SoundFinance

10 Steps to Deal with Financial Stress

Tue, 18 Oct 2011 10:13:00 GMT

As a Result of the Canterbury Earthquake more and more people have been dealing with stress both of a financial nature and in the anxiety stakes. In April Janine Starks put together ten helpful tips on coping and I thought it an appropriate time to remind all those affected of things they can do to relieve the stress factor.

Whether you’ve lost a home, have damage, lost your job, or are now worried about job security, thinking too far ahead makes the problem seem insurmountable. Instead, refocus yourself on the very short term – just the next month or two. Getting back that feeling of control, in some small fashion has a calming effect.

I’m a great believer that collecting information, record keeping and being pro-active goes a long way in regaining control. An organised person conquers a problem with far less stress than those who ‘wing-it’

1. Start a folder: a ring-binder with dividers. If you home is your financial problem, type up a summary page – your address and contact details; EQC claim number; your insurers details and policy number; bank account details; a full list of contact details for your assessor, claims handler, engineer, builder, moving company, storage unit. Have it all in one place so you are not scrambling.

2. File your paperwork: policy document, latest insurance schedule, any letters or emails from EQC, the title to your property, floor plans of your property if you have them. Start a section for photos of property damage, contents claim, correspondence with your insurer and assessor. Have a notes page for writing down the date of phone calls and what was said. Print off all emails and file them. Confirm any verbal conversations on email to your claims handler or assessor.

3. Don’t bother ringing EQC incessantly: you’ll get more and more wound up. But if you send them anything, call and make sure it’s on your file.

4. Talk to friends affected by the last earthquake: find out their tips – we are our own experts.

5. Start collecting information. When EQC arrive on your doorstep for a full visit, you should be fully armed. Have copies ready of any building report, building quotes, engineers report, floor plans etc. What a waste of their time, if they need to explain how a contents claim works. Every broken item should be photographed and numbered, written up on a schedule, with a quote for replacement. This is a laborious task, but the internet is a wonderful tool. Prices of TVs and crockery can all be printed off. If you can’t find the exact model, something close is fine. If the shop you purchased it from is no longer, retailers in other cities can be helpful.

6. Read your policy document: dull as it sounds, check the definition of your ‘home’. Ring your insurer and check to see whether items like your ‘deck’ are covered. I was told ours wasn’t as we hadn’t declared its size, but we managed to over-turn that.

7. Find out what EQC don’t cover: with fences, patios, paths, pools, driveways you won’t need to deal with EQC. Go straight to your insurer to have them repaired.

8. ‘Other people’ don’t have priority: its negative thinking and total rubbish. Those who appear to be making more progress are usually being pro-active and spending some of their own money to get early answers so they can push their insurer into action.

9. Get pro-active: don’t sit around and assume your damage is under $100,000. The 15 minute EQC visit was not carried out by engineers or builders. My own home in Redcliffs was given category 4 (minor damage, 9 month wait). Our private engineer confirmed there is easily more than $100,000 of damage. Carrying out your own engineers report can cost $900. Anyone living on a hill should seriously consider it. Alternatively go for a builder's report as they can help identify hidden damage. Don’t assume every builder is busy as specialist companies spend all day doing reports. Expect a 3-4 week wait (no biggie).

10. Stay proactive with your insurance assessor: they will take photos and have a good eye, but they are not a builder or an engineer. View them as a ‘go-between’. Keep asking what the next step is and what they need from you. They will bring in a proper building assessor who will price up the damage. Then they’ll hand over to project managers who organise the repairs, once EQC have paid out. In the case of a total rebuild, you may be allowed to opt for a full service architect who will project manage as well as provide new plans

The full article can be found at http://www.interest.co.nz/insurance/53091/financial-columnist-janine-starks-prescribes-10-steps-deal-financial-stress-after-ch Janine Starks writes a regular column in The Press and is Co-Managing Director of Liontamer Investments.

A Sneak Peak at the Budget 2011: What's in Store for KiwiSaver

Wed, 11 May 2011 01:24:09 GMT

In a pre-budget speech the Prime Minister, John Key, spoke of reducing the KiwiSaver Member Tax Credits but retaining the $1,000 Kick Start. KiwiSaver members and employees would be expected to contribute more rather than relying on the Member Tax Credits which are up to $1042.86 ($20 a week) each year. These are paid by the Government to the individual’s scheme.

“None of the changes we will be making will affect people before the election so New Zealanders will be voting with all the information they need and can make their own choices”.

The Working for Families programme and the student loan scheme are all set for a trim in the May 19 Budget. The Budget would contain “significant savings, but will by no means be a slash and burn Budget.”

The student loan scheme would also be in for adjustment but would remain interest-free.

"The changes we are making in the budget will make all of these programmes more affordable and ensure they survive into the future," Mr Key stated.

Can You Afford Not to Have Health Insurance?

Fri, 17 Feb 2012 03:29:53 GMT

At one time, health insurance was only for those who preferred to use the private health system...but times have changed.

With the cost of medical treatments and the availability of new procedures and drugs increasing, more and more New Zealanders are going private.

While urgent treatment is always available through the public system, people can find themselves in a slow-moving queue for those ailments that aren’t immediately life threatening.

Health insurance gets rid of having to wait on public waiting lists, and gets you treated so that you can start living normally again as soon as possible. That is its main benefit for most people, and why it is worth considering.

There are other benefits from private health insurance including allowing overseas treatment, accessing different treatments, treatments not available in the public system and assisting with family support in time of crisis or rehabilitation.

To help you decide whether you should think about health insurance, ask yourself:

Is it likely that I would require medical treatment sometime in my life?
Can I afford to cover it myself if I don’t want to wait six months or more?

Surgery is expensive and it is an unfortunate fact that most of us do not get through life unscathed. Health insurance provides peace of mind that, if the unforeseen does happen and the public health system cannot help you, you can afford to get expert medical treatment when you really need it.

Christchurch Earthquake 22 February 2011

Mon, 07 Mar 2011 03:01:20 GMT

My first post has absolutely nothing to do with finance. I just need to relay my day of terror.

On the 22 February 2011 Christchurch experienced the most devastating earthquake for eighty years. This is despite the fact that until 4 September 2010 Christchurch wasn't even aware there was a fault running through the city. This quake was smaller than the 7.1 in September but so much more catastrophic. The 6.3 quake was shallow (at least half as deep as the big one) and also so close to the city. It affected a wider area than the previous quake and many who had little or no damage in September found a different story this time round.

It's the loss of life that is so very sad. Yes, we have lost many beautiful buildings and Cantabrians will grieve for that aspect for many years. But that cannot be compared to the lives lost and the injuries suffered. Lives will be different from now on.

I had been on the phone so was eating a late lunch otherwise I would have been under the bookcase in the office! I was in the kitchen making a cup of tea to take back to the office when it struck. Jamie, our miniature dachshund had just darted through to the lounge at a great rate...I expect he sensed something. But my first thought was that he was under the bookcase now blocking the kitchen and lounge area. Fortunately he was safe shivering in the lounge when I managed to get to him by accessing through the bedroom door and then into the lounge.

I really didn't want to go back inside with all the personal items, broken glass and drawers flung open as every time I stepped inside there was another aftershock. Armed with my mobile I tried desperately to call Kevin and other people in Christchurch but was unable to get through. Messages came through three days later that Kevin had been trying to leave for me. I phoned my poor brother and sister-in-law in South Africa oblivious to any time difference...it was 2.00am in the morning! Heaven knows if they got back to sleep after me screeching down the phone as another aftershock rocked through.

Encouraged by my sister-in-law Sue I ventured out of the garden to find someone else on their own or any other company. The builder that was doing work on a nearly-completed home a couple of doors down checked that Trish and I were safe before rushing off to see his elderly mother. The house he was working on apparently is a gonner.

Trish lives in a house a few doors away and she was on her own. We spent the rest of the day trying to get hold of people and looking after the dogs that had got through broken gates etc. At one stage we had five dogs in tow. We knocked on doors to make sure no one was trapped. Trish wouldn't go into her house for her cigarette papers as she rolls her own so ended up using ordinary paper! Desperate times call for desperate measures!

We had no power or water for three days but are okay now. Power is sporadic and water pressure goes up and down but there are still people without one or the other or even both so we are very lucky. Our home is safe and secure and we are safe also. We have some lovely neigbours and we all know each other much better than we did before. Must go now, Jamie wants a walk...talk soon.

Earthquake Assistance Offer: FREE advice

Wed, 20 Apr 2011 02:43:48 GMT

The IFA have put together a guide to help answer questions relating to advice on financial matters for those affected by the Canterbury earthquake. The guide answers questions such as:

What you may need advice or help with
Making a claim under a house or contents policy
Making a claim under a life insurance or income protection policy
Managing your budget and cashflow
What to do with any investments you have
What options you have for reducing your commitments to KiwiSaver or insurance premiums

You can view the IFA guide here and not only that, by presenting a copy of the flyer you will be elligible for three hours worth of free advice. This offer is only available from approved advisers who are participating in the scheme.

If you would like to arrange an appointment please contact me and take advantage of this offer!

Financial Crisis and Earthquakes

Thu, 30 Jun 2011 01:09:40 GMT

In an article (Publisher's Perspective: Separation of Church 16 June 2011) by Graham Rich of FinancialAlert he describes the global finance crisis in term of the Christchurch earthquake. I thought this was a very appropriate description and include it here.

“The GFC was akin to a series of Christchurch earthquakes and aftershocks unpredictably hitting the global financial markets, and the NZ financial markets, financial services industry and financial adviser industry. Just like the Christchurch earthquakes, no one was really prepared for the GFC (no matter what they may now say), no one expected it, no one wanted it, no one liked it and many were seriously hurt by it. And, just like the Christchurch earthquakes, no one party was to blame for all the loss.”

In the Wake of the Quake

Thu, 07 Apr 2011 21:45:00 GMT

Having two major catastrophes in Christchurch has meant that the home based insurance company AMI has been found short on its own insurance strategies. Last year no one would have thought that Christchurch would have even had one earthquake never mind two and over 6000 aftershocks!

It just goes to show that although we don't like insurance -- it is a must. It is there to protect against the unexpected and this was unexpected...so what of AMI? Did they cater for the unexpected? AMI covers 30% of the Christchurch insurance market and that's a large portion of any business' portfolio in one section.

Japanese Earthquake

Sun, 13 Mar 2011 03:53:34 GMT

The earthquake in Japan brings so much more heartache, disaster and despair than we can imagine. The nuclear threat seems more horrifying than the earthquake and the tsunami even. While I can understand the fear and horror of experiencing the shakes I cannot imagine the horror those poor people are now living through. The aftershocks will continue to come, adding to their stress.

My sympathies to everyone living in the zone.

The tsunami was witnessed as far away as New Zealand. A friend was in the Bay of Islands and this is his description of the tsunami in the North Island:

"I saw what at tsunami can be like today, I have never seen water mass move so fast like I saw today. I was at a property right on the edge of the water, demonstrating machines, when the first, second,and 3 more hit over a nearly 6hr period, the noise of the water coming in and the speed it came on and out, along with the silt that came with it, amazing, when I came back on the ferry the colour of the water is something I have not seen before, it was a darker brown than when we get floods and run off, wish I had a video camera, as it is hard to describe. Those poor buggers in Japan would have had no show with those big waves, such is the power of nature."

New Zealand Suffers Two Credit Rating Downgrades: Will Mortgage Rates Be Affected?

Sat, 01 Oct 2011 09:48:54 GMT

Two ratings agencies, Standard & Poor’s and Fitch, have downgraded New Zealand’s credit rating during the week. And we are warned that this could have the effect of increasing our mortgage rates. This should not be immediate as the major banks do not need to raise funds from overseas at present.

The article follows and can be found in the NZ Herald.

Downgrade could hit mortgage rates

By Christopher Adams

5:30 AM Saturday Oct 1, 2011

The downgrade of New Zealand's economy by two ratings agencies could result in mortgage rate rises, Finance Minister Bill English said yesterday.

But economists say the move should not cause a big rise in borrowing costs immediately because local banks do not need to raise much money.

Standard & Poor's (S&P) lowered its long-term foreign currency rating on New Zealand from AA+ to AA and its long-term local currency rating from AAA to AA+, following a move made by Fitch earlier in the day.

Fitch and S&P are two of the three major credit ratings agencies in the world. Moody's, the third, has held firm its AAA rating on New Zealand with a stable outlook.

S&P said this country's strengths - including economic resilience and a sound financial sector - were offset by high foreign, household and agriculture sector debt, a dependence on the commodity sector and fiscal pressures associated with an ageing population.

"The blowtorch is very much on the Government to really start acting on some of the policy options they've been canvassing with the many working groups and task forces [set up to address economic problems]," said Shamubeel Eaqub, principal economist at the New Zealand Institute of Economic Research.

BNZ senior economist Craig Ebert said little had changed in New Zealand's economic situation, and the downgrades were probably linked to continuing global uncertainty.

The downgrades would contribute to a rise in funding costs for banks, which would be transmitted into the interest rates consumers paid on fixed-term mortgages, said Westpac senior market strategist Imre Speizer.

He said most banks were well-funded, so they would not be going out into the market to borrow for some time.

"Over the longer term eventually [the downgrade] should hit term mortgage rates," Mr Speizer said. "Bear in mind also that most borrowers are on floating rates and those will be much less affected."

In a press conference yesterday afternoon Mr English conceded that interest rates could rise.

"A downgrade, in conventional wisdom, would tend to lift your [interest] rates a bit."

Labour finance spokesman David Cunliffe said the Government's reputation was "in tatters" and New Zealanders could expect to pay more for their mortgages as a result of the ratings cut.

"[Prime Minister] John Key said at the time of the last Budget that if we got a credit rating downgrade that would add 1 to 2 per cent on everybody's mortgages ... and that avoiding a downgrade was their top priority," he said.

"Well, whatever they thought they were doing hasn't worked because they've had two downgrades in one day and New Zealand has a crisis of confidence."

The New Zealand dollar fell from above US78c to US76.92c against the US dollar yesterday morning after news of the Fitch downgrade hit markets at 5.30am.

The S&P ratings cut had little impact on the kiwi, which was trading at US76.71c at 6pm yesterday.

Mr Speizer said the two downgrades supported Westpac's expectation that the New Zealand dollar would move towards around US72c over the coming weeks.

The New Zealand stock market held strong with the benchmark NZX-50 index finishing the day up 1.31 per cent.

It is likely that the rating downgrade is related to the uncertainty that is affecting global markets but the announcement has most certainly affected the New Zealand dollar this week.

To understand how credit ratings work the Reserve Bank of New Zealand has put out this handy guide.

Saving Money is Good for Us and Good for the Country

Fri, 07 Oct 2011 02:07:38 GMT

As New Zealanders we are constantly being told we don’t save enough.

From International Rating Agencies that downgrade us, to politicians and to the Reserve Bank Governor, the message is: we are spending too much on living for today and not enough on providing for our tomorrows.

Saving for retirement and other future needs will without doubt mean we will better off in the long run. But these savings also benefit the country – particularly if we invest them productively.

For New Zealand to achieve prosperity and additional job creation, significant investment is required. Every factory, plantation/forest, shopping mall or engineering project needs investment capital to turn it from a bright idea into reality. That capital can come from two places: New Zealand or overseas (borrowing).

The more we as New Zealanders’ save, the greater the pool of investment resources to draw from. Of course, not all of our savings should be invested locally – remember that one of the golden rules of investment is diversification – but certainly a reasonable proportion invested at home makes good sense.

As a country our past savings record has been dismal. For a start, we don’t save enough and, when we do save some money, many of us tend to put it in the bank rather than where it can work more productively – for example, investing in the sharemarket.

That’s why around two-thirds of the New Zealand sharemarket and many of our former state assets are now owned by offshore investors – investors who were willing to invest where we either didn’t want to or weren’t able to due to a lack of savings!

As I said before, there are two places to get capital – New Zealand and overseas. And borrowing from overseas has effectively seen our country being downgraded!

The recent earthquakes in Christchurch are going to cost the country a considerable sum of money. One of the many ways the Government will be looking to raise the necessary money to kick start the infrastructure rebuild will be the issuing of bonds. These bonds will be critical for the economy and could possibly be a prudent portion of a diversified portfolio. Details on these bonds will probably be available in coming months.

Having healthy savings levels means a country can call on domestic capital for important projects and investment. As a result, individuals end up better off through better returns on their money – and we also benefit as a nation.

Whichever way you look at it, saving money makes sense – for us and for the country!

Steve Jobs, The Leader and Innovative Entrepreneur

Thu, 06 Oct 2011 23:20:20 GMT

There is no doubt that Steve Jobs, co-founder of Apple, has made a massive impact on the world as we know it. Now that he has gone we are finding out more and more about the man who was really a rather private person.

He was a charismatic leader that's for sure. Here is an excerpt from an article by John Markoff published in the New York Times:

Mr. Jobs was neither a hardware engineer nor a software programmer, nor did he think of himself as a manager. He considered himself a technology leader, choosing the best people possible, encouraging and prodding them, and making the final call on product design.

It was an executive style that had evolved. In his early years at Apple, his meddling in tiny details maddened colleagues, and his criticism could be caustic and even humiliating. But he grew to elicit extraordinary loyalty.

“He was the most passionate leader one could hope for, a motivating force without parallel,” wrote Steven Levy, author of the 1994 book “Insanely Great,” which chronicles the creation of the Mac. “Tom Sawyer could have picked up tricks from Steve Jobs.”

You can read the full article here: http://www.nytimes.com/2011/10/06/business/steve-jobs-of-apple-dies-at-56.html?pagewanted=1&_r=1

And will Apple suffer without Steve Jobs at the helm? Here is view of Brad Stone and Ashlee Vance in an article in the Bloomberg Businessweek.

Jobs was a total original. He was somehow able to blend iconoclasm, rock-and-roll, and chic industrial design with the nerd sciences, as well as the unseemly profit motive of the corporation. He made that contrary combination seem totally legitimate. His iconic products—iMac, iPod, iPhone, and iPad—literally changed the world, making people more connected in the virtual world and less so in the physical one. He had a knack for whipping customers and the media into frenzies of anticipation and adulation, and he often elevated the business of Apple with a touch of the poetic. “If the hardware is the brain and the sinew of our products, the software is their soul,” was one of the last things he said publicly, at an Apple event on June 6.

Apple will undoubtedly suffer without him. All the various aspects of his contribution have been chronicled since his resignation on Aug. 24, ad nauseam. Jobs harangued his employees into meeting the standards of his own lofty perfectionism, over and over. He canceled as many projects and prototypes as he approved, which ended up focusing Apple’s attention and resources on just a few game-changing products. He was relentless at manipulating the media, by alternately withholding access and then granting it, and with theatrical product reveals and occasionally belligerent interviews. He could turn a routine press conference to introduce a new gadget into something as anticipated as the Super Bowl.

At Apple’s presentation of the new iPhone on Oct. 5, Jobs’s absence was gnawingly felt. Apple’s new chief executive, Tim Cook, and his fellow execs exuded confidence and used a lot of the same intonations as Jobs. But they did not come near to expressing his vivacious spirit or his deepness of feeling about Apple and its future. It felt, in a way, like they were auditioning for something. Cook himself repeatedly used the word “momentum” to express the company’s progress. Apple surely has that—shares of its stock are up 4,000 percent over the last 10 years. But Steve Jobs never had to repeat a word like that.

Jobs believed the best-looking, easiest-to-use computers and devices were seamlessly integrated products where both the hardware and software were created by the same company. That conviction was wildly out of fashion in the 1990s, when Microsoft ruled the land and companies like Dell and Hewlett-Packard packaged computers around Bill Gates’s operating system and Intel’s microchips. Jobs tenaciously stuck to his principles and his revival of Apple—beginning in 1997 but really gathering steam with the 2001 release of the iPod—was not only a triumph of his vision, but a wholesale rejection of the previous decade’s conventional wisdom. “Steve was among the greatest of American innovators—brave enough to think differently, bold enough to believe he could change the world, and talented enough to do it,” said President Barack Obama in a statement.

Silicon Valley will now be a different place.

Read to article at http://www.businessweek.com/magazine/steve-jobs-departs-a-world-he-helped-transform-10052011.html

Questions are undoubtedly going to be asked on the future of Apple and we can only trust that Steve Jobs made the best of his time left by placing the best people in charge of his legacy. He will be missed.

The Best of Season Wishes

Wed, 28 Dec 2011 02:06:22 GMT

Another big quake interrupted my opportunity to wish you all well...can't stop Mother Nature, can you!

Whether you spent Christmas at the beach or in the snow I hope your day was happy. If you don't celebrate Christmas I hope you have enjoyed the break.

My wish for all of you is for a brighter year ahead. And may 2012 hold all you would wish for yourself, may your dreams come true and your goals be achieved.

Talk to you in the New Year!

The Main KiwiSaver Changes

Tue, 28 Jun 2011 02:20:45 GMT

There are three main changes to KiwiSaver to be implemented progressively:

The maximum Member Tax Credit (MTC) will be halved from $1 to 50c for every dollar a member contributes, up to a maximum of $521 per annum. To be eligible to receive the maximum MTC ($521.43 per annum) you still need to contribute $1,042.86 per annum.

This change will relate to your contributions made from 30 June 2011 onwards, but because the MTC is paid annually in arrears, you will not receive the new MTC amount until after 30 June 2012.

Currently, contributions up to 2% from employers are exempt from Employer Superannuation Contribution Tax (ESCT). From 1 April 2012, all contributions from your employer will be subject to ESCT at your marginal tax rate.

From 1 April 2013, it is proposed that the minimum employee and employer contributions will rise from 2% to 3%.

Well Done Canterbury Authorised Financial Advisers!

Fri, 30 Sep 2011 02:05:23 GMT

The extended deadline to become an Authorised Financial Adviser (AFA) has meant that there are now 173 Canterbury advisers with the required designation. There has been a rigorous process to go through and with all of the disruptions over the past year the Financial Markets Authority has called this achievement ‘impressive’.

It has been recommended that people in the Earthquake Red Zone ensure that they deal with an Authorised Financial Adviser when making important decisions going forward. The quoted article that follows is from the FMA website.

Canterbury advisers rise to the challenge

30 September 2011

76 Canterbury financial advisers have met an extended regulatory deadline to become Authorised Financial Advisers (AFAs).

Due to the disruption caused by earthquakes, Canterbury advisers were given until 1 October to be authorised to advise on investment products and offer services such as financial planning.

Elsewhere in New Zealand, advisers had a 1 July deadline. 97 Canterbury advisers met the July deadline.

FMA Head of Primary Regulatory Operations Sue Brown said the commitment that many advisers have shown to achieving authorisation has been impressive.

"We spoke to advisers shortly after the February earthquake who had suffered considerable personal loss, but what they were still anxious about was being able to help their clients. Their professionalism and commitment to client care define the spirit of the new regulatory era," Ms Brown said.

FMA recently ran an advertising campaign targeted at residential Red Zone homeowners recommending that they seek the right type of professional advice.

"Seeing a professional financial adviser will be very helpful to many Canterbury residents right now, but people need to check they're dealing with someone who is following the new rules. They've been put in place to help protect investors," said Ms Brown.

A full list of AFAs is available on FMA's website www.fma.govt.nz.

Special Red Zone website pages also have information about other types of financial advisers who can help with mortgages and insurance, and about how to check you're dealing with the right type of adviser.
FMA's consumer help line is 0800 434 566

I’m pleased to say that I was one of the 97 advisers who made the July deadline to register as an AFA

When Disaster Strikes Should Investors Panic?

Tue, 25 Oct 2011 02:18:11 GMT

More and more these days we hear of, or experience a disaster of some kind -- and it seems to be almost weekly. There were the Australian floods, the Christchurch earthquakes, the Japan earthquake and tsunami, the various North African uprisings, Libya’s dictator and now the large Turkey earthquake.

No doubt, many investors will be asking themselves what they should do with their investments.

The answer is simple: stick to your long-term plan. For most investors, this will mean sitting tight and doing nothing.

In times of upheavals and uncertainty, there is always a temptation to do something hasty, but it should be resisted. Unless you actually need your money now, withdrawing is a kneejerk reaction, rather than a rational response.

These are emotional responses…

Emotion causes investors to panic during market dips or local economy shocks, become greedy when markets rise, follow herd behaviour, become irrationally attached to their investments, switch too often between funds and take on too much or too little risk. This behaviour has the ability to have a significantly negative impact on investment returns…

.....

Understanding and acknowledging your emotions and the influence they have on your investment behaviour is the first step to controlling them. Investors with certain personality types, such as confident alpha males, are often more prone to making emotional investment decisions. Unfortunately, these are often the very people who are least likely to acknowledge that that they are predisposed to doing so.

http://www.cover.co.za/investment/the-destructive-power-of-emotional-investing-when-disaster-strikes

The destructive power of emotional investing when disaster strikes by Rob MacDonald.

Let’s take a look at what’s happening. There has been loss of life (which is absolutely tragic), there has been economic disruption and massive disruption of property. Oil prices have risen, currencies have become more volatile and share markets have reacted nervously and in many instances taken a tumble.

The natural emotional reaction for many of you is probably to withdraw your money from various investments and head for the bank. However, this could potentially be the wrong move.

History shows there is every indication the markets will rebound – and even go on to reach new highs. However, by selling now, the most likely result is that you will take an immediate loss, at the same time creating buying opportunities for others.

Sharemarkets by their very nature are volatile, and they can and do react swiftly to events – but that doesn’t mean investors should follow suit.

It’s at times like this, investors need to keep their eyes firmly on their long-term strategies. As terrible as recent events are, retreating from the markets won’t help anyone – yourself included.

During the next few days or weeks while there is uncertainty and confusion in the financial markets, the best response for investors is to stay focused and ride out the volatility. If you are invested in good quality actively managed funds, then your fund manager is probably closely monitoring the situation and taking advantage of the opportunities that volatility creates. The manager will be looking at what stocks are likely to show significant growth as and when the rebuilding phase commences and will have made a decision to purchase these stocks at a discounted rate. As always, talk to your financial adviser for specific advice relating to your personal situation or contact Lyn.