Axiome Quarterly Q2 2021

Our grandparents may not have been talking about their share portfolios when they said, “Don’t put all your eggs in one basket” but they were making an important point with enduring relevance for investors.

Diversification across asset classes and geographies has long been recognised as crucial to reducing risk in investment portfolios.

As a New Zealand investor, it may seem to make sense to keep your money in our home market – after all, the New Zealand economy is rebounding well from the Covid shock and investing at home gets rid of any currency risk. There is also a comfort factor when you invest in companies you see around you in your daily life. Further, the New Zealand equity market has had an excellent performance over recent years, coming in the top 2 best performing markets in 3 out of the last 5 years.