Your Mid-Year Investment Update
We are happy to report on the continued progress of your plan and investments during the very eventful first six months of 2026.
When we refer to "progress", we mean more than short-term changes in portfolio values. While many investment markets delivered positive returns over this period, individual portfolio performance will have varied depending on each client's personal investment strategy and circumstances.
We believe genuine progress is best measured by the long-term growth in the underlying businesses our client’s portfolios invest in, together with the income they generate, rather than by short-term market movements alone.
We divide this mid-year update into two parts: a restatement of our unchanging investment principles and policies, followed by whatever current observations can sensibly be drawn from this most turbulent year.
Our Investment Philosophy
·We are goal-focused, plan driven, long-term equity investors, working over years and even decades toward the attainment of your most important financial goals
·The sequence of our decision-making process is always: first to quantify your goals, then to make a rational plan for achieving those goals, and finally to create a portfolio whose historic returns seem best suited to your plan
·Unless your goals change, there should be no reason to alter your plan. And if your plan remains in place, so – broadly speaking – will your portfolio.
·We do not react to current events of any kind, be they economic, financial, geopolitical, or whatever.
· We believe that the economy can never be consistently forecast, nor the markets consistently timed
· Hence, we’ve decided that to capture the full long-term returns of our equity portfolio, we must remain fully invested in it in “good” markets and “bad”
Market Update - Mid-Year 2026
·There has rarely, in our experience, been a more eventful six-month period than the one just past. A major war, significant disruption in energy markets, persistent inflation in the US, the renewed prospect of higher rather than lower interest rates, equity valuations near historic highs, extreme concentration in the broad market averages, heightened volatility across alternative assets such as Bitcoin and precious metals values, and by far the biggest initial public offering in history – around spacecraft, of all things.
·How would one go about making rational investment policy out of this maelstrom? The answer – as we believe will be intuitive to all our clients – is that one doesn’t, because one can’t. It’s at such times that we can stand back and almost celebrate such chaos, for one compelling reason: it has nothing to do with us.
·As indicated above, we have goals, a plan, and a portfolio as closely aligned with both as we know how to make it. In practice, we are very broadly diversified equity investors, and we rebalance annually – the latter systematically reduces our exposure to richly valued market sectors, so we increase our ownership in out-of-favor (and perhaps relatively more reasonably valued) areas.
·It will not have escaped your notice that this is the opposite of what most investors do, especially at times like this: they go chasing the market sectors that have already appreciated the most, in the apparent belief that they can only go up even more.
·Meanwhile, we who see ourselves as long-term owners of consistently superior businesses as distinctly opposed to traders in “the stock market” can only marvel at the extent to which the earnings of these companies have soared and are continuing to do so. Their profit margins are at all-time highs, and they continue to raise their dividends, even as they invest in even more innovation and the growth of their businesses.
·None of this is meant to suggest that this hugely emotion-driven equity market can’t significantly and even savagely correct at any moment. It can, and if history is any guide, it will – probably when the consensus is least expecting it. And because we know that our inability to time it is total, we will plan to ride it out, as we always have.
FoxPlan specialist staff and your individual adviser are here to respond to any and all questions and concerns you may have.
Thank you, as always, for being our client. It is a privilege to serve you.
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Email: info@foxplan.nz
Phone: 0800 667 873
Website: foxplan.nz
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This newsletter is general information only and does not take into account your individual circumstances. It is not personalised financial advice. Past performance is not a reliable indicator of future performance.