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Thread: Investments.

  1. #31
    Member Tussock's Avatar
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    Quote Originally Posted by Tahr View Post
    I have heard this talk all of my life. I think most of it comes out of the last book someone bought at an airport.

    What I have seen have been cycles of highs and lows in all markets but over all accumulated gains. I think the truth is likely that when there has been a sustained high there will be a downwards correction, and when the correction has run its course and the economy begins to drag we have a sustained high again. And so on. We just bob along with it and will probably continue to do so.
    I get your logic, but you must be aware some major things have been changing over the course of your life. While there have been short cycles in the course of your life, you have actually seen steady change. I'm guessing you don't follow this closely.

    The economy has cycles longer than your life span, as well as the ones you are familiar with.

    Any explanation for interest rates below zero for a decade. Did they have that at any other point in your lifetime?

    The slight rise in interest rates and fall in other stimulus nearly crashed the markets. There were rate cuts and more stimulus because they system failed that stress test.

    Then along came corona virus and cut global GDP and there is no fat in the system at all. This is the giant nut kick mentioned earlier.

  2. #32
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    Quote Originally Posted by Moa Hunter View Post
    Probably the smartest people will sell everything, buy gold and sit for a couple of years while govts cut interest rates further and the value of currency, shares and property fall, then those same smart people will re-enter the market and buy back twice what they had before with the same money. Seen it before.
    Coronavirus is set to seriously bugger our economy
    I hope not. The more people that stay in the game the less blood on the trading floor. A few more weeks like this one and many will have too many losses to exit the game.

  3. #33
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    Quote Originally Posted by nor-west View Post
    Whats kiwisaver doing, is there an annual limit? could dump it all in my wifes account only 2 years away from being able to get it back.
    Have kept my wifes Kiwi going with Fisher Funds and been dumping money in there, good rates so far.
    Boom, cough,cough,cough

  4. #34
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    Quote Originally Posted by Gibo View Post
    Port of Tauranga
    Theyre turning ships away at present and have some concern for the short term future, maybe a good time to get in if their shares drop?
    stevodog likes this.
    Boom, cough,cough,cough

  5. #35
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    Quote Originally Posted by Maca49 View Post
    Theyre turning ships away at present and have some concern for the short term future, maybe a good time to get in if their shares drop?
    My lips are sealed
    Maca49 likes this.

  6. #36
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    Well guys, hate to say it but most of my money has come from building and flipping houses, something the government put an end to with leaky homes, bit like the firearms deal, blamed the privates building houses for some of the homes a long with builders, let the builders off the hook and caned the private guys with stupid regulations.
    Moa Hunter likes this.
    Boom, cough,cough,cough

  7. #37
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    Quote Originally Posted by Maca49 View Post
    Well guys, hate to say it but most of my money has come from building and flipping houses, something the government put an end to with leaky homes, bit like the firearms deal, blamed the privates building houses for some of the homes a long with builders, let the builders off the hook and caned the private guys with stupid regulations.
    NZ is considered a very desirable place to live by the international community as we all know. Always a wait list to get in, so surely that demand will underpin our property market into the long term. The Govt will change if not at this election at the one following it, then National will ease foreign investment laws and away we go again.
    Maca49 likes this.
    'Bother' said Pooh, as he chambered another round ... Wong Far King Way

  8. #38
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    Quote Originally Posted by Tussock View Post
    I get your logic, but you must be aware some major things have been changing over the course of your life. While there have been short cycles in the course of your life, you have actually seen steady change. I'm guessing you don't follow this closely.

    The economy has cycles longer than your life span, as well as the ones you are familiar with.

    Any explanation for interest rates below zero for a decade. Did they have that at any other point in your lifetime?

    The slight rise in interest rates and fall in other stimulus nearly crashed the markets. There were rate cuts and more stimulus because they system failed that stress test.

    Then along came corona virus and cut global GDP and there is no fat in the system at all. This is the giant nut kick mentioned earlier.
    My understanding - and I don't know if I have it 100% is that we should have experienced a much bigger correction and crash in 2008 than we did and that it was staved off by money printing ( quantative easing / credit creation ) a bit like FDR did after the 'Great Depression'. Then when the 'real' correction comes it is much worse than if it had not been postponed. Do I have this right ??
    chainsaw likes this.
    'Bother' said Pooh, as he chambered another round ... Wong Far King Way

  9. #39
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    Having been involved in the finance sector, many years ago, I have an aversion to letting ours play with my money, as I get older and run out of recovery time, this aversion has got worse
    chainsaw and Moa Hunter like this.
    Boom, cough,cough,cough

  10. #40
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    Quote Originally Posted by Moa Hunter View Post
    My understanding - and I don't know if I have it 100% is that we should have experienced a much bigger correction and crash in 2008 than we did and that it was staved off by money printing ( quantative easing / credit creation ) a bit like FDR did after the 'Great Depression'. Then when the 'real' correction comes it is much worse than if it had not been postponed. Do I have this right ??
    You have it right. If the stimulus worked there would be real growth, 2% inflation and interest rates would have normalised to closer to 10%. That was the plan.

    That did not happen.

    So now the scenario you describe is in play.

  11. #41
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    Quote Originally Posted by Moa Hunter View Post
    My understanding - and I don't know if I have it 100% is that we should have experienced a much bigger correction and crash in 2008 than we did and that it was staved off by money printing ( quantative easing / credit creation ) a bit like FDR did after the 'Great Depression'. Then when the 'real' correction comes it is much worse than if it had not been postponed. Do I have this right ??
    yeah, pretty much along with the measures tussock mentioned quantitative easing is pretty maxed out and there's not substitute for growth.
    Not all growth is equal though but still spins over the GDP wheel. Govt. Infrastructure spending and in some cases bailouts can help here and in 2008 we were saved by better banking systems, booming dairy and the great GDP spinner of the Christchurch quakes.
    chainsaw and Moa Hunter like this.

  12. #42
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    Quote Originally Posted by Gibo View Post
    My lips are sealed
    Around what?
    Moa Hunter likes this.

  13. #43
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    The timing of this thread may prove humorous.

  14. #44
    GWH
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    Quote Originally Posted by Moa Hunter View Post
    Probably the smartest people will sell everything, buy gold and sit for a couple of years while govts cut interest rates further and the value of currency, shares and property fall, then those same smart people will re-enter the market and buy back twice what they had before with the same money. Seen it before.
    Coronavirus is set to seriously bugger our economy
    That is exactly what my business partner has done. Sold up a fairly large property portfolio.

    The 'everything bubble' is near popping. This bull run has gone on a long time now, the longer they last the bigger the mess when they do finally end.

    Back on September 17th some odd stuff happened on US financial markets. An inter-bank lending rate (repo rate) suddenly spiked from 2.4% to 10%. Due to a liquidity issue, basically banks with money refused to put their money into the market, even after rates spiked up.

    If that repo rate has stayed at that level for an extended period at least one of the 4 main US banks or another huge financial institution would have not been able to sustain paying those high rates and would have collapsed.

    To prevent this the U.S. Fed Reserve bank stepped in and printed and injected 53 billion into that market immediately to restore liquidity and try to calm the market. They expected by the end of Sept everything would have returned to normal.....it didn't.

    Since then the Fed have been continuing to pump $ in to prop the market up. As of 2 weeks ago the Fed has now printed and pumped in excess of US $522 billion into that inter-bank repo market.

    Basically they've backed themselves into a corner with no way out.

    The damage is done, its only a matter of time.

    Here's a good analogy, the titanic has hit the iceberg (Sept 17 2019), passengers felt a little bump but everything seems ok on deck. The band is still playing, people are still dancing and laughing but down in the engine room water is pouring in and it's inevitable that the ship will sink, we just don't know how long that will take.

    This next global crisis is likely to be much much worse than the last GFC due to current debt levels massively higher than pre GFC.

    I wouldn't be putting $ in the stock market or property currently. But there will be big opportunities to buy value once it's all corrected at some point.
    Moa Hunter likes this.

  15. #45
    Member Gapped axe's Avatar
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    As my time is now limited, I’m very pleased that 20yrs ago I invested in a fun holiday property. This property has provided myself and the family with years of enjoyment. Had the property valued recently and it blew me away. Great investment financially and lifestyle.
    Tahr, GWH, Ground Control and 3 others like this.
    "ars longa, vita brevis"

 

 

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