tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Saturday, July 11th, 12:05PM

News

rss
Latest Headlines

Dick Smith a lesson in risk

The fallout over technology retailer Dick Smith’s receivership just two years after being listed is a reminder to clients that not everything is a sure bet, advisers say.

Tuesday, January 12th 2016, 6:00AM

by Susan Edmunds

Potential buyers have until the end of this month to register their interest in the firm.

The company, which throughout Australia and New Zealand, was put into receivership when banks withdrew their backing after a weaker-than-expected end of year.

Private equity company Anchorage Capital bought Dick Smith in 2011 for A$115 million ($122 million), stripped out costs and sold down stock before listing it 2013 for A$520 million.

Its share price dropped from A$2 in August to A35c before trading was stopped.

Adviser Jordi Garcia, of New Zealand Financial Planning, said he told his clients not to have more than 10% to 15% of their portfolios tied up in more speculative investments such as new initial public offerings (IPOs). 

He said the Dick Smith experience was a reminder that an IPO could go bad.

“Some IPOs do really well but there are a large number of speculative offering son the market and you have to hold for three to five years to see any sort of change.”

Another adviser, Robert Oddy, said investors needed to understand that they were taking risks when they made investments. “The objective is to try to get reimbursed for the risk you’re taking. In a lower interest rate environment that is difficult to achieve.”

Adviser Simon Hassan, of Hassan and Associates, said it was sensible to keep investments in things such as IPOs to no more than 5% of a portfolio.

Oddy said it was likely to be a turbulent year on equity markets, which could force some clients to rethink their asset allocations.

“Sudden changes and the huge amounts being talked about after the Chinese problems last week, we’re likely to see more of that. It might act as a bit of a circuit breaker to get people to think carefully about whether they have the ability to remain in invested for five or 10 years.”

He said some people might need to think about having more of their money in term deposits so that they could be assured it would be there when they needed it.

Tags: equities financial advisers

« New rules coming for Aussie advisersLVR restrictions to be reviewed »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • Harking back to the old days
    “Tactical move by CIGNA and looks like they have a lot of bench strength now in sales, underwriting and product / pricing...”
    1 day ago by hitting rock
  • Greens want ACC extended to cover sickness
    “Never happen. The Greens are such an aspirational bunch. Must all the weed. They 'want' all sorts of unlikely things...”
    2 days ago by All hat no cattle
  • Harking back to the old days
    “Really positive news. NZ has been blessed by many successful leaders and it is good that their skills can skill be utilised...”
    2 days ago by Francis L
  • Harking back to the old days
    “I dare say Cigna just got that extra grunt it's been looking for....”
    2 days ago by Matron
  • Greens want ACC extended to cover sickness
    “The Greens have no idea The purpose of the Woodhouse report was to remove the "at fault" component of accidents Sickness...”
    3 days ago by LNF
Subscribe Now

Weekly Wrap

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 3.19 3.19 3.49
AIA Special - 2.69 2.69 2.99
ANZ 4.44 3.15 3.25 ▼3.39
ANZ Special - ▼2.55 ▼2.69 ▼2.79
ASB Bank 4.45 3.19 3.19 3.49
ASB Bank Special - 2.69 2.69 2.99
Bluestone 4.44 4.44 4.44 4.44
BNZ - Classic - 2.65 2.69 2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.25 3.29 3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union South 5.65 4.75 4.75 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.60 2.65 2.80
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 3.99 2.58 2.68 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.40 3.54 4.00
Kiwibank - Capped - - - -
Kiwibank - Offset - - - -
Kiwibank Special 3.40 2.65 2.79 3.25
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.49 3.45 3.39 3.69
SBS Bank 4.54 3.29 3.19 3.49
SBS Bank Special - 2.79 2.69 2.99
The Co-operative Bank - Owner Occ 4.40 ▼2.69 ▼2.75 ▼2.99
The Co-operative Bank - Standard 4.40 ▼3.19 ▼3.25 ▼3.49
TSB Bank 5.34 ▼3.35 3.49 3.79
TSB Special 4.54 ▼2.55 2.69 2.99
Wairarapa Building Society 4.99 3.75 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - ▼2.55 2.69 2.79
Median 4.55 3.19 3.22 3.39

Last updated: 10 July 2020 9:02am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com