4 March 2022
Lifetime Investment Update
Russia has now attacked the Ukraine, a country of 44 million people and the second largest country after Russia on the European continent. The world’s reaction is unfolding with both the UK and the USA implementing economic sanctions that will impact the lives of all Russian citizens.
When you combine these latest event with the practical Covid-19 challenges, significant increases in inflation and higher interest rates, the world of investing becomes a very volatile place.
At Lifetime our purpose is to ensure our customers do not have to worry about volatile investment markets and instead focus on enjoying their retirement with a regular income that they can rely on.
It’s Lifetime’s job is to manage market volatility.
We have prepared this short update as a reminder (just in case you were not aware) that managing market volatility in order to preserve capital is a fundamental part of the value we provide to our customers. We constantly monitor financial markets and when we feel volatility or risk is at levels that are not consistent with what we believe is “normal”, we do not look move out of global shares and into cash.
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At Lifetime we have an affinity and passion for developing transparent, low-cost, high value retirement income solutions that New Zealand retirees can have confidence in.
While we are monitoring volatility all the time we don’t make changes to the portfolio very often. We are very mindful of maximising investment returns over 20 plus years and recognise the important role growth assets such as shares play in adding to performance over the longer term. We only reduce our exposure to shares when volatility looks seriously out of step with what we would normally expect.
In recent weeks we have noticed heightened volatility as the world anticipated Russia’s invasion of the Ukraine and the growing concerns over higher inflation, interest rates and the impact on economic growth.
This is one of those times where we believe it is best to be cautious, in a normal environment we would hold upwards of 60% of our retirement income portfolio in shares and we have over the past few weeks reduced this to 40%. We are likely to hold this position for some weeks to come as events unfold with more certainty.
You don’t have to do anything, we just wanted you to know we are actively managing your capital for the long-term and not to be worried by the recent events.
If you are interested in the underlying investment strategy we use to preserve capital please view the video below, which has been prepared by our investment partners Milliman Inc.