Vistafolio Review: February 2023 — Protect Your Money Now

Monthly, we update our wholesale investors on what’s happening in the market. Running what’s probably the only late-night trading desk from New Zealand, we’re well-positioned to feel the pulse of the market’s direction.

I parked my car in the city the other day. I usually take the ferry. It’s still half-price transport.

The parking gave me quite a shock. To stay from 9am until 2pm, it was $24.50!

Turns out, anything beyond two hours with Auckland City is $6 per hour.

As I touched my card on the machine to be robbed in broad daylight, I recalled my first internship. With the accounting firm Ernst & Young. Hourly rate: $6.12 per hour.

Money moves on. And inflation is stealing yours’ like never before.

Readers tell us they’re enjoying higher rates in term deposits these days. I came across a 6% lock-up the other day for an entire year.

But in reality, even at these rates — after tax — their money is being eroded quite quickly when you have inflation compounding at around 7%.

And, of course, with no guarantee (yet) on bank deposits in New Zealand, you should do your due diligence. Especially if the deposit taker is smaller.

In one case, someone was in a term deposit with a major bank paying about 5%.

That bank actually pays dividends of 5.5%. But many analysts are also seeing upside on that bank stock of 20%–30%.

The investor could have got the income, liquidity, and potential upside with the stock — as opposed to the fixed interest investment.

But, of course, that would involve some more risk. More ups and downs.

You don’t get something for nothing.

Our job in the markets…

It is to select high-quality growth assets that can, over time, hold fast against inflation.

A good investment at the right time can protect your money from devastating erosion. It can allow your wealth to grow rather than shrink.

Remember, a good business with some moat — case in point, oligopoly banks — can enjoy some inflation. In that case, net interest margins are higher. And there’s a raft of other businesses in commodities, healthcare, and consumer staples climbing ahead too.

Yet there is often volatility along the way. Pessimism. And negative headlines on the ongoing crises facing the world.

Most people see their home price falling. Bad news fed daily via online media and TV. Then jump at a fixed interest rate that looks better than before.

This is my opportunity. With less competition in the market, and days where we still see value, it’s potentially a great time to buy. Especially for those seeking long-term growth with supporting dividend income along the way.

Vistafolio performance*

For the month of February 2023, we were up 0.36% across the composite portfolio (total aggregate return across all portfolios following the strategy).

This brings our return for the year to date (January + February 2023) to 7.09%.

Our average annualised return since inception is 17.68% p.a.

Please see our performance chart for more details.