last two years,
individuals.
technology stocks have delivered investors returns that are well above average:
49 per cent over 2016–2017.
But tech can also turn winners into losers. Kodak dominated photographic
film sales for decades, with nearly 90 per cent of the US market. Yet it didn’t
commercialise its digital camera invention, fearful of disrupting its market.
Canon, Sony, and Nikon took over and Kodak, which used to be one of the
world’s most valuable brands, went bankrupt in 2012.
What you should know about technology
Before investing, it’s wise to start by examining the unique features of the tech
industry.
• Tech growth should not be underestimated. Our brains are wired to
visualise growth as linear (i.e., a straight line). But technological change is
5
exponential (becoming more and more rapid). Tech share prices can move
much faster (both up and down) than you’d think possible.
A high-quality magazine with
• Innovation can create monopolies. When a new idea grows into a well-
established tech business, it can have few competitors, high entry barriers,
and high margins. These are characteristics of a monopoly (a company that
can control its market).
sophisticated design. 32 JuNO / AUTUMN 2018 33 JuNO / AUTUMN 2018
YOUR INV E STING PE RSONAL FINANCE
6 Distribution to investing
clients, luxury hotels, airport
Mānuka Honey
The Buzz About
Amy Hamilton Chadwick
lounges, supermarkets and It’s almost a magical product, with multiple health-giving
properties, but can mānuka honey also boost your bank balance?
Amy Hamilton Chadwick finds out how to get money out of honey.
book stores.
Is there any other investment like it? It is an environmentally positive,
sustainable, ethical, pharmaceutical, vegetarian, gluten-free,
dairy-free food – with the potential to provide outstanding returns.
Mānuka honey is a product that commands a premium price and is in
demand around the world. Produced exclusively in New Zealand, mānuka
honey is a future economic powerhouse of a product for our country.
Active ingredients are powerful
What makes mānuka honey so special? It has a unique nutritional profile
that includes impressive antibacterial factors, making it useful medically
as a wound dressing. Local honey manufacturers now grade the efficacy
of different honey using the Unique Mānuka Factor (UMF) rating system,
from UMF 5+ to UMF 25+.
7
There’s no hard evidence that mānuka honey works as an antibacterial
when it’s eaten, but people like the fact that it’s resistant to superbugs,
makes a delicious sugar replacement, and is generally free from side effects
Tools readers need to
(unless you have an allergy).
Now mānuka honey’s made its way into skincare as well. There’s been a
recent surge in mānuka honey used as an ingredient in premium products.
It even has the celebrity seal of approval from chef Jamie Oliver, socialite
Kim Kardashian, and actor Scarlett Johansson.
Images supplied by Comvita
create wealth. 58 JuNO / AUTUMN 2018 59 JuNO / AUTUMN 2018
Some of the brands that have advertised with us
YOUR INVESTING The ultimate
2016 - I
G S
N
SU
I
SPR
E TEN
CONTRIBUTORS C
HO
ICES
trading
experience
01. MICHAEL BIGNELL 02. PA U L G R E G O R Y 03. A M Y H A M I LT O N
CHADWICK
04. MARTIN HAWES
Michael Bignell is a Partner Paul is the Director, External Amy Hamilton Chadwick Martin is a financial columnist
at PwC's Auckland office Communication and Investor specialises in property and finance for the Sunday Star-Times and
and provides tax advice to a Capability, at the Financial journalism; she has been a writer financial author of 20 books. He is
diverse range of businesses and Markets Authority. He was and editor for almost 20 years. an Authorised Financial Adviser
individuals. previously with the NZ Super Amy is a former editor of NZ and offers his services throughout
Fund, in communications and Property Investor magazine and is New Zealand. He also presents at
investment roles. a registered financial adviser. seminars.
05. BERNARD HICKEY
06. M A R Y H O L M 07. J U L I A N J E S S O P 08. ROSS KNIGHT
Bernard Hickey is an independent Mary is a financial columnist for Julian is Director and Chief Global Ross Knight is a senior barrister
economic commentator based in the Weekend Herald and author Economist at Capital Economics, in Auckland and is one of New
the Parliamentary Press Gallery of five books. She is a member of based in London. He contributes Zealand’s leading relationship
in Wellington. He produces a the Financial Markets Authority extensively to the company’s property and trust law specialists,
daily subscription news email on board and a seminar presenter. Global and Commodities services working on complex financial
the political economy. and is an expert on the US, cases in New Zealand and
Europe and Asia. internationally.
Behind your trade is a world of
innovation, research and analysis
With advanced charting, cutting-edge tools and real-time alerts,
every part of our award-winning Next Generation trading platform
is designed to help you take a better position.
09. CAROLINE RITCHIE 10. M I K E R O S S 11. C H R I S S M I T H 12. M I K E TA Y L O R Switch today at cmcmarkets.co.nz
Caroline is the owner of Investment Mike is an Investment Analyst at Chris is the General Manager at Mike is the Founder, CEO and CIO CFDs | FX | Binaries
Stuff, a share market-based Pie Funds and is responsible for CMC Markets. He has more than 15 of investment company Pie Funds.
investment coaching service. She has conducting company and portfolio years’ investing experience, with a He is the portfolio manager for Pie
13 years experience as a sharebroker, analysis. Before joining Pie Funds passion for the financial markets, Growth and Pie Global Funds, and
With derivative products you could lose more than your deposits. You do not own or have any
fixed interest and portfolio manager in August 2015, he was a financial and global equity, commodity and the joint portfolio manager for Pie interest in the underlying assets. Investing in derivative products carries significant risks. Seek
and is a weekly finance opinion communications consultant, a forex markets. Dividend Fund. independent advice and consider our PDS at cmcmarkets.co.nz when deciding whether to invest in
CMC Markets products. CMC Markets NZ Limited (CN 1705324).
columnist for regional newspapers financial journalist and editor for
throughout the North Island. an investor news service.
CC J L CC J R
YOU R I N V E S T I N G
We Kindly Acknowledge Competition Winners
Winter JUNO subscription prize
COAST shawls
OUR PLATINUM SPONSOR
H A N D C R A F T E D N AT U R A L L U X U R Y
Martin Robinson
We work with expert craftsmen to produce our 100% pure New Zealand wool collection.
Rachel Trusler
Add texture, warmth and character to your home for years to come, surround yourself
Bruce Webb in natural luxury, or give the perfect New Zealand made gift.
Bruna Rodrigues
Ann Tweedie
OUR GOLD SPONSORS Sabrina Aylward
Matthew Barnes BENDIGO WOOL BLANKET
Karyn Tattersfield
Like the best sort of companion, the Bendigo Blanket
Saul Ireland Zauled is warm, rich and generous and every bit as
cosy as it looks.‘Rug up’ with 100% premium quality
ELEVATED INVESTMENT
Spring JUNO subscription prize New Zealand wool, woven in New Zealand.
OPPORTUNITY COAST package
OUR SPONSORS & SUPPORTERS
Serena Derek
Secure your own luxurious
apartment in what is soon to Reader Survey
be Auckland’s most sought
Stamford Plaza weekend package:
after address. In the heart of At the heart of Akarua lies MACKENZIE WOOL THROW
Auckland’s cuisine, culture and
commerce district, The Pacifica
Kevin Congdon the Mountain Daisy. Genuine luxury: hand-woven in New Zealand from
Transition.
offers a selection of freeholdHow to Prepare Your family and 100% New Zealand wool from heavily pampered
apartmentsBusiness
over 54 levels
for the Greatest Wealth Transfer in A constant reminder of the beauty and New Zealand sheep. The Mackenzie throw is
generously proportioned, sumptuous and warm.
delivering an absolute 5-star
History by David Werdiger
lifestyle. Demand is already high,
delicacy that can exist in the rugged Only biodegradable dyes have been used
pre-book now to secure a prime Kyle Edmonds
Central Otago landscape. throughout production.
position in Auckland’s iconic new
residential tower. To celebrate the uniqueness of our
place we have created this limited
edition giftbox illustrating just a few ST BATHANS WOOL THROW
And our we simplify investing junoinvesting.co.nz
V I S I T T H E D I S P L AY SU I T E AT L E V E L
of the special characteristics that
Ethical Investing
The St Bathan’s throw is made from 100%
The hottest share
market trend
9, 1 52 Q UAY ST R E E T, AU C K L A N D
AG
TH EE SS H
Low Interest Rates
Will they continue
New Zealand brushed wool and is the epitome
AA
to fall?
NRDE SM
Wonderful Contributors contribute to our ever changing terroir.
Boot Camp
TAG
ARK
O P E N DA I LY 2- 4 P M
Get your money
ESET
working harder
of everyday luxury. Woven on handlooms in
New Zealand, these high quality blankets are
Pantone Black Pantone 465 mid-weight but still extremely warm.
This is our interpretation and 0/0/0/100 16/32/82/5 Great for a cold night on the sofa or while
Mark Devcich Chris Smith Sarah Fitzpatrick
Rod Drury Mike Taylor
080 0 20 20 40
Ute Junker Bulls, ER
2017 - IS
celebration of our land and vineyards. 35/31/32 205/163/73
dining alfresco. Beautifully boxed, a St Bathans
SU
M
SUM
E 15
Bears, brushed wool throw makes the perfect gift.
- TH
-
T H E PAC I F I CA .C O. N Z
ET
SH
K
E
R
ARE MA
Sarah Ell Brenda Ward Jacqueline Taylor & Booms The psychology
#231F20 #CDA349
Just in time for Christmas, this is
of investing – p35
The Share Market Explained Regaining trust in the
Amy Hamilton Paul Gregory Tom Mulholland investment system – p40
W
S UI N
MTE
NZ$9.95 INC. GST
MR
Analysing the share
E R2017
now available at Glengarry, selected
Contemporary ocean-going sailing yachts must be comfortable, even opulent, yet withstand the harshest
2017- -I SI S S
Chadwick
9 772422 894000
market sectors – p44
Rickey Ward Bernard Hickey
UUE ETH
F IIFRTE
conditions at sea. We aim, in our own small way, to emulate the exacting standards of modern boat builders
TEEEN
Superyacht Style Easter Island Mysteries Tastes of Hawke’s Bay
N
Victoria Harris Mark Russell Chris Tennent-Brown
Martin Hawes Naomi Ballantyne Paul Macpherson
retail and grocery stores. in our choice of materials and use of good design. Our products are all hand-crafted in New Zealand.
Worldwide shipping available
Andrew Kenningham Dean Blair Daniel Sims View our wool collection online & in-store at 77 Ponsonby Road, Auckland
Jake Millar Peter Turner Mike Ross 100% PURE
NZ WOOL
Jeremy O’Hanlon Nigel Grant Greg Boland
w w w. a k a r u a .c o m
Mackenzie wool throw, available in four colourways T +64 9 354 4552 coastnewzealand.com info@coast.co.nz
C B R E ( AG E N CY ) LT D L I C E N S E D R E A L E STAT E AG E N T ( R E A A 20 08)
14 JuNO / SUMMER 2017
NESS
A Growing
Fish in a
Big Pond
80
Easter Island
is a small-town fishmonger in New Zealand, but the company has With an ASB Wealth
a global reputation for delivering the finest fish in the shortest time, to
urants around the world.
Your Lifestyle
Manager, you’ll have P E R F OR M A NC E
more time for the T H AT C OUN T S
MICHELIN-STARRED restaurants around Chef Nyesha Arrington says: “I have a clear vision of
world today, chefs will be opening how I want something, what’s the most respectful way
aging to reveal fish from New Zealand to care for a product, a piece of fish.
ered from Rodney-based Lee Fish.
16 I JUNO Exchange
simple things.
“With Lee Fish products, I know exactly what I’m
es and pink gills, these fish look and taste going to get – impeccable fish every single time. It 18 I The JUNO Wealth and Wellbeing Men’s Event
rom those freshly caught and delivered on inspires me to create. My responsibility is to celebrate
ening to Auckland or Christchurch diners. that life.”
20 I What We Like
s of innovative preservation techniques
naround times, Lee Fish ensures that a
Lee Fish has a head office in Leigh, north of Auckland,
and offices in Auckland, Switzerland, California,
77 I Superyacht Style
Growing bigger by the year, with more toys and more bling, superyachts are the 77
ngeles can be preparing a fish caught in
in under 24 hours.
and Singapore. It’s a great example of how a global
platform is important to the international success of a
holiday of choice for the world’s wealthiest people, says Sarah Fitzpatrick.
Ask us how to get started. We're a boutique, direct-to-investor
small business.
80 I Stone-faced Superyachts fund manager that focuses on
chief executive Greg Bishop: “The fish The mysterious Easter Island has some big surprises in store, Ute Junker discovers.
very high quality, taking as little from The demands of running this complex global business performance and client service.
we can. Our values are sustainability, from New Zealand meant Lee Fish chose to use Xero’s 84 I A Sense of Place
ty, family. That comes through in how we cloud technology and real-time data, which ensures Hawke’s Bay is making a name for itself in terms of local produce, and the new chef
ple, catch, handle, and sell our products. that every fish can be tracked back to who caught it, at Craggy Range’s Terroir restaurant is making good use of all the region offers.
which boat it was caught on, where it was packaged, Jacqueline Taylor investigates.
helin-starred restaurants use our fish. and how it travelled.
pecies] that we catch, ours are the best in 86 I Essentials: Bankable Checks
“We’re racing the clock, to get that fish across the Check out this season’s hottest patterns as a style investment.
world and on a plate as quickly as we can. We need
es itself on its sustainable fishing accounting software that can keep up with that,” says 88 I Wellbeing: An App that Saves Lives
century-old traditions, using long lines Bishop. Dr Tom Mulholland explains how your smartphone could help you live longer.
, a process which kills the fish instantly,
eshness and taste. “We’re all just completely and deeply passionate about 90 I Book Reviews
James, 58 - Retired engineer
what we do and that’s why we like to use Xero to run Sarah Ell reviews System 1 by John Kearon, Orlando Wood and Tom Ewing, and
bout guardianship and how we care our business.” How the Stock Market Works: A Beginner’s Guide to Investment, by Michael Becket. and world’s best homework assistant. asb.co.nz/wealth
ry and our resources. This is the most
al way of taking fish.” – Brenda Ward 92 I Subscribe
84
Subscribe to JUNO for just $35 for four issues and go into the draw to win a COAST To download our Product Disclosure Statements visit www.piefunds.co.nz
estaurant Leona, one of the LA Times’ www.leefish.com FURNITURE
summer package of aBEDDING LIGHTING
picnic bag and towel, worth $388.HOMEWARE Past performance is not a guarantee of future returns. No person, including the Directors of Pie Funds
MIKE TAYLOR
aurants of 2017, is supplied by Lee Fish. www.xero.com Management Limited, guarantees the repayment of units in the funds or any return of units in the funds.
ASB Wealth Managers’ disclosure statements are available on Returns can be negative as well as positive and returns over different periods may vary. FOUNDER, CEO AND CIO
274 Richmond Road Grey Lynn Auckland Open 7 days request and free of charge from your ASB Wealth Manager. ASB Bank Limited 56520 17902 1017
www.threaddesign.co.nz
WINTER 2017 / JuNO 65
Terroir, Craggy Range
6036 17954 1017 Juno advert 225x297.indd 1 2/11/17 8:58 AM
Past Issues
YO UR L IFE S TYL E I N TER ES T YO UR I N V E S T I N G PE R S O N A L F I N A N C E
Road to
JUNO
Exchange Paul Macpherson
riches Thunder Clouds
on the Horizon
The theme of the JUNO
Designed
Exchange Spring event was
A Global
Keeping Your Investments
Safe. It covered topics
as varied as the Auckland for Investors You can’t put the top down on your shares or admire the paintwork on
Hackers are everywhere, waiting to pounce, so keep yourself, your
your bonds. Victoria Wells finds out why enthusiasts and investors are
Collective:
Unitary Plan, ethical putting the pedal to the metal when it comes to classic cars.
business, and your clients safe online, writes Paul Macpherson,
investing, and Airbnb. These cars get rarer Xero’s Head of Security.
About 60 people attended the Spring issue ‘Safe Investing’
event on 5 September, held at the new Kitchens By Design and rarer. You can’t just
showroom in Takapuna, Auckland. The event was filmed for
When classic cars topped the Knight Frank “It’s gone through the roof. We’ve got cars that I paid reproduce these items.
Facebook and the JUNO website.
+ Luxury Investment Index for the third year $30,000 for, which are now worth $150,000. The
Whereas an investment
Gourmet Yoghurt Ventures Offshore Steps to take
Speakers tackled the theme of safety in each of their areas running, it simply reinforced what those in the value of them has skyrocketed; the number of people else (in particular for personal purposes, such as
of expertise. industry already knew: investing in cars is red-hot, and collecting them has skyrocketed,” Andrews says. such as precious metals At Xero, we’re aware of the growing amount of Businesses need to take practical steps now to social media sites).
likely to stay that way. The index tracks the performance email and invoice fraud, and account compromises minimise the risks of being hacked. In the same way Here are some simple, easy-to-implement steps
John Berry, chief executive of Pathfinder Asset
of luxury investments globally. Using data collected is just a commodity. that affect small businesses and the accounting and that a hospital is charged with protecting patient to share with your team to better protect your Continuous monitoring
Management, described five ways to protect your portfolio Safety features bookkeeping industry. security, businesses need to keep their data, and information and that of your clients online.
from Historic Automobile Group International (HAGI), At Xero, we consider protecting and defending our
in times of volatility. His solutions ranged from holding cash, Kiwi enterprise and a vision to take New Zealand yoghurt to the world have their customers’ and clients’ data, safe.
classic cars showed annual growth of almost 17 per cent Driving the high values is the perception of classic As more and more businesses manage their • Always use strong, unique passwords for each site online environment against today’s sophisticated
to (for the sophisticated investor) using derivatives.
delivered gourmet yoghurt makers The Collective such fast growth it even for 2015, 162 per cent over the past five years and cars as a safe bet. Richards says his clients have operations and do business online, it’s important for Whether you’re a chief executive, a chief information or service you log in to. Never share passwords. cyber attacks is of critical importance. Our security
WE KINDLY ACKNOWLEDGE nearly 500 per cent over 10 years. HAGI’s data is pulled money out of investments that they haven’t felt firms to keep their data safe. officer, a tech company, or a small-business owner, Having a unique password helps prevent a team works around the clock looking for patterns of
For the first time, the JUNO Exchange took co-founder Angus Allan by surprise. He talks to Sally Jones about the based on more than 100,000 recorded transactions of confident in. cybersecurity is everyone’s responsibility. compromise of one login becoming a compromise unusual activity.
collectors’ vehicles. Statistics from security software vendor Norton
event was live-streamed for readers company�s extraordinary investment in global markets. “They’re maybe baby boomers who have the money and show that cyber crime costs more than US$126 To avoid becoming a target, you have to understand of many. Password-safe software can help you
If a team member spots something suspicious,
OUR PLATINUM SPONSOR
what to do to avoid an attack. manage your multiple log-ins.
around New Zealand. Full-throttle growth
say: ‘Look, I’ve always wanted this car and I’m just going billion a year globally. More than 680 million people they’ll notify users of the steps to take to protect
PHOTOGRAPHY to do it.’” worldwide have been victims of online crime. • Use two-factor or multi-factor authentication their account. In some cases accounts are disabled as
Tracy Stamatakos
Much of the growth in the value of classic cars and How you could be attacked (2FA/MFA) wherever this is available. This is a precautionary measure and the user asked to scan
CBRE specialist in residential subdivision Peter Turner Simon Hammer is a former motor engineer, specialising A large proportion of these cyber-attacks originate
the booming collectors’ market has come over the last There are a number of ways business may be particularly important for your email account, for malware and change their passwords.
outlined the big opportunities for homeowners offered by in classic cars, who now sources vehicles for clients from email, including phishing, ransomware, and
three years, according to Robbie Richards of Melbourne targeted. which is usually the route hackers use to reset
the Auckland Unitary Plan. The rules now allow many around the world, from his base in France. malware delivery. And these figures are on the rise. At the heart of these concerns is that security is
auction house Mossgreen. Richards, who heads up your passwords for other sites.
OUR GOLD SPONSORS smaller sections to be subdivided for profit, and to release Some have their email accounts hacked. These are everyone’s responsibility. Business advisers need
the Department of Collectors’ Cars, Motorcycles and Because of this, it’s never been more important for
capital. Homeowners can effectively become developers, He says prices today reflect scarcity and demand. then used to send out fake invoices that look just like • Install anti-malware (anti-virus, anti-spyware) to educate themselves on the best ways to keep
Automobilia, says the market is expanding rapidly. all businesses to raise the priority of cybersecurity
working with teams of experts to support them and to “These cars get rarer and rarer. You can’t just reproduce the real thing, but with a fraudulent payment bank software and keep it updated. It is one of the themselves and their clients’ information safe, and
“Given what interest rates and other investment fields and safety, and to ensure everyone in their
reduce the risks. these items. Whereas an investment such as precious account number. start making changes to strengthen their online
are doing, people look upon a classic car and say there’s organisation is aware of best-practice guidelines and easiest and most effective things you can do to
metals is just a commodity and you can produce more.” protect yourself. practices as soon as they can.
There are reasons to be cautious of the sharing economy, good growth in the area and it’s something you can use adheres to them. Bogus invoice emails can also contain links or
OUR SPONSORS & SUPPORTERS Nick Wilson, a director in PwC’s Emerging and Fast-growing and enjoy.” attachments that deliver malicious software to • Keep all of your software up-to-date with
Business team, told attendees. Even Airbnb profits are taxed, What’s hot now? Be aware your personal computer, such as ransomware or
and under certain circumstances may be subject to GST.
Hamilton businessman and owner of the Classics security patches. For more information, visit Xero’s Security
Museum, Tom Andrews, has been collecting cars for A ‘classic car’ is generally thought of as an automobile Cybersecurity isn’t a nice-to-have any more, it’s a password-stealers.
People who let out holiday homes also need to know the rules • Communicate often with your team about the page, get updates on the latest security issues
most of his 65 years. His Waikato museum boasts from the 1940s-60s; but it can also be any car of basic necessity of running a business – whether Phishing emails steal information such as your on Xero’s security noticeboard, and forward
around ‘mixed-use’ assets. importance of password security. In particular,
vehicles from the US, UK and Europe, spanning the 20th historical importance. Hammer says escalating interest you’re working on a desktop computer or using usernames and passwords, credit-card details, and
The last JUNO Exchange for 2017 will be held on discuss the fact that it’s not acceptable to use any suspicious Xero-branded emails to
century and dating back to 1908. Although his collection in cars from the 1970s onwards provides a strong case cloud technology. bank account numbers.
Thursday 14 December. is held in trust and not intended for sale, he’s aware of for broadening the definition.
passwords for business that they use anywhere phishing@xero.com.
the growing market for classic cars.
16 JuNO / SUMMER 2017 SUMMER
SUMMER 2016
2017 // JuNO
JuNO 17
17 22 JuNO / WINTER 2016 WINTER 2016 / JuNO 23 72 JuNO / SPRING 2016 SPRING 2016 / JuNO 73 70 JuNO / SUMMER 2017 SUMMER 2017 / JuNO 71
YOUR I N V E S T I NG PE R SONA L F INA NCE YOUR INVESTING P ER S ON AL F I N AN C E YO UR IN V E S TIN G P ER S ON AL F I N AN C E V E L A R V E LOC ITY
What
A drive from Auckland CBD to Piha, on Auckland’s west coast, is
Regional Sales Turnover (last 12 months)
The Prime Minister
the perfect way to put the much-anticipated new Range Rover
GEOFF ROSS Velar through its paces.
THE STYLING: An evolution of the traditional Range Rover
design for today’s driver, the Velar continues the marque’s
AUCKLAND
3.8%
Like
design cues but tapers to a sportier rear, with clever progressive
we
N ew Zea l a n d En t r epr en eur indicators pointing in the direction of travel. You can spot the
Building
With an illustrious foreign-exchange career, and through the course of his amassing pricier R-Dynamic by its fluted panels around the front indicators.
his personal wealth, John Key has learned some valuable investment lessons along THE DRIVE: The Velar’s three-litre turbo diesel and supercharged
petrol models both offer plenty of power for overtaking and
the way. The Prime Minister provides some practical tips for Kiwi investors. accelerating into motorway traffic. But it’s when this four-
wheel-drive hunkers down for the winding road to the beach
that you see the agility. It’s stable and well-mannered, the ride
HAMILTON comfortable and the cabin wide, luxurious, and, in the model I
5.7%
History tells us that most people don’t diversify a natural ambition to have what I perceived to be more drove, lined with leather.
their investments enough, says the Prime than enough money.”
THE SPECS: The diesel offers 221 kW, and can climb to
Enterprise
Minister John Key. “It’s the old story: don’t put all
At school he worked hard and his early interest in money 100km/h in 6.5 seconds. The petrol version is 280 kW, and
your eggs in one basket. Most [people’s] investments are in
led to him sharing an economics prize. is quicker to accelerate, at 5.7 seconds. Not a rocket, but not
housing, and that can be both reasonably profitable and a shabby for such a heavy vehicle. In the past, the Rangie’s fuel
realistic option, because it ticks a number of boxes.” consumption was a bit of a joke, but drivers just cracked another
In school holidays he worked for an accountant and
then graduated with a Bachelor of Commerce. He bottle of champagne and took it on the chin. These models come
However, diversifying your investments is a good
tried accountancy before walking into Canterbury in at 6.4 litres per 100 km (diesel) and 9.4 litres (petrol), so you
TAURANGA strategy, whether it’s through KiwiSaver or other financial
6.0% International and asking for a job. won’t need an overdraft for the fuel.
investments, he says. “The evidence shows diversified
THE BOTTOM LINE: You’ll pay from $152,900 for the HSE;
portfolios are less risky and probably, over the longer
“I set about reaching my goals by ensuring that I got the from $141,900 for the SE; and $134,900 for the S. Add $4,950
term, generate better returns.”
education I thought I needed, to have a job that would pay for the R-Dynamic version of the HSE or SE, with all the bells
me well.” and whistles. There’s no price difference between the diesel and
Know when to exit an investment petrol models.
Then he saw what foreign exchange traders do and knew
Key is a multimillionaire, and he certainly understands – Brenda Ward
Where the Housing
that would be his next career move. He went to work as
the investing landscape. But he has taken a hit on a trader for Elders Merchant Finance. “I was prepared to
PALMERSTON NORTH
5.9%
investments in the past, and he understands the reasons take a few risks with my career and go into areas where I
for that. thought I would be well paid.”
Geoff Ross understands that
Market is Still Hot
“Generally, they’ve been in areas where I haven’t fully
boldness, energy and ingenuity are all Key’s reputation as a foreign-exchange dealer grew SOUTHERN STYLE P R E T T Y I N P I NK
Win
understood the risks, haven’t been able to quantify the quickly. He moved to Auckland from Christchurch and
required when investing in a business. risks, or they’ve been rash decisions,” he says. then London. Even when a fire isn’t glowing in the massive schist fireplace that Rosé is tipped to be the coolest drink of the summer, and now
dominates the vaulted room, the lobby of the St Moritz is an impressive there’s a wine tote to match.
He has experienced unbridled His advice to Kiwis is not to take risks where you can’t entry to this luxury hotel. I step in and take a breath of surprise at the
success with 42 Below and has gone
afford to lose your investment. Pay off the mortgage, have a budget grandeur of this space, cosy despite its height.
The new Minx Leather Wine Tote pairs fashion and practicality,
4.0%
WELLINGTON so your wine arrives cold and protected in a stylish holder. A Minx Rose Gold Wine
“The hardest financial decision I’ve had to make is selling “Having got into a position where our income was As I walk through and up to my room, I find more celebrations of the
Auckland is lagging behind the rest of the country in terms of the on to invest in Trilogy International an investment when it was losing money. It’s always easier reasonably high, my wife, Bronagh, and I were relatively Central Otago landscape that surrounds the hotel – from the stunning
The leather tote, with a recommended retail price of $175, is Tote containing two bottles
lined with neoprene, and has elastic holders to keep bottles of Clark Estate Rosé
percentage of houses that changed hands over the past year, says and Moa Group. You could be to take profits and much harder to crystallise losses. conservative and saved. We paid off our mortgage as mountains, still with patches of snow on my visit, to the expanse of Lake
securely in place.
quickly as we could,” he says. Wakatipu, and the trees that flank the tourist Mecca of Queenstown.
Jeremy O’Hanlon, of Homes.co.nz. forgiven for thinking it is all fun times, “You have to realise that with all the best intentions, It also contains a zippered bag for your party essentials, make-up
And that’s his advice to Kiwis. “Pay off your mortgage as Part of the Sofitel’s exclusive M Gallery range of properties, the rooms at
and wallet, which can easily be removed to fit in a towel, rug, or
but Ross is the first to admit that sometimes you just get things wrong. If you don’t
quickly as you can. Buying a property is an important
the St Moritz have been transformed in a makeover by interior designer
picnic food.
understand why an asset is performing so badly, then Stewart Harris. Layers of natural colours, dark timber, textures and fine
there are also plenty of tough days at you’re better off quitting it and reassessing from a position step, as it’s usually most people’s largest asset.”
patterns are lifted by sophisticated touches of shimmering metallics. We’re picking it’ll make a great pairing with Clark Estate’s award-
4.8%
Sales volumes slowed substantially across New Zealand (5.7 per cent) and Tauranga (6 per cent) have CHRISTCHURCH the office, brewery and beauty lab. of calmness and neutrality.” Splashes of teal pick up the lake’s intensity, and a mustard chair reminds winning Dayvinleigh Rosé 2017.
in the last quarter, in the build-up to the October maintained higher-than-average turnover. However, Key now owns an impressive home in Parnell and a beach
guests of the region’s history of gold-prospecting – and wealth, still
election. This was expected – we saw the same pattern Auckland has maintained its position with the lowest He speaks to Sally Jones about the Good research is the key to successful investing, he says. house in Omaha.
evident today.
For more details about the tote, go to www.minx.co.nz, and for
“If you’re not comfortable that you fully understand the Clark Estates wines go to www.clarkestate.com.
over the last election period, as homeowners and turnover of the main centres, at just 3.8 per cent.
investors waited to see if there would be significant
highs and lows of growing a business information, you should seek professional advice. Even
He says having a budget and sticking to it are tips he and My dormer window overlooks the lake, busy with charters, parasailing,
Bronagh followed in their early married lives. and the iconic Earnslaw steamship, tooting as it passes. The room’s ideal
changes to housing policy. The highs and lows of turnover percentages aren’t and investing in enterprise. if it costs you money, it might save you money in the long as a base to explore the nearby town. It has a simple kitchen for quick
Photo credit: Office of the Prime Minister
massively different, but they offer a subtle insight into term.” “Make your budget realistic, so there’s some money for meals, but today I prefer to head to the in-house Lombardi restaurant. WIN: To help you arrive in style at that summer
If the last election cycle is anything to go by, as we how active each market is. treats and nice things, otherwise you’ll never stick with
DUNEDIN Here, I can experience the tastes of the south too, from the wild Fiordland barbecue or picnic, we’re giving away a Minx
5.2%
move into the new year, I expect these volumes will pick
Set goals and prioritise the plan. If you take a small amount out to save every
venison loin, tender in its lavender and honey glaze, with beetroot and
Rose Gold Wine Tote containing two bottles
up again. For more details about transactions, and to see week, put it somewhere you won’t touch it.
Key’s father died when he was a child, and he was raised pears, to the ‘Central Otago Gold Rush’, a concoction of chocolate
for free the prices that homes have sold for
in a Christchurch state house by a solo mother. As a boy, For those of us who are not millionaires, the Prime
brownie, hokey-pokey ice cream, and a hollow chocolate sphere. of Clark Estate Dayvinleigh Rosé 2017, with
Turnover figures are an indication of the level of market nationwide, go to Homes.co.nz. In most areas, sales
activity in each area. Areas such as Hamilton are updated weekly. he made up his mind to become a millionaire. Minister says KiwiSaver is the answer to a better I see diners with ‘flights’ of local wines in tiered stands, but I’m satisfied a total value of $220. Enter at
retirement. “Because of the nature of KiwiSaver, with my single glass of fine Gibbston River pinot noir. www.junoinvesting.co.nz/competitions/
“I grew up with limited financial means, which is why I where your employer and the government both make
always recognised the importance of financial security, a contribution, it has the highest rate of return of any
– Brenda Ward www.sofitel.com/stmoritz/queenstown before 31 January 2018.
and I put a high degree of importance on it. “That gave me investment most people will make.”
Data supplied by homes.co.nz
66 JuNO / SUMMER 2017 16 JuNO / SPRING 2015 SPRING 2015 / JuNO 17 28 JuNO / SPRING 2016 SUMMER 2016 / JuNO 29 20 JuNO / SUMMER 2017 SUMMER 2017 / JuNO 21
YOUR INV E ST ING PE R SONA L F INA NCE YO UR L IFE S T YL E TR AVEL YO UR I N V E S T I N G P ER S ON AL F I N AN C E YO UR IN V E S TIN G PE R S O N A L F I N A N C E
WHAT WAS HOT With every generation, a new investment
becomes popular. Brenda Ward looks at
It’s the doing,
not the knowing
that makes
,
AND THEN NOT
I’m in two minds about whether we should
success.
give KiwiSaver members more choices.
eight of history’s most famous bubbles. Good habits that
The Commission for Financial Capability (CFFC)
recently came up with eight ideas on how the
KiwiSaver retirement savings scheme could be altered
WILD COASTS & willsupportfinancial
capability
8
(see next page). Most of these proposals have merit, but
I do have a couple of reservations: • regular saving • regularlyreview
yourKiwiSaver
• KiwiSaver has been tinkered with too much • usingcashforspending account
already – it has changed in about 20 ways since
it was launched in 2007. Many people are saying 1790s 1930s 1980s 2000s • planforChristmasand • regularlyreview
Just as New Zealanders have got enough is enough. othercelebrations yourmortgage
used to KiwiSaver being part of our • waitforretailspecials
financial landscape, changes may
• Several of the ideas introduce new options. When
British Gold The Share Carbon • regularlyreview
Tips For
people are given lots of choice, they tend to put off
utilityprovider
be on the horizon. Mary Holm has making a decision, and end up doing nothing.
Canal Mania Hoarders Market Credits
her say on the plans. Still, two of the suggested changes are particularly
appealing – partly because they nudge people into
After the American War After the 1929 stock market The 1980s were the years The Emissions Trading
saving more.
You can sleep in a castle, watch a sea lion basking of Independence ended in crash, many investors started of investing in ‘blue-chip’ Scheme was set up in 2008
Financial
1783, investors felt rich and, redeeming dollar notes for companies like Brierley, so New Zealand could meet
on a rock, and go surfing in front of a European-style from 1790 until 1793, 20 gold. There were fears that Chase and Equiticorp, its commitments under
Turbocharge your savings
seaside strip, all in one day. Brenda Ward discovers new canal-building schemes the US might run out of gold, all giving investors great the Kyoto Protocol. Forest
The first idea I like is an option to automatically were authorised. Some of so the Fed raised rates. But returns. Kiwis joined share owners claimed carbon credits
increase your contribution rate by 0.5 per cent or 1 per the variety on offer in Dunedin. the canals were profitable, then the US entered the Great clubs and borrowed to invest. for carbon stored by their
cent every year.
Fitness
but many never returned a Depression and people hoarded Then, on 19 October 1987, trees. Prices reached $18
penny. Others, such as the gold, driving prices up. Finally, the share market plunged. to $20 a tonne, then cheap
For example, your contributions might rise from visits, which leads to less money being spent. It is
3 per cent of your pay this year to 3.5 per cent next
Grand Western Canal, were private ownership of gold Fisher & Paykel is the only international carbon credits hit
well known that a high percentage of supermarket
Problems with money
1630s 1840s 1970s 1990s
They say there’s a ghost in Larnach Castle. I’d say they’re right. As a never finished. was outlawed. New Zealand 1987 top-30 prices and many forests were
year, 4 per cent the year after, and so on. You could put
in place a maximum, such as 8 per cent or 12 per cent. child, I felt chilled, panicky, and terrified in one bedroom in the castle company still listed. turned into dairy farms. purchases are unplanned and that the more often management are seldom
you go, the more you will spend. Ultimately, the
and dashed out and down the stairs, for no reason.
habits of poor meal planning lead to more expense. due to lack of knowledge or
I suspect this stepped increase in contributions would
Back then, I thought it was the spirit of prominent politician William skill and almost always due
only have wide appeal if you could pull out; if, for
Larnach’s long-dead daughter who had left me shaking and short of Dutch Tulip British NZ Property The Dot-com Many other good habits can help people with their
example, you lost your job and were having trouble
finances: regular saving; using cash for spending; to people having the wrong
finding another, or your new job paid less. Of course
you can already pull out of KiwiSaver by taking a
breath. But when I walked back into the same room on this visit, I
found they call it ‘Constance’s Boudoir’. Craze Railway Mania Boom Bubble planning for Christmas; waiting for specials;
attitude and bad habits.
regularly reviewing your KiwiSaver account, your
contributions holiday. However, you might want to This perfectly restored room was the bedchamber of the third wife of Conventional wisdom was that if you stuck of grabbing a coffee on the way to work that
mortgage and your utilities; and so on.
keep contributing, but switch back to a lower rate. Larnach, the only spouse to outlive her MP husband, who shot himself The Dutch Tulip Craze is By the 1840s, the industrial The buzz word in New Investors speculating on to your New Year’s resolution for 21 days, it we may no longer view it as a luxury, or
in his parliament rooms. believed to be the first revolution created wealth, Zealand in the 1970s tech start-ups, from 1997 to These are habits we can all develop, and they would become ingrained. However, University even expenditure. We can come to see it as
The beauty of this idea is that people are more willing
to sign up to a ‘Save More Tomorrow’ type plan than
to saving more now, according to research conducted
My guide doesn’t admit it, but apparently she’s felt an icy hand push
her from behind in there. However, the guide does tell me about the
recorded bubble. The tulip
was new to Holland, and at
the craze’s height, single
and new train tracks
became a speculative
frenzy. As railway shares
was property. High
inflation, an immigration
boom, and a shortage
2001, caused the dot-com
bubble. Many internet-based
companies, ‘dot-coms’, were
illustrate the difference between literacy and
capability. Just remember: it’s the doing, not the DEFINITIONS College London research into habit formation
has shown that it takes around three times
a necessity because it has become a part of
our daily routine. But as Benjamin Franklin
in the US. knowing, that makes success. that to make physical changes stick. cautioned: “Beware of little expenses, a small
afternoon an elderly woman from the Philippines fell to the ground by bulbs were selling for more went up, more money was of builders and building launched and became share- F I N A N C I A L L I T E R AC Y: possessing sufficient
the door and started speaking in a man’s voice. than 10 times the average materials pushed up market darlings. The bubble know-how, understanding and resources to leak will sink a big ship.”
poured in, until the industry
So what about exercising our financial habits?
Save More Tomorrow Today, the room is only quiet, elegant and welcoming.
wage. When the prices collapsed. A third of the house prices in value by burst in 2000-02 and many potentially manage money.
collapsed in 1637, many 53 per cent. Then the oil of those start-ups failed. These behaviours influence the perception So in a bid to help you build some financial
Professor Richard H. Thaler is one of the researchers lines were never built, some
Martin Hawes is an Authorised Financial Adviser. Martin’s F I N A N C I A L C A PA B I L I T Y: having we have of money and how we spend it. We muscle and keep your ship afloat, Juno has
and architects behind the Save More Tomorrow investors were ruined and companies turned out to be crisis hit, immigration Amazon.com and eBay
disclosure statement is available on request and free the mindset and behaviours required to can spend $1,600 over the course of a year brought you eight tips to kick-start your
programme. He explains: “Given the option of going the Dutch economy was scams, and many families slowed, and house were two of few that
of charge, or can be found at www.martinhawes.com. successfully manage money. on a daily caffeine fix. But such is the habit journey to financial fitness, all year round.
on a diet three months from now, many people will badly affected. lost everything. prices fell 40 per cent. recovered.
This article is of a general nature and is not personalised
agree. But tonight at dinner, that dessert looks pretty financial advice.
good.”
88 JuNO / AUTUMN 2018 89 JuNO / AUTUMN 2018
SPRING 2016 / JuNO 57 24 JuNO / SUMMER 2017 SUMMER 2017 / JuNO 25 28 JuNO / AUTUMN 2016 AUTUMN 2016 / JuNO 29
M A R KE T INSIGHTS ES S EN TI AL S YO UR L IFE S TYL E INTEREST
Storm in a WN 1.
China Teacup 2.
Some investors think China’s economy will continue to boom;
others that it’s about to collapse. Andrew Kenningham says
WHAT
4.
Andrew Kenningham neither is likely. China’s economy will probably continue
Capital Economics expanding, but at a gradually slowing pace, he says.
LIKE Syrah,
3.
China has again become a major economic power in Two years later, the situation is very different. BANKABLE
CHECKS
one of history’s most spectacular reversals. Confidence has been restored. The central bank has
been accumulating reserves and the value of the
Its share of world gross domestic product (GDP) shot renminbi has actually risen against the US dollar by
up from only 2 per cent in 1990 to 6.2 per cent in 2007. around 5 per cent this year. The People’s Bank has set
Dark
The global financial crisis largely passed China by, and out a clearer, more flexible exchange-rate policy.
it went on to reach 15 per cent of world GDP this year.
Its share of world exports has risen even more rapidly,
from only 1 per cent in 1990 to 14 per cent this year.
This exponential growth has been cheered on by
Rising corporate debt
Not all the risks have evaporated, of course. China’s
banks, and its growing shadow-banking system,
6.
7.
The Horse
western commentators, many seeing China as the have been giving ever-larger amounts of credit to
world’s next economic superpower. But others warn
that a big economic crisis is just around the corner. In
companies and, increasingly, to households. Check out this season’s hottest
my opinion, both of these views are exaggerated. Excessive lending has been the root cause of numerous patterns as a style investment. 5.
financial crashes throughout history – including of
Fears of devaluation fade course the sub-prime debacle in the US. So these risks
should not be dismissed lightly.
9.
For many New Zealanders, Pinot Noir has long been a favourite when
The good news is that the risk of a crash, or a hard
landing, is much lower than many fear. Indeed, all countries that have seen as large a rise in choosing red wine, but now it has a serious competitor. Vince Labat from
bank lending as China have subsequently suffered
Only two years ago, a currency ‘devaluation’ in China a crisis. Even the Governor of the People’s Bank of Elephant Hill Wines, Hawke’s Bay predicts a bright future for Syrah.
sent ripples around global financial markets and China, Zhou Xiaochuan, warned in October that the
evoked memories of the great emerging-market crises economy may be heading for a ‘Minksy Moment’, or
in Thailand in 1997, Russia in 1998, and Argentina credit crunch. 10.
in 2002.
Forecasting financial crises is notoriously difficult,
But China’s devaluation was barely worthy of the but there are reasons to think that the worst can be
8.
name. The yuan, or renminbi as it is also known, lost avoided in China.
a mere 2 per cent of its value. The real problem was
that policymakers in Beijing let people believe that For one thing, most of the companies and banks
they might want a much bigger adjustment. involved are state-owned and, as public debt is not
particularly high, the state could afford to bail them
It didn’t help that China was suffering from out if it needed to. Also, the debts have not been 1. Messenger turntable 4. Classic slip-on in Black-white 7. Oak blouse in Navy Gingham 10. Ben Sherman Jacquard polo in
significant capital flight as Chinese companies securitised or sold to foreign investors – in contrast crosleyradio.com Checkered shop.twentysevennames.co.nz Gingham Herringbone
northbeach.co.nz smithandcaugheys.co.nz
worried that the currency may weaken. to the US sub-prime crisis – so there is less risk of 2. Waterproof picnic blanket with 8. Socoa Damier sunglasses
straps in Woodstock Check 5. Papua New Guinea 70% cacao louisvuitton.com
thebritishblanketcompany.com bahenchocolate.com
9. Reversible tote in Vintage Check
3. Armani squares belt 6. Fornassetti Scacco scented candle dfs.com
smithandcaugheys.co.nz nz.amara.com
SUMMER 2017 / JuNO 111 SUMMER 2017 / JuNO 87 54 JuNO / WINTER 2015 WINTER 2015 / JuNO 55
YOUR INV E ST ING PE R SONA L F INA NCE P ER S ON AL F I N AN C E YOU R INV ESTING PERSONA L F INA NC E S TO C K R E V I E W
The 1990s STOCK REVIEW
Ethical Unethical Property Show Me the Honey NZ$12.09
NZ$TBC
CVT
SRF PRICE
As As
at 16
at November
13 May 2016
2015
Nikki Connors, 50S CVT
SRF MARKET CAP
The medicinal properties of manuka honey have turned this
NZ$482.5M
NZ$TBC
Chris Bainbridge
Portfolio Manager, Pie Funds, New Zealand
The first property I bought was with my partner Over 12-and-a-half years, the market went up, the humble bush product into liquid gold. New Zealand’s leading As As
at 16
at November
13 May 2016
2015
when I was 22. We purchased a rundown villa in market went down; interest rates went up, and Sally Jones
Ponsonby for what we thought was a huge amount. interest rates went down – but I still made money.
honey supplier has big plans and a bright future.
Chris Bainbridge explains how Comvita has reinvented
Money on
It was 1983 and Ponsonby was on the fringes, only
Clean Energy Sustainable Products Coal Coal Seam Gas
for students and new immigrants. Take a long-term view its business model and reaped the benefits.
We bought the crappiest, scummiest place. I believe the key to property investment is to take
the Farm
I remember being in bed when I heard what sounded a long-term view, then you’re not at the mercy of a
like a large dog in the hallway – it was a rat! We lived changing market. People say to me now, this can’t
in one of the rooms while a modest amount was be the right time to buy. It’s always the right time to
What has a slightly bitter taste, smells There’s money in honey
like damp clothes, and costs more than
spent on doing the house up. buy, because the top of the market in the ’80s and the A decade ago, New Zealand’s total annual
champagne? Manuka honey, of course.
top of the market in the ’90s are still nowhere near honey exports were worth just NZ$36 million.
In those years, we did experience the property boom. the top of the market in the 2000s.
Every three years, we were able to sell and buy The incredible rags-to-riches story of this By last year, the value of honey exports had
amazing food has helped to drive the share jumped to NZ$285 million, up 41 per cent
‘up’. I didn’t think of it as property investment. Back in New Zealand in 2005–6, I started Propellor, The Government has set a goal of doubling primary industry
Healthcare Recycling Logging Exploitation I always believed property investment was for rich, to help people invest in property. The trouble is that price of Comvita Limited (NZX:CVT), New from NZ$202 million in 2014. Much of that
fat, old men. most New Zealanders don’t have money in the bank. exports to NZ$64 billion by 2025, so how can investors get a Zealand’s largest honey supplier, up over 200 growth in honey exports was down to Chinese
Most of us just keep our heads above water, paying piece of the rural action? Sally Jones investigates. per cent in the past year, and has shareholders consumers, who are increasingly interested in
I was earning hundreds of thousands of dollars our mortgages, feeding our kids and getting them buzzing about the future. manuka honey’s medicinal properties.
and driving lovely European convertibles, but through school.
we had a huge mortgage. We were paying 19.5 per Until last year, Comvita’s shareholders
cent interest. The only currency we’ve got to use for anything else Manuka honey comes of age appeared to be missing out, despite the
is the equity we have built up in our homes. I suggest meteoric rise of manuka honey. Comvita had
Then my marriage ended, and I came away with a Farming has always been a star of New Zealand’s economy, yet few Kiwis Comvita was founded in 1974 by 63-year-old
people access a small portion of that equity by using been a marketing company, buying honey off
and make an investment. But it’s difficult to get advice young son and no money. By the time all the bills to it as a guarantee towards the deposit on a modest have been able to invest in it. That’s because there have only been two main Claude Stratford of Paengaroa as a retirement
beekeepers and using its distribution channels
on them. You largely have to do your own analysis, the builders and credit cards were paid (because we ways to invest in the rural sector: owning a farm, or the share market. hobby. Stratford had a vision of caring for
DEFINITIONS
investment property. and brand to resell its products at a profit
Medical Solutions Innovative Technology Oil Weapons and hope you’ve made the right choice. lived on those), there was nothing. the community by producing healthy honey
History shows properties double every seven-and-a- Owning a farm is out of reach financially for most Kiwis. And the New worldwide.
products. Today, Comvita is one of New
Your research will involve studying the investment I went to London and had to start again in a poorly half years. As the property’s value goes up, you can Zealand Stock Exchange (NZX) has offered relatively few rural company
E XC H A N G E -T R A D E D F U N D (E T F ): A Zealand’s most successful and innovative As competition for manuka honey increased,
processes of the funds. You will also need to look at paid job in London at the BBC. I was living in the refinance against its new value, and pay some money listings for the size of our big agricultural industry.
security that tracks an index and trades on companies, with in excess of NZ$200 million in Comvita was forced to pay higher prices for
what the funds own, to ensure they do not breach your back of Chiswick and my son had to have an au pair off your home; or use the equity to buy another
an exchange. An index is a cluster of assets because I worked long hours. That’s when I started Many of these companies have underperformed, and rural services provider sales to more than 18 markets around the world. honey, and beekeepers and landowners were
personal principles. A ‘good’ company for one socially rental property. After ten years, sell one to pay off
sharing the same characteristics. Shareholders to think about what I could do to earn more, to PGG Wrightson is the only long-term player left. the winners.
responsible investor may not be perceived the same the other; that’s your passive income for retirement. However, Comvita’s story is really about the
do not directly own the underlying increase my income.
way by another individual. But there have are changes in the rural sector, says Mark Lister, Head of phenomenon of manuka honey. Manuka honey Comvita realised that it needed more control
investments in the ETF, but receive a share of Unfortunately, property investors are the bad guys
Private Wealth Research for Craigs Investment Partners. is produced almost exclusively in New Zealand,
the profits. Extra work at the moment. But, if the government didn’t have of the supply chain to ensure that it got its fair
Energy Efficiency Education Gambling Human Rights Abuses
More complications us as partners to help supplement the shortage in “The New Zealand economy is not just a dairy story any more; the broader
by bees that pollinate the native manuka bush. share of the profits. The discovery of manuka
M A N AG E D F U N D : An investment fund that After paying the rent there was nothing left, so I took
Investing wisely is difficult enough already, but SRI
pools money from different investors and on some freelance work and saved, and managed
accommodation, it could never house all the low-
income families.
agriculture sector and rural sectors have hugely caught up.” Until the early 1990s, manuka honey was honey’s anti-bacterial
adds another layer of complexity to the task. to get £5,000 towards a deposit on an investment unpopular due to its strong flavour. It was also Taking control of honey supply
managed by a fund manager, who determines
the composition of the fund’s underlying
property. I bought a little flat at the back of Acton, Statistics for 2013 showed there were over 453,000
Livestock, horticulture and innovative agri-businesses are all helping New difficult to extract. Then Waikato University properties made news
Personally, I take a fairly simple approach – I try to Zealand remain a world leader in farming and innovation. There’s a need for researcher Dr Peter Molan discovered that Following two to three years of heavy
exclude companies in some of the industries I consider assets. Each investor owns a portion of the
which was cheap. It was £70,000 and I had a £65,000
mortgage. This was in the early ’90s.
New Zealanders renting. The government could
only supply about 64,000 properties. Who took care
more investment in all areas, which is opening up new opportunities, he says. manuka honey contains an anti-bacterial and investing, Comvita today produces about half worldwide, and suddenly
total fund. of its manuka honey supply.
the worst (for example, tobacco and armaments). As a
direct investor mostly owning individual stocks, I can All I did really was freshen it up, and tidy up the
of the rest? Over the past decade, farm ownership has shifted away from the traditional anti-inflammatory agent. Molan called the
agent ‘unique manuka factor’, and the product
the ugly duckling of New
family-farm model towards multiple owners, syndications, and equity Comvita has also taken steps to limit the
Responsible Banking Aged Care
do this as long as I’m not too ambitious and I don’t try garden, working at night-time. So every evening I
would feed and bathe my son and, after reading him
We’re not talking about greedy corporate landlords,
it’s about mum-and-dad investors. Interest rates managers. This makes buying into a farm more affordable, but Lister says became highly valued for medicinal purposes. amount of manuka honey that’s available for Zealand honey was an
Tobacco Harmful Products to take SRI too far.
Martin Hawes is an Authorised Financial Adviser. Martin’s a story, I left him with the au pair and went off to
my second job. When I sold that flat, I made enough
will go up and down, property prices might plateau, it’s still easier for the wealthy. The discovery of manuka honey’s anti-bacterial its competitors to buy.
export superstar.
After all, other ways of trying to leave the world a disclosure statement is available free of charge at but if you take that long-term view, you will always properties made news worldwide, and suddenly
Photo: Darren Meredith
to get enough another property that was more do well. Now Comvita has a strong influence over
better place do exist – it doesn’t all have to be done www.martinhawes.com. This article is of a general nature the ugly duckling of New Zealand honey was
expensive, and then did it again and again. honey supply and pricing, much as Fonterra
with investments. and is not a substitute for personalised financial advice. transformed into an export superstar.
I’m an entrepreneur. I know I may fail again in Photo: Paul Sutherland does in the dairy market.
Eventually I had enough for a deposit on a lovely the future, but that’s OK, because everything is
house in Belsize Park. That’s when the bug bit me. protected around property.
44 JuNO / SPRING 2016 SPRING 2016 / JuNO 45 SUMMER 2017 / JuNO 29 38 JuNO / AUTUMN 2018 39 JuNO / AUTUMN 2018 74 JuNO / WINTER 2016 WINTER 2016 / JuNO 75
YOUR INV E ST ING PE R SONA L F INA NCE YOUR LIFESTYLE I N TER ES T
I $ WEALTH
> Return on Equity
How is ROE calculated?
ROE can be calculated in many different ways. The most
PATHWAY TO
GROWING
YOUR WEALTH
Boot Camp
1 What’s Your Why?
Do you have goals and dreams? Want to travel? Renovate the
house? Buy a new car? If you do, enter your goals and their cost.
2 Stretch
Stretching means
taking a good
hard look at your
spending and earning. Then you
need to challenge yourself to
north
simple formula is to take a company’s net profit after tax and spend less, earn more, or do both
divide it by shareholders’ equity. To express this number as a
for maximum results. You need to
percentage, multiply by 100.
Return on get out of the back seat on your
Standing the
Growing your wealth is entirely possible. But for most people the steps to achieve financial journey and start driving!
Equity
3
this take some understanding. Net Profit
ROE = x100 Part One: Stretch and Warm Up Where do you want to end up and
how are you going to get there?
In this short ‘how-to’ series, Juno takes you through the fundamental principles Shareholder Equity Be tough on yourself and you’ll
of generating high net worth. If you truly understand these concepts, you can
test of time Give your finances a workout with this simple three-step programme to cut out and keep, find you can stretch further.
STAr
create unlimited wealth. designed by financial adviser Dean Blair of Fox Plan. When it comes to physical fitness,
you probably know what you
In the last issue we looked at return on investment (ROI). should be doing. It’s the same with
Now we look at return on equity (ROE), what it money. You know you should try to
means, and some simple ways to calculate it. Welcome spend less and invest the surplus.
But it’s tough getting motivated all
It’s the perfect antidote to today’s Welcome to financial boot
1
by yourself. Sometimes you need a
‘fast’ consumer culture: furniture camp. There will be pain. push, and I’m here to help give my
with a past that fits easily into our There will be sweat. But you clients the encouragement – and
What is return on equity? will see results! occasionally the tough love – they
Shareholders’ equity in a company refers to the value of a
modern lifestyles. Dan and Emma
Boot camp is for all those need to stay on track.
company’s assets (for example, machinery or cash) minus its Eagle specialise in sourcing and
liabilities (debt or creditors). people who have an idea about
restoring old furniture and artworks.
3
what they s
Put simply, return on equity (ROE) measures how much profit Victoria Wells meets the couple
a company generates by using the money shareholders have
invested in it. whose business Mr. Bigglesworthy is Warm up
Is ROE a fail-safe measure? breathing new life into mid-century Once you’ve stretched yourself and created
more surplus income, you need to know
ROE isn’t perfect. Be wary of a company that has modern design. where to invest it. Don’t be scared of the
used debt to boost its ROE. Although a company’s
ROE might be high, if profits were to fall, this could PORTRAIT share market, and don’t assume you can’t afford property.
2
spell trouble — the company wouldn’t be able to PHOTOGRAPHER You won’t know until you do your research.
Stephen Tilley
repay its debt.
4
OTHER PHOTOGRAPHY
By research, I don’t mean talking to your workmates,
Mr. Bigglesworthy friends, and family members who say “I bought some shares
in 1987 – and never again”. You need to find out what the
market looks like right now and how you can get involved.
If you want a long and healthy life, exercising regularly is
Get started here! more important than what type of exercise you do or what
time of day you do it. Investing is exactly the same.
It’s time for you to be more focused, starting now.
Why does ROE matter? It’s not about investing in a particular share, but about
This is the first of a three-part financial boot camp:
Financial independence is When choosing shares, ROE is a great way to compare the profit efficiency of a company being active in the market. You know the old saying: it’s not
1. Stretch and warm up.
about having enough assets to that of its competitors in the same industry. about timing the market, it’s about time in the market.
Follow this path to the COMING UP IN FUTURE 2. Get moving and increase the intensity.
to be free to live the life ROE is a good indicator of how well a company’s management team is using 3. Build endurance and strength.
you want without having to shareholders’ funds. To a shareholder, the higher the ROE, the higher the profit efficiency
next issue. You will ISSUES OF JUNO: Warm up by doing your research, finding out what’s
learn about the power of meant by ‘asset classes’ and ‘ROIs’ and ‘dividends’. Get
work. Becoming financially of the company. Each one will feature exercises for you and ideas to improve your financial fitness.
Issue 11: The power of comfortable with understanding the relationship between
independent is the process of ROE is a good tool for identifying the best companies within an industry. understanding market understanding market cycles. Pushing beyond your comfort zone is painful. If you’ve been spending too much, it risk and reward. Then it’s time to start thinking about
accumulating assets that pay
cycles. This will help you will be uncomfortable to rein it in. Just like a physical boot camp, this means fewer where to put your money to work.
for your chosen lifestyle. treats and harder work.
decide when to buy and Issue 12: The use of leverage. Investing doesn’t have to mean starting with thousands
sell shares. The results are similar too. The more work you put in, the better your finances will of dollars. Start with $100, or $50. Every little bit you put
look and feel. away helps you build a more comfortable future.
NEXT ISSUE: GET MOVING
54 JuNO / SPRING 2016 SPRING 2016 / JuNO 55
You can also read
