One of the questions we are often asked is what to do when it comes to investing in a low-risk environment.
New Zealand’s low-interest rates create a dilemma. Do you accept a low return because you feel you must protect your capital or do you take a longer-term view that decent returns can still be achieved from regular savings?
Good investment returns are definitely still achievable but of course, every investor’s situation is different. As an adviser, the first thing we always do at Foresight Financial is to ascertain the investment time frame, your current financial situation and how much risk you are willing to take. These things differ vastly from person to person.
The other important thing for us to do is find out a potential investor’s expectations of achievable returns. When it comes to investment returns, we all have to accept that the world has changed since the global financial crisis and therefore, returns are lower. Failure to accept this means you having to take a higher level of risk with your investment planning.
So here’s why saving in a low-interest environment can be a smart move:
Remember this though, whether savings rates remain low or not, the key thing to bear in mind is that if you save more often you will usually find yourself in a better place financially than those who save less but get a better rate of return.
For smart savings advice, give me a call on (06) 751 4510 or get in touch here