Within this edition you can read about:
As we move into March we are keeping a close eye on the path of interest rates, Greek debt refinancing, Chinese economic growth (particularly as to how it might evolve post the Communist Party Congress at the end of the year), trade protectionism and politics. We pay special attention to politics given the rise of populist politics in 2016 and the political dynamics evolving in Europe and NZ in 2017. – page 2
Buy A2 Milk, Michael Hill International and Meridian Energy. – page 8
Buy Boral, Computershare and Macquarie Atlas Roads Group. – page 12
Global Equities – America First?
Buy exposure to Emerging Markets, Europe and Japan. – page 16
Risks are unavoidable. However, knowing where specific risks lie is useful. With this in mind we examine a way of detecting companies which are at greater financial risk should the economic environment deteriorate materially. – page 18
Debt Securities or Equities?
Currently in NZ gross dividend yields from shares typically exceed the interest rates offered by debt securities from the same company. We analyse the NZ companies where this is currently the case, and consider the attributes that equities and debt securities bring to an investment portfolio. Finally, we consider where investors should currently focus their attention when constructing a NZ debt security portfolio. – page 20
Currency – Can the US Dollar Remain Strong?
Short term factors are supporting the value of the US dollar. However, how cheap or expensive is the US dollar when taking a longer term view of value? To answer this question, we outline one measure used to assess a currency’s value and find that the US dollar currently appears overvalued. – page 22
How Much Power Does the President Have?
The US political system is designed to prevent one person from having too much power. We review how the US political system operates so as to better understand how President Trump’s policies will evolve. – page 24
Investor Behaviour: Mental Shortcuts
In making decisions humans often take “mental shortcuts”. Consequently, some of these decisions are sub-optimal. This is also the case when it comes to making investment decisions. We examine some of the problems associated with making sound investment decisions and ways of improving the decisions made. – page 26