by George Kerr and Aaron Hing
Paperback, 1999, 153pages, excellent condition
News clips of financial crises have become a familiar sight to television viewers. Wild-eyed traders screaming 'sell, sell, sell'. Dire predictions from earnest pundits. Graphs aiming sharply downwards. Inevitably, these scenes frighten investors, who tell themselves I'm not putting my money into shares if that's what the markets are like. Worse, they shy off other reliable, wealth-creating instruments because they seem volatile and risky. Yet people need a higher return than those offered by banks, whether they save $5,000 a year or have $1 million to invest.
Fear usually drives New Zealanders to the so-called 'safe and reliable'. Houses, for instance. After all, you don't see wild-eyed real estate agents running around somebody's front lawn screaming 'sell, sell, sell'. However, most New Zealanders are massively over-invested in housing and it's becoming an increasingly unattractive alternative in a low-inflation environment.
If it's not fear, it's greed. New Zealanders are highly susceptible to the latest investment fad. We tend to fall for a slick sales pitch promising massive returns with minimal outlay, in anything from a tax-driven kiwifruit farm to a time-share apartment on the Gold Coast.
However, there is an alternative. Safe Haven offers a certain strategy through a financial world that sometimes seems alarming, confusing and unpredictable. That strategy is Value Investing.
Value Investing has a long pedigree. It has worked outstandingly well for over half a century and made many individuals very wealthy. This is how the professionals practise it.