Well Santa didn’t deliver on my Christmas wish.
December was incredibly volatile with markets around the World tumbling. New Zealand was, once again, a strong performer relative to other markets only falling 0.1% for the month. In contrast for much of the World it was a very weak month. The US S&P 500 share market index fell 9.2%, Europe was down 5.4% and China down 5.2%. Overall, in New Zealand dollar terms, global markets were down 4.7%.
As is often the case government bonds acted as a port of calm in the storm with falling interest rates leading to capital gains for fixed income investors. This is exactly why we recommend portfolios are diversified between shares and fixed income for most investors …