Dunotter Strategic Wealth

  This was the eye-catching premise of a Hatch advert that circulated New Zealand in June of this year. Hatch were not claiming that they had discovered some incredible investment opportunity.  They were simply illustrating the power of compound returns. The article explains that if you invested $2,040 when your child is born, and it grows at 10% per year, by the age of 65 it will be worth more than $1,000,000. There is a famous quote attributed to Albert Einstein:         " Compound interest is the eighth wonder of the world. He who understands it, earns it;              he who doesn't, pays it ." While it is highly likely that he said no such thing, the power of compounding is truly a wonder to behold. As Doug McCutcheon pointed out in an article in the Globe & Mail:  "If you invest a sum of money at 10% for five years, you will multiply your wealth by 1.6 times.  If you invest your capital at th...

  While moderating the Mary Holm event at the Central Hawkes Bay Readers & Writers book festival this year, the topic of educating children about investing came up.  A lady in the audience said that her family had embarked on a competition to see who would pick the best share portfolio. Each member of the family (parents and the young children) had opened a Sharesies account and invested $20 into it. They had then picked which shares they would like to buy. One of the useful features of these platforms is the ability to purchase "partial shares", so if the price is $10 but you only want to invest five, then you can buy half a share. The idea was to see which portfolio had performed the best by the end of the year. We thought that this was indeed a great way of introducing our children to the world of investing. They have often asked me "so what do you actually do daddy?"  Unlike that of their farming uncle, my work must seem completely intangible. While I am no...

  The stock market often appears to be a complex and risky place in which to invest money. The latter is of course correct: there is risk in almost any action, even inaction carries risk of some sort. Therefore a huge industry has been created over the past century, where experts (fund managers) offer to take care of your money and invest it wisely. According to a Boston Consulting Group Study in the asset management industry now manages over $100 trillion dollars. Fund managers operate in a very wide range of disciplines, such as Global Equities, Asian Bonds, Australian Commodities, American Tech, Growth stocks, Cautious Investing and so on. Their primary claim is that they possess the skill and knowledge to "beat the market" over a given time period. So what does "beating the market" actually mean? You hear in the news how the stock markets of the world performed on a certain day. On good news they tend to rise, on unexpected bad news they tend to fall. This perf...

  The shares mentioned in this blog are done so for illustrative purposes only, and comments made about them should not be used as a reason to buy, sell or hold the share. An Initial Public Offering (IPO) is where a company or Government raises capital from members of the public (and institutions) by offering the chance to buy shares in a firm or State-owned enterprise. Cash in exchange for some ownership and control of the business. Back in the 1980's Prime Minister Margaret Thatcher expressed her desire to make Britain "a share owning democracy", as she sold a number of State-owned enterprises. There were political and (pressing) economic reasons for her doing this and the legacy is a contentious one. However this may be the first major example of a Government actively encouraging the public to participate in IPOs. There were huge advertising campaigns that anyone living in the UK at the time will remember. Such as the sale of British Gas with the " If you see Sid,...

  DISCLAIMER: The author has no connection to Sharesies whatsoever. The firm was picked for the purposes of this blog simply on the basis of the number of times friends have mentioned the name. As normal, nothing within this blog should be construed as advice in any way whatsoever. Those interested in obtaining advice should contact the author via the website, Facebook or LinkedIn.  I had the pleasure of moderating the presentation by Mary Holm at the Central Hawkes Bay Readers and Writers Festival this past weekend. Those of you who read her column in The Weekend Herald or listen to her interviews with Jessie Mulligan on RNZ will know how informative and enjoyable such an event will have been. She manages to answer any question in a simple and clear manner, and back-up all opinions with clear evidence from her considerable knowledge and experience. Being New Zealand, where all investments are viewed in comparison to magnetic attachment to property investment, she had many in...

 With concerns around climate change and human welfare growing, investors are increasingly looking for investment options that do not harm society or the planet. These investments are generally referred to as Environmental, Social & Governance (ESG).  The managers of such investment funds seek to meet an investor's desire to help by typically ensuring that they do not invest in certain industries. The likes of munitions, fossil fuels, and gambling are typically excluded.  This process is known as "negative screening". So it  excludes  those investments that fail to have the correct criteria. However commentators and investors are increasingly querying this approach.  For example, what about the impact of supply chains? Should you not also exclude a firm or even an industry that relies on the use of an excluded industry's product? If the manufacturing of a device entails a huge amount of oil to be burnt, then shouldn't the firm producing the device also ...

If there is one asset class (type of investment) which seems to defy all price predictions, it is oil.  Every time an expert publishes a seemingly rational article, events seem almost bound to turn out differently. Oil is not alone in this of course. Many try to predict the price of gold without success. However in the case of oil is not just the size of the error, it is also the direction that the experts seem to get entirely wrong! Conventional wisdom gets turned on its head time and again.  Whether it's prices hitting  $140  per barrel in 2008, and apparently heading to one hundred and seventy (by December of that year they'd  fallen  almost  60%  to $55); or US Fracking putting a lid on prices at  $50  per barrel in 2017 (by June 2018 they were at $77); or predictions by the US Energy Information Administration that prices in 2020 would be around $59 per barrel, near where they had been through most of 2019: by  April  they...