Market & Portfolio Update - November 2024
The Global equity market had a strong month, up +3.8%, driven by the US. Trump won the US election early in the month, which bolstered investor optimism surrounding potential corporate tax cuts. Furthermore, expectations for de-regulation boosted the US financials and energy sector, while the industrial sector was seen as one of the main beneficiaries of tax cuts and trade policy.
Central banks globally continued to lower rates during November. England and the US central banks both lowered their respective rates by 0.25% in response to falling inflation.
Moving closer to home - the Reserve Bank of New Zealand continued their interest-rate cutting cycle, reducing the Official Cash Rate from 4.75% to 4.25%, marking the second 0.50% cut in a row. The Reserve Bank noted households and businesses have not been spending as much as usual, however, lower interest rates should encourage households and businesses to spend more, supporting economic growth. The NZ share market didn’t move much in reaction to the cut, as it was widely expected by the market. Nonetheless, the NZ share market index returned a healthy +3.4% in November, bringing the year-to-date return to +11.8%.
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.