Market & Portfolio Update - November 2021
News of the new Omicron variant broke late in the month, resulting in modest volatility in global share markets. Markets don’t tend to like uncertainty, and it is still early in terms of understanding the Omicron variant. Much more data is required, but initial suggestions are that it is more transmissible but potentially less severe than the Delta variant. Vaccine makers are also optimistic that existing vaccines will provide some protection, and Omicron specific vaccines can be developed reasonably quickly if required.
For New Zealand based investors, the volatility global share markets experienced was offset by the NZ dollar falling. The NZ dollar depreciated against most major currencies, supporting the returns of unhedged overseas assets (assets that are free to move with exchange rates). The result was a positive 3.2% return for unhedged overseas investments.
Fixed interest portfolios provided the diversification we expect during a period of equity market volatility. Both Global and New Zealand fixed interest portfolios returned almost 1%.
In New Zealand, the Reserve Bank hiked the Official Cash Rate 0.25% as expected – taking the rate to 0.75%. Their updated forecasts now show the OCR reaching 2.5% by mid-2023.
The Summer Reset
Summer has a way of easing the pressure. The days feel longer, the calendar softens, and life slows just enough to remind us that not everything needs to be urgent, solved, or optimised right now. It’s a subtle shift, but a powerful one. And it’s what we like to think of as the summer reset.
Lifetime Book Club: Ikigai by Héctor García & Francesc Miralles
“The happiest people are not the ones who achieve the most. They are the ones who spend their lives doing what they love, with purpose.”
That is the central idea of Ikigai.
This is not a hustle manual or a step-by-step guide to success. It is a gentle, thoughtful exploration of what gives life meaning, and how small, intentional choices can lead to a longer, happier, more fulfilled life.