Market & Portfolio Update - June 2023
Global share markets had another strong month in June, rising 3.7% in New Zealand dollar terms. Investors were encouraged by a sharp drop in year-on-year inflation in the US of 4.0% - still above target but substantially lower than the 9.1% recorded in June 2022.
International bond markets were flat over the month as central banks transitioned from hiking their respective policy rates to pausing to evaluate incoming data. This is a signal that interest rates globally may be nearing their peak. The US Federal Reserve maintained their policy rate at 5.25%, the first pause after 10 consecutive hikes over the past 15 months. This should be supportive of bond returns looking forward.
The first half of the year has started off strongly for financial markets, regaining the lost ground they experienced in 2022. Global share markets have led the way, up 19% in New Zealand dollar terms. This highlights the importance of staying invested during volatile times and not focusing on news headlines which tend to focus on negatives.
The magic of the managed fund
Let’s talk about shares for a minute. No matter how you invest, there are really just two ways to make money from owning shares:
1. You receive a slice of the profits (called dividends), or
2. You sell your shares to someone else for more than you paid (that’s capital gain).
That’s it. Anything else is simply a different way of packaging those two outcomes.
What is Life Insurance?
Life insurance is one of those things that many people know they should probably have but they’re not quite sure what it does, how it works, or whether it’s actually relevant to them. This article breaks it down in clear, everyday terms to help you understand the basics before you decide if it’s something worth exploring further.