March 15, 2026 • 41 mins
From April 1st, the KiwiSaver minimum default contribution rate will move up to 3.5%.
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talks,
it'd be.
Speaker 2 (00:15):
Pretty little.
Speaker 3 (00:18):
Because you said, I'm just right, I'm just my, I'm
just my, I just.
Speaker 4 (00:33):
B I just write first, I'll just say that your
face got me so cheat.
Speaker 5 (00:45):
I'm so intrigued.
Speaker 3 (00:48):
What good is beauty if your body gets finn.
Speaker 2 (00:53):
I don't want to know?
Speaker 5 (00:55):
So please, Yes, welcome back to the Weekend Collective. I'm
Tim Beveridge. If you have just joined us, and this
is smart Money where we talk I said last last day,
I say we talk about all things to do with money,
but of course we don't talk about everything to do
with money. In the show. We usually have a couple
of focal points and we are going to have a
bit of a chat. There's big world's Big changes is
(01:17):
happening in the world of finance at the moment. For
Kiwi's the Kiwis Savior, changes are coming very soon and
from April the first, the minimum default contribution rate is
going to move up to three and a half percent.
We're also seeing that, so that's one thing we're going
to talk about. We're also seeing unavoidable impacts of markets
as a result of Yes, Yes, the war, despite where
(01:38):
they want of people on to call it a war
or not. In the Middle East, the whole situation with Iran,
that's what we'll call it. We'll call it the situation
with Iran. But we're going to get into the ti
Wei Saver side of things first anyway, and maybe have
a chat about how the war has impacted on your
investment habits or decisions or you know, everything you do.
(02:00):
Because by the way, if you're thinking of changing to
a more conservative fund because trouble's broken out, you too late.
You need you need to know when the trouble's coming.
You need to be a soothsayer or a fortune teller
and guests and then you'll be all right. But if
you're responding to bad news, it's too late. But anyway,
we want your participation as well.
Speaker 4 (02:16):
On No.
Speaker 5 (02:17):
Eight hundred eighty ten eighty or text nine two nine two.
And now our guest. He is the co CEO of
Harbor Asset Management and he's with us here for smart
Money and his name is Chris Wilson. And actually Chris,
but just to get things rolling, You've got a little
bit of good news from the harbor Asset, haven't you.
Speaker 2 (02:37):
Yeah, thanks, Tim, Thanks for opening with that. No, we
were really stoked to win the Fund Manager of the
Year award overall Fund Manager of the Year for morning
Star for the second year in row, just in the
last week or two. So it's been a big week
for the business.
Speaker 4 (02:48):
Wow.
Speaker 2 (02:49):
Excited.
Speaker 5 (02:50):
Wow is there a lot of How many people are
sort of would consider themselves up for that award?
Speaker 1 (02:55):
Oh?
Speaker 2 (02:56):
Look, I think most people in the investment industry, So
you think of those keysaver advisers, people who manage money professionally.
It's taken out of that pool. So you know, within
the industry something we look towards. I think the man
on the street may not have heard of it as much,
but it's aptly proud.
Speaker 5 (03:10):
Of how and why did you win? This is the
time to look.
Speaker 2 (03:17):
It's it's one of those things. I think it's a
we've got a great team at depth right across the
different massive classes that we manage, and that consistent team
and discipline and investment discipline behind what we do really
comes through. And you know, obviously in some strong returns
helps and yeah, actually recondition is it?
Speaker 5 (03:35):
Does it just done on? You guys have nailed the returns,
you know, like the line muffets.
Speaker 2 (03:38):
Of not just that, not just that. So no, look,
it does, it does have an impact, but it's not
the sole soule driver. They are looking for consistency over
over longer periods of time rather than just one year's
worth of returns just.
Speaker 5 (03:50):
Out of curiosity with Harbors set. I mean you, guys,
we speak to you regularly on the show the when
you when you have a team of invest investors and
you are running a company like you do. I hate
the expression mission statement because it's such a core thing,
but there would be a mission sort of statement as
to how you would define the way you do your job.
(04:11):
What's what's this?
Speaker 2 (04:12):
Yeah, we're most trusted to be the most trusted investment
manager in New Zealand and that's that's what we seek
to do for our clients all the time. So yeah,
we want people to feel comfort and feel trust that
we're doing the right thing for them to times.
Speaker 5 (04:25):
That's really quite a good one, isn't it, Because whenever
you come up with a decision and you've got some
to think about and you just remember, well, does this
feed into us being well trusted or not? Yeah?
Speaker 2 (04:34):
Absolutely, So we always take the view of you know,
every everything we do is visible and understandable, and you know,
our clients want us and we're on our client side.
You know, when we do well, they do well.
Speaker 5 (04:44):
Good stuff. Well, congratulations man, that's fantastic. Hey, key, we
savor the minimum default contribution rates moving to three and
a half percent. Well, this is not the final that's
not the final destination, is it. It's just a station
on the way of the destination. Where do you want
to see this head?
Speaker 2 (05:05):
Yeah, Look, we'd love to see this go towards the
Australian number, so up near twelve percent. I think the
positive we have seen as as the parties have started
to reach policies going as the election, there seems to
be some consistency and you know across both sides of
the political spectrum around moving towards a higher contribution rate.
And so look, the three and a half percent is
(05:26):
a start, it's a good start, but we'd love to
see that go further. You know, there's a couple of
other things that we think could happen and could change
within kV Saver and so you know, if we can
see twelve percent being applied as right across the political suits,
rom and people buying into that. Hopefully we'll see the
discussion this election around what are those other things that
can be done around the kV saver?
Speaker 5 (05:45):
What does twelve percent mean? Does that mean six percent
employer six percent employee or.
Speaker 2 (05:49):
Yeah, there's many ways to skin that. But you know
the concept of the employee giving a little bit and
the employee giving a little bit does feel good as well.
You know, there's always that argument that it all comes
out of the employees' pockets because it stimy's wage inflation,
and so arguably.
Speaker 5 (06:06):
These are difficult conversations to have in a way when
you're looking at the pressures that our economy can come under,
isn't it because it's another obligation for employers just have
a bit more money. And actually, actually, how just remind
us how this is being implemented, because is it three
and a half percent and it's from employers, but they
(06:27):
can contract that. So if you get let's just go
with a round figure a thousand bucks a week, the
employer can simply contract and say, right that extra fo
point five zero five percent or point five percent, Sorry,
that's coming out of your wage. Just SU's the employee
who pays it.
Speaker 2 (06:42):
Yeah, look and that's the total rem thing and how
people look at total rem packages. And so, you know,
we think that's one of the changes they need to make.
Speaker 5 (06:50):
They need to change.
Speaker 2 (06:50):
They do need to change how they can be treated.
Speaker 5 (06:53):
So that you can't say, look, we're paying you a
thousand bucks a week and by the way, well, I
guess doesn't it just mean that employers will negotiate, Okay,
your your salary is going to be nine hundred and
such and such a week plus. I mean they just
either way, who's going to pay for it?
Speaker 2 (07:08):
Absolutely? And I think that's why it can't be a
sudden change. You know, we're not talking about going to
a twelve percent number next year. This is about having
a long pathway and a glide path towards higher contributions
over time. You know, once you're at that level and
it's once an embedded part of the wage negotiations each year,
those those are easier conversations to have. But obviously today
talking about going to twelve percent as a very tough
(07:30):
one just from an employee perspective. And you know, obviously
when the economy is in a tough position, it's a
hard one to try put in. But that's why with
the viewers that this should be something that applies over
next ten to fifteen years. So not not straight away.
Speaker 5 (07:42):
Because the conversation is off, off and around, you know,
wanting more people to be in Key. We saber. I
guess look, I'm self employed. I'm in Key. Actually, I'll
be honest. I joined Key We saber because the government
contribution because I thought, well, there's free money going I'd
be an idiot not to put that in. But you know,
when times are tough as a self employed person, you know,
it's probably one of the things you're not turning. You're
(08:04):
not I haven't turned the heat up much on.
Speaker 2 (08:06):
That nook, and that's one of the things that we
think need some work around. KEP Savior. So if you're employed,
it makes sense. You know, you feel like you get
that employer contribution, taking aside that total rem comment earlier,
you know, you feel like the employee county. But if
you're self employed and you're paying both sides, it's your
one pocket. And so you know, we do think you
need to think about how you.
Speaker 5 (08:26):
Need to think. I know what I should be doing, yea, yeah.
Speaker 2 (08:29):
But then the argument for a self employed person is
that you know, investing into your business or into your
employment is actually growing for your retirement and so you
know there are arguments, and so how do you incentivize
self employed people to start saving for retirements?
Speaker 5 (08:41):
Do you think actually, I mean, I know this is
not necessarily the way you're going to be thinking on this,
but you know, we have to pay acc levies for
getting injured. Do you think that there's would be room?
It's difficult with companies, of course, because you have a
contractor you're generally a company, and as for them and revenue,
you're digging into how many people are actually getting the
(09:02):
financial benefit of a company. But do you think that
there would be a case?
Speaker 3 (09:06):
Oh?
Speaker 5 (09:07):
That would be contentious, wouldn't it if you said we're
going to have acc levies which or whatever they are,
and I get my ACC billet at the end of
the year and go how much is there a case
for having that sort of levy on companies for self
employed people as well?
Speaker 2 (09:21):
I mean that is I don't know how you define it,
but that is one way to get there, you know.
But you are back into that original question of whose
decision is it and politically how salible it is?
Speaker 5 (09:31):
Well, actually, the easy way would be that if you
are a contractor and you've taken some drawings from the company,
then that's I confused it At the start, it's way
easier to just say, okay, you've paid your suff a
salary of I don't know.
Speaker 2 (09:43):
Yeah, you're essentially tagging into your income.
Speaker 5 (09:45):
Yeah, tag it, Torre.
Speaker 2 (09:47):
Yeah. I think the other thing that you know, you
have seen changes around the contribution rates from government. So
you talked about the kickstart, you know when you joined
up Originally I'm sure it was a few years ago now, Tim,
but when you joined up it was probably it was.
Speaker 5 (09:59):
Five hundred bucks from me and five hundred bucks from
the government was the minimum. So if you put in
ten bucks.
Speaker 2 (10:04):
A week, you got that five hundred matches or.
Speaker 5 (10:07):
Was it twenty bucks a week. I can't remember what
I put in, but I just I just instantly did
an automatic payment because I thought, well, I'm not even
going to miss that, ye, And then I don't know
what extra I've done on top of that. Actually, to
be fair, but it's no one else's business but mine
to be stressed about it.
Speaker 2 (10:20):
No, But with time that you know that thousand dollars
a year does add up, and so one of the
you know, when we look at the changes that can
be made, you know, we think where those contributions are applied.
You know, something that can be looked at those contributions
being applied much earlier is something that we see some
value in. So you know, that's the key saver at
birth type content. So rather than giving someone five hundred
(10:40):
dollars or one thousand dollars when they turn eighteen, why
not do it when they're born. You get an iod number,
you have a keV saver product, or you have a
Q saver balance, and it helps with your financial literature
as well. You know, you start to get educated around
one investment markets, do what savings means, and hopefully you
see that balance by the time you hit eighteen nineteen
start to grow.
Speaker 5 (10:59):
It is interesting the power of of course this is
an old lesson for finance, isn't it, But the power
of compounding interest. Because when I was working in Australia
musical theater, I was there for I don't know, three
or four years, and I never paid any attention to
any of that because I was automatically done as part
of my contract that there was a certain amount that
went into super and I'm sure it was. I think
(11:19):
the expression is bugger all. But then I got for
some reason, they tracked me down to New Zealand. I
managed to hook up my media super and I got
the statement and okay, it's not a fortune, but I
was surprised at how much it had grown to and
actually the fund managers had done must have had quite
an aggressive fund going. Yeah, I just.
Speaker 2 (11:38):
Time and contributions do help. And so you know, if
you look at qvsaver and if you're going to be
in qusaver for thirty forty years, there's a reasonable chance
to make a significant balance, and you know those savings
have it starting earlier are much more important. And so
you know, we look at it and it's great to
hear that the financial literacy is going to be educated
in schools, but what more can be done to support
that around investment markets and other things. You know, we
(12:00):
do a good job with math. So I was doing
athletics with my daughter this morning and it's not easy.
But actually I don't often get asked questions around finance
or investing, so that doesn't seem to be a part
of her curriculum at the stage.
Speaker 5 (12:11):
Actually, we could throw this for talkback actually because I
reckon that this generation are going to be way more,
way smarter or better informed on money. I was listening
to my daughters, my daughter with a friend of hers
in the back of the car, and it was a
conversation about money, and I thought to myself, Oh, you
guys are not going to have any problems because they
(12:31):
were just so dialed into what they the conversations that
they're being And I think it's because the environment that
they are growing up in is different to the one
where the environment that I grew up in, where parents
often with their work had superannuation sort of things built in.
Speaker 2 (12:47):
And yeah, and I think your access to information is
so much, so much higher than it was when I
was growing up and I grew up down South. You
really only know about jobs that people you know do,
and so you know, your experience or understanding of what
exists in the world was kind of constrained as to
as to who you knew. And you know what your
parents did for jobs, and that's what yourself and see
(13:09):
people go into the careers that their parents did. But
actually with financial literacy, education, with education and the excess
of information on the internet, actually those doors are somewhat
more open, which is great. You know, I think it
is great that the information's out there. You know, you
can learn, you can understand you and there's a lot
of people trying and doing a great job at educating
people around education around so financial literacy. But more can
(13:32):
be done.
Speaker 5 (13:33):
Yeah, I love that expression. You said, I'm from down south.
It's not. I mean it depends. We are in New Zealand. See,
if you're in Auckland you just say from down south.
It's like okay, so that probably means the South Island.
If you're from Nelson and you say from down south,
people think south of christ Church. If you're in christ
Church sent down south with we talk in Dunedin and
the cargo.
Speaker 2 (13:54):
Where are we talking to do?
Speaker 5 (13:57):
That's right? I think I knew that. Now. Just let's
get back into that thing about the scheme being fairer though.
So you know, as we said that employers will simply
just redefine and remuneration packages so that the employee is
paying effectively what the increase is. I mean, there is
(14:17):
there any way around that, because in the end, if
I'm an employer, I'm going to go here's my pot
of money. That I'm going to be able to pay
for this employee. The government's saying I need to have
x percent for super, well, I'm just going to take
that into account, and that's how it's packaged. So the
real take home pay for employees might be slightly impinged.
Is there any way around that having.
Speaker 2 (14:39):
It compulsory so where employers can gain that is by
the wink wink, not not out of the back to say, look,
if you don't ask for QVSAVI contributions, oh you know,
your take home pay will increase because I'm not contributing
and so your salaries are impacted by that. So whereas
if you have a compulsory scheme where everyone's saying for
saving for qubsaver and there's not that option of not
(15:01):
paying contributions for certain staff that remove some of that ability.
Speaker 5 (15:05):
Is there is there a difference in defining There's nowhere
around it in the way you define it. I'm just
remembering all those years ago in Australia that literally my
agent negotiated a fee and it had no reference and
it was around it was a round figure and bingo,
and then I just found out later on it's like,
(15:26):
oh there's a there's an amount that the employer will
be paying to.
Speaker 2 (15:29):
Super and it's just that feed it into the Australian model.
Speaker 5 (15:32):
It's embedded, whereas here it feels like the embedding is
going to be well.
Speaker 2 (15:36):
I think that's the practice change that we need to see.
And so you know, right now you know you have
to ask, so you know you'll go and you'll get
your bonus, you ask your salary and then you know
you actually need to think about it and be smart
enough to know, well, is this inclusive of my QB
saver employee contributions or not? And how does that impede
(15:57):
my Tao bay where's in Australia, it's just on top
of and so you know, if you're getting it, there's
contributions that go on top of that and soya. And
that's just having that consistent practice that applies right across
the economy.
Speaker 5 (16:08):
Okay, we'd love your calls on this because actually just
before you go to the break, so you mentioned also
that the other thing that've got my attention is that
the idea of actually giving it's clicking that motivation for
people to understand what's happening to their money, like starting
kids off with some sort of contribution to their kei
we Savior, even if it's not a regular one, but
(16:28):
just some sort of small lump sum that when they
turn I don't know, they might even just turn thirteen,
and you'll go, guess how much is a new kei
we save it? It started off it I don't know, one
hundred or five hundred bucks, and look how much is
there now? Imagine there is something in that. It's a
great way of learning that lesson I described a compounding interests,
but simply how much was it and how much is
(16:49):
it now? Yeah?
Speaker 2 (16:51):
And it really is. And we've seen that with keysaver
Over the years. New Zonders lover rental property and they
have done and they've had a passion for investment properties
for many years. And when keyy Saver launched, suddenly people
had exposure to investment markets. I remember, fairly early in
my correct Kevsaver journey or working in Kevsaver, I'd often
have the conversation of you know, do you have any
investments And the answer would be no, But I've got Keywisaver,
(17:13):
And so people are starting to understand that investment, that
investment exposure they have gu through Keywisaver is investing in
chair markets, it's investing in bonds. You know what happens
around is impacting on them well, and so you do
get their education.
Speaker 5 (17:25):
That is something that does pops up quite regularly on
this chart. It's like people say, I don't have any investments.
It's like do you have Keysaver, Well, you've got a
stake in this. Would love your cause on that. Actually,
that's an interesting question. Should there be There isn't at
the moment, but should there be some sort of contribution
to a creation of a key We Saber account when
(17:47):
a child is born that they get a lump sum
in there. I don't know how much you'd put in
there because I don't know how many children are born
each year and what it would cost. So that's that's
my statistical lack. But would you support something like that
because it's a great lesson for kids If they find
out they've got a key We Saber account, it's already
got some of one thousand bucks in it because of
the power of compounding interest by the time they're a teenager.
(18:09):
Eight hundred eighty ten and eighty text nine two nine two.
My guest is Chris Wilson. He's the co CEO of
Harbor Asset Management, who won the Morning Stuff Fund Manager
of the Year. I think I got that right, didn't I.
If I got it wrong, you could have just corrected
me and he would have mentioned it again then. Chris. Anyway,
if you'd like to join the conversation, we'd love to
hear from you. Eight hundred and eighty ten eighty. But
(18:31):
we're also going to dig into apart from the conversations
around key we saver and retirement, we're going to dig
it a little bit too, what's happening in the Middle
East there, I say it, and how does it impact
markets and where you put your money or what your
returns are gonna are or aren't going to be. We'll
be back in just a ticket. It's twenty five past
five News Talk s d B News Talk Seed B
(18:51):
with Tim Beveridge and Chris Wilson. He's the co CEO
at Harbor Asset Management. By the way, the other question, Chris,
and I know you haven't necessarily planned to discuss this,
but I had a discussion with some people through a
bunch of connect them with banks and economists and things,
and I've heard that there are some fairly there's some
(19:13):
interesting opinions out there that we really need to deal
with the elephant in the room when it comes to Q.
We savor But it's a retirement age. I mean, I
know it's a it's an old chestnut of a talkback subject,
but what do you think of the arguments around you know,
what we need to do with the retirement age because
I just think it's surely just a fact of life
(19:34):
that it's going to have to move at some stage.
But it's going to take someone who's willing to lose
an election over it. I don't know.
Speaker 2 (19:40):
Yeah, it's always been a very challenging election topic and
you'll see and it's been weaponized against any any party
who's raised it as a as a concept. Look, I
think one really early step if you bring it back
to QV savior that you can make is decauple Q
savior from superannuation age and just take some of the
heat out of it.
Speaker 5 (19:57):
That way, hang on, what is decoupling from the superannuation You.
Speaker 2 (20:00):
Can access your key savior, Yeah, potentially a head of superannuation,
so you no longer say you can only get your
QY saber balance at sixty five for both at the moment.
Speaker 5 (20:11):
Well, that's the other thing is that your employer's obligations
on key we save a stop at sixty five. Is
that something that I'm out of date with. No, that's
true because should you be as long as you're working,
you should be able to, you.
Speaker 2 (20:26):
Know, receive those contributions. And some employers, and I'm sure
we do. We are one of them who will contribute
for employees over sixty five.
Speaker 5 (20:36):
But that's a key.
Speaker 2 (20:37):
But it's a better top.
Speaker 5 (20:38):
That would be something you negotiate or you've just got
a policy on it.
Speaker 4 (20:42):
We do.
Speaker 2 (20:43):
It's the right thing to do.
Speaker 5 (20:44):
So if you work for harber Asset Management, it's like,
don't worry when you're hit, just when you're really hitting
your straps. As a fund advisor, when you're sixty six, mind,
of course, one might say that if you're being a
fund advisor and you've got that amount of experience, you
shouldn't really care about that extra because you should be set,
shouldn't you. That wouldn't it be funny if you're having
(21:04):
a conference with the fund advisor and you're saying, I'm
really worried about my time, and the fund adviser will
be like, yes, I am i'd like next.
Speaker 2 (21:12):
Look, it's a really into one and you're not current role.
But I have had that conversation of you know, what's
the perfect age for an advisor and do you have
to have enough gray hair? Is go to trust you?
But then also clients they say, well, if the fund
advisor is not richer than I am, why would I
take their advice? So seeing both sides of that one.
Speaker 5 (21:30):
Actually it is a funny question. And I know it's
not quite on the topic. Again, I keep saying that,
but it's just a bit of a conversation, but I
wonder how many people are genuinely happy, because, look, you
don't live in a third world country. I'm not on
a third world income, so compared to a people and
a lot of other countries, I'm loaded and I should
be fine, but I'm worried and I look at my
(21:50):
situation and go, well, I'm not going to have what
I want. But when would I be happy with what
I've got. It's an interesting question because if you had
you know, say, if you've got five million bucks in
the bank and you bought a nice house and you
know on the shores of Queenstown, well you've got nothing
left and then you're not happy all of us. So
when are people happy? No?
Speaker 2 (22:08):
And that's you know, comparison is the thief of joy,
as they say. And so as you've just bought your
five million dollar house in queens Down, your neighbors probably
got a ten million dollar the house, and so you
know that can and you find there is that disconnective
wealth versus happiness that comes as well. You know, once
you get obviously through poverty and through basic standard of
living points, having more money at that point doesn't necessarily
(22:30):
make you happier.
Speaker 5 (22:30):
Is that part of the is that a part of
a conversation you have with clients in a way, because
you've got to get to the philosophy of what you
know what they you know what they're after, because as
because you are always chasing that next thing, aren't you.
I mean, it's our property of the week. Last yesterday
was the ultimate fantasy hum in Queenstown. And I couldn't
(22:51):
begin to guess what it was worth. They had to
be twenty or thirty million. And so someone who's just
won powerball they got fifteen if they had fifteen millions,
say they can't even buy half that? And so do you?
Is that one of the challenges of managers is just
working out who your clients really are and what they
need or what they think they need. Yeah.
Speaker 2 (23:12):
Look, and one of the things you often see is
people worry about do they have enough and how that
normally presents, you know, a client and a Klind conversation.
It's not something we Harvest specializes, but you know, from
our experience I'm able to touch on it briefly. Is
just around people worrying that they're going to run out
and so you know, a good advice conversation will normally
(23:32):
help them understand actually what they can do.
Speaker 5 (23:34):
Of course, I mean you're specifically fun manager. Yeah, we've
got a macro sort of point of view. I got
distracted there with my own genius. Let's get on to
the Middle East day. I've sort of was putting it
off too because it seems to be in the headlines.
But anyway, currently what's happening in the Middle East. We
see what's happening in the headlines. You've got to be
(23:55):
keeping the up to date news feed. But where are
we at and it's impact on markets now with and
we're talking around obviously and yeah.
Speaker 2 (24:05):
Absolutely having an impact. You've just seen the volatively leveled spike.
You've seen a real flight to safety. But then the
impact of oil and the impact of the closing of
the strait of from Mars is just a really interesting
dynamic and the potential impact that has and flows through
you know, Trump, I think today calling for other nations
to send ships and to protect the straight. Yeah, I'm
(24:26):
not sure like you, but I've seen many, many pictures
of canals and various other ways of mad Max type
approaches of getting oil across through Dubai cutting off the straight.
Speaker 5 (24:39):
Well, there are other things, but when we're talking about
twenty percent of the world's all supply.
Speaker 2 (24:44):
I'm not going to solve the problem, and that has
downstream impacts, and you're seeing it geopolitically, you know, I
think both the producers and the refiners now saying actually
they're potentially going to stop sending exporting refining products away
to protect their own industries. You know, the potential slow
down on growth that applies. But then it's that interesting
(25:06):
dynamic of the potential inflation shock as well. So you know,
often you'll see with a slow economy and expectation of
rates cuts, a flight to safety and interest rates going down.
What we're seeing is actually risk of rates going up
because of an inflationary shot from oil prices rising.
Speaker 5 (25:21):
Actually this is quite recent. I think I opened the
my news feed this morning and I saw something where
Trump is there's something about worrying about, you know, the
up and downing of the oil price according to whatever
announcements are made, and somebody is threatening a catastrophe economically
of biblical proportions of people lose faith in the oil market.
(25:42):
Have you caught up with that sort of.
Speaker 2 (25:45):
You know, I haven't, But look, I mean the oil
market and Trump is really important, you know, going into
use an election, the impact on oil and fuel prices
in the States is huge. The impact on potential growth
is as huge as they go into election, and so
you know, as the big thing we're really as being
discussed in markets, and what we're seeing is things move
up and down. How long does this last? And how
(26:07):
long how long does the conflict last and around all
the situation Iran as you referred to it earlier. You know,
an extended period will have a really strong impact domestically
for Trump and the US.
Speaker 5 (26:17):
Because I think it was something about if people I
didn't go into it in too much detail, but it
was if people lose faith in the oil market, and
I was thinking, I don't know how you'd ever lose
faith in your market. There's always it just would become
volatile and less predictable. That would be about it, wouldn't it.
But I mean, it's not something where people are going
to lose faith and investing in oil because we love
(26:39):
oil imaging and the stats on the million, you know,
hundreds of million dollars a barrel that the world needs
per day or whatever.
Speaker 2 (26:45):
It's Yeah, until there's replacements for that, it is still
required to produce the things that we consume and move
the things that we consume around the world. And so
you know, not having oil just mean to slow down.
And so you started to see that as it flows.
Since you's eoned, I think like you, I'm sure you've
seen like me. I'm sure you've seen the petrol stations
(27:07):
running out of fuel. You people rushing to think well,
I had.
Speaker 5 (27:10):
Very cross Shane Jones, who was very unhappy with Gull
the news that they'd run out or something. But I
think the truth someway Land in the middle that maybe
a station had run dry and Gull had said, look,
we've got plenty. I haven't caught up with that yet.
Speaker 2 (27:24):
It was just yeah, no, I think that's right. I
think but again, it's a bit like the toilet paper
during COVID, you know, the fear of not having forces,
the rush of people moving to the station and stocking
up much faster.
Speaker 5 (27:36):
What's your reaction to it? Just as someone, I mean
because you know, obviously in your role you keep you
guys keep a closey on these things. Do you also
have just a human emotional reaction of whether you're worried
or not or are you quite circumspect on this? It's like, ah, well.
Speaker 2 (27:49):
You know, I mean absolutely, And looks that's the first thing.
You know, we sometimes come across as a bit cold
because the first question that people ask us as always well,
what's the impact on make you you save a balance?
Or what does this mean for financial markets? And you know,
we don't often get asked about that, the actual human impact,
and you know the challenge that this has, and you
know it is it's a tragedy. You know, we're in
(28:10):
a world now where you know, there's a lot of
people and there's a lot of expats in Dubai. You know,
through the Middle East who are now very unsafe. You know,
there's people's travels, plans impacted, people aren't getting to and
from you know, Europe, people are stuck in New Zealand.
There's the sort of emotional impact and obviously that the
amount of death that's occurring through the region is just
an absolute tragedy.
Speaker 5 (28:30):
And I was just thinking in terms of also the
economic impact when you look at markets, because you know
you you mentioned that such and such, this would be
interesting in terms of what's happening. I mean, do you
are you worried about New Zealand's Are you worried currently
or are you thinking, well, tell you what, just don't
look at your key we saber right now. But where
(28:53):
are you in terms of long term short term concern Yeah?
Speaker 2 (28:56):
Look, and that's I think the right way to think
about it. There's long terms concerns and short term concerns,
and so you know, I think in twenty years time
whether they be looking back and thinking you'll get the
wrong But the fifteenth of March I was very very
worried about oil prices and what that was going to
do to my kevsavor balance. In twenty years time, I
don't think so.
Speaker 5 (29:14):
I don't think. To be honest, I mean, I'm on
a slightly more aggressive fund. I'm not going to look
at it and look, it's not a huge amount of
money anyway, but I'm not planning on withdrawing that money
for you know, years and years. So I'm just it's
just there. Forget it, don't even look.
Speaker 2 (29:31):
No, that's right, and certainly if you're an individual thinking
keeps over that's the right thing to do is not
panic in situations like this and tried better judge the markets.
From an investment professional side, absolutely, we're really focused on
the short term impacts and where we see that going.
The growth impact on the New Zealand economy, you know,
how we see that playing out into individual stocks. You know,
(29:51):
if you look at the New Zealand, it's a good example.
You know, oil and prices and they've already announced that
they may need to cancel a number of flights going forward.
You know, those things have an impact and they have
an impact on the outlook for the company, so we
have to factor that it is the short term, but
longer term you know, again, these things, unless it's a
very prolonged piece, it's something that gets worked through.
Speaker 5 (30:11):
Hey all, we have to take a break. I've got
lots more questions for you, but we'll come back and
just to take if you'd like to ask any any
questions of Chris. Chris Wilson from Harbor Asset Management. We're
talking about a bit about key we Savor, which we
had a chat about. We've managed to mingle the two
in with the conversation around what's going on with the run.
But if you got any questions for Chris's reckons, then
(30:31):
give us a call eight hundred and eighty ten eighty,
but we'll be back in a ticke. It's twenty to six. Yes,
that is Harbor Asset Management, who are fund Manager of
the Year with the morning Star Awards, and Chris Wilson's
with us actually, and we're talking about the Middle East
and the conflict and the effect it has on markets. Chris,
it seems, you know, back in the days when there
have been either global oil shocks or market shops, it
(30:54):
does feel naively to me that it used to be
very much in what in the eighties, remember the equity
corp days, and it was a wild West, and so
when the market lost, you know, I had confidence lost
in it. Everything just was carnage. I have this, maybe
it's a naive hope, but that things just feel at
least more measured and better informed these days than there
(31:16):
I've ever been in that there's maybe a bit of
circumspection when it comes to market reactions that we don't
see the sort of you know, I mean back in
Wall Street, the stomach crash in nineteen whatever it was.
You know, is there a different sort of space where
we deal with bad news in a more measured way
or can it be just as dramatic.
Speaker 2 (31:36):
I think it can be just as dramatic. Unfortunately, I
think you know the animals of time and maybe softened
that one for you. But if you think it's similar
to your comment around, you know, will you be looking
back five years from now remembering the state you know,
you think of all of the incidents or severe drops
we've had since you know, nineteen eighty seven, the you
think of the drop during COVID, of March of COVID,
there was a huge drawback in markets, which quickly rebounded
(31:59):
and so that time disappeared. But you know, I think
last week on Monday, we had a three percent downaday inded.
Speaker 5 (32:05):
X, which so that's a fall of greater than three percent,
and that's happened how many times, I.
Speaker 2 (32:11):
Think about ten times in the last last fifteen years
or so. So yeah, again, that is a big day.
And you know that that doesn't it has rebounded back
and so you do get some normalization. But those those
swings can happen, and you've seen it even in the
months prior ahead of the situation are on you referred
to as the Saskov polips, where companies that are impacted
(32:32):
by AI would just industries would just see large swings
in a day as a research paper or a piece
of information came out around that sector which took which
created just a very different view on the performance.
Speaker 5 (32:44):
How does it because the bond markets, which are seen
as being a bit more of a I don't know,
if you've bought a few bonds, you'd like to think
you're a bit safe than the average beer, wouldn't you.
But they don't like the oil oil shocks, do they know?
Speaker 2 (32:55):
And they don't they haven't that inflationary impact, and so
the bond markets and that sees rate rise and you know,
obviously bonds are the funny one where the interest rates
go up and price go down, and so that is
a worry that the Fed and Reserve banks will we
need to do things to stop inflation. So that infation,
the price of oil goes up, the price of things
that you buy goes up, inflationary shock, and so then
(33:18):
how do you damp inflation. You've got a toolbox which
is pretty limited. You raise interestraight, and so yeah, I
think that's an interesting dynamic, but it is a limited
toolbox that they're it does it does feel strange.
Speaker 5 (33:32):
You know that we can have inflation and all that
sort of thing, and what we do is I probably
need to have a chat with an abreament about this,
actually pick of brains, But you know that you put
the cash rate up to deal with inflation. When I
sometimes wonder how much inflation has an effect on inflation
because people are having to button back and what they spent,
(33:53):
you know what I mean. So you've made You've made
renting and more, you know, owning a house or borrowing
more expensive, and it's put the cost of things up,
whereas inflation is already putting those things up. I don't
understand how that works. But is that a dumb question?
Speaker 2 (34:10):
It is not a dumb question, and it's been well studied,
it's and so inflation expectations do drive inflation. And so
you know, if you think of wage inflation, if I'm thinking, well,
prices are going up, I need you to pay me
more because you know, I have an expectation price can
you go up? So I want you to pay me
five percent more this year.
Speaker 5 (34:30):
And so like a dog chasing its tail, and that
then has.
Speaker 2 (34:33):
Put more inflation. And so as you get confidence and inflation
is not going up. Actually, if I've got confidence that
prices aren't going up as much, then my wage inflation
will come down. And so it does reduce. And so
that's the challenge out that doctor Breman.
Speaker 5 (34:45):
Has is does are there different I mean, this is
getting into economist territoryily, isn't it? Isn't it? You give
me that lock at time?
Speaker 2 (34:53):
I turn, that's a lot that you're going to a
good place. We should we should follow it down.
Speaker 5 (34:56):
No, But yeah, I mean are there situations where because
they talk about tradeable inflation, non tradable and all that,
but are there types of inflation where it's sort of
self curing, like it's a bit I would relate it
to you get a virus and your body forms antibodies
to that virus and you can sort of heal yourself
and ultimately all for the next time. Are there types
(35:16):
of inflation where you wouldn't necessarily see intervention from the
Reserve Bank because this is sort of self curing.
Speaker 2 (35:24):
Yeah, I think yes, I mean short aunt. Yes, the
different types of inflation aren't treated differently by the Reserve
Bank and how they think about it. So you know,
absolutely some things and the length and duration of impacts
has a been so again a short short, a short shock.
So you know, say a change in attacks that adds
one percent of the price or gest change.
Speaker 5 (35:44):
They will look nothing to see.
Speaker 2 (35:45):
Because it's you know, it's a one off iverything, and
one off in the sense of it just lifts all
the prices immediately and then they stay at the new level.
Whereas if you think of, say something that all shock,
it's actually not just the increase in price on that day,
it's the potential ongoing growth. It's the potential other impacts
that flow through as well.
Speaker 5 (36:02):
So do we understand everything that's happening with the oil prices,
because we did see some strange fluctuations based on Trump's rhetoric.
What was it seventy three bucks a barrel just prior
to the conflict. Then it went up to one hundred
and fifteen bucks, and I think I saw it dropped
back to ninety dollars after Trump said something, Ye, what is.
Speaker 2 (36:22):
And possibly pop back up again. And really it's about
how they deal with production and who's producing oil, and
then the release of strategic reserves as well. So what oil?
Speaker 5 (36:31):
Is there? A vain which Shane Jones was talking about.
Speaker 2 (36:34):
Yeah, cetera ability to release reserves and yeah, you've seen
our rhetoric around that. And so again the trade off
is how long does the strait stay closed for? How
long does it take for oil production and essentially oil
to start flowing around the world again versus how much
of that shortfall and the time it takes for that
to happen is that covered by strategic reserves that are
released by the UNUS and other.
Speaker 5 (36:56):
Country People will investors bet on this sort of stuff?
I mean, I mean the risk of the ones who
aren't too risk averse would be like, well, Okay, it's
got up to one hundred and twenty bucks a barrel,
I'm gonna I don't invest on what is it? Short?
The stock or something and bet that it's going to
be down at ninety dollars in about ten days time.
Speaker 2 (37:13):
Absolutely, absolutely, and so you know it's as you've seen
the price movement. Investors will try to predict anything that's
moving a lot of value because that's where you can
make money.
Speaker 5 (37:23):
And if you worked in the White House, you just
hear what Trump Trump says, I'm gonna I'm going to
make an announcement to call the markets quick shots. I mean,
I hate to think that happens.
Speaker 2 (37:31):
But no, I mean you've suddenly seen that with prediction markets. Yeah,
I'm sure we would have seen people betting on community
no longer being in power was the most recent controversy.
Someone made bets on Manjuro coming out of power, and
one money on prediction markets. And so there's been a
lot of talking to media around the role of prediction
markets and the use of inside information to make money
(37:53):
out of world events.
Speaker 5 (37:54):
Gosh, we'll be back on a tech It's fascinating conversation
though all this ten to six news talks. The'd be Yes,
welcome back to smart Money. I'm Tim Beverage. My guest
is Chris Wilson, Harbor Asset Management, and look, we've just
got a couple of minutes to go. And look, we've
been talking about a bit of bat kep we save.
But of course the conversation around investings to do with
what's going on and run and oil shocks and the
(38:15):
price of all and all that sort of thing, and
it does tend to leave us all with a slight
sense of anxiety. And we've seen panic buying. I thought
maybe if you've got a final sort of take on,
you know, putting things in perspective.
Speaker 2 (38:29):
Yeah, Look, and I think I'll come back to your
earlier comments, you know, think about this. Is this something
in five years time you'll you'll think back and worry
about or remember you know, this event or the circumstance.
There's a very high chance you won't. And look, you
know it's important to not panic in these situations. You know, absolutely,
check you check your fund, seek advice from your advisor
(38:50):
or from your your provider if you can, but don't panic.
You will you will see through this stuff over time.
And there's been there's been incidents, there's been incidents in
the past. And look, we do spend a lot of
time thinking about these We spend a lot of time
talking about these things. That's what we're paid to do
an investor. You should you shouldn't spend too much time
worrying about this.
Speaker 5 (39:09):
Actually you said check your fund. Is there is there
a school of thought to say maybe don't? I mean
how because you guys it's yeah, I mean how does
that work?
Speaker 2 (39:19):
Well, check your fund not in the context of check
your balance and worry about your balance. Okay, check you're
in the right fund for what you're trying to do,
as opposed to check your balance every day to see
what's happening with oil and see the impact on your funds.
Speaker 5 (39:32):
So, of course, with the key we say, as I said,
because we've heard this advice time and time again, if
there's a if there's a market price shock and you're
in an aggressive fund, it's not the time to jump
into a conservative fund because you just lock in the lost. Yeah.
Speaker 2 (39:47):
No, that's it's sort of pretty general advice around it
as well. Yeah, it's not trying to react to market
events or pick one that when the right time to
change funds to tie market events is not the best out.
Speaker 5 (40:01):
Just some context on the three you know, the three
percent drop that we had in our market in the
past week on one day, I think, wasn't it? Yep?
What is that comparable to comparable to other markets around
the world, will be better, worse or you know the
DAL the S and P fifty, all that sort.
Speaker 2 (40:17):
Of very comparable. This is a this is a certainly
global event. Everyone uses oil. Everyone's aware of us going
on in the US, and what happens in US markets
does tend to drive global markets.
Speaker 5 (40:28):
Feel slightly consoling, isn't it. I mean if we were
the only market that we're going then that would feel
very lonely.
Speaker 2 (40:34):
Yeah.
Speaker 5 (40:35):
Absolutely.
Speaker 2 (40:36):
It was always the food and mouth disease sort of
issue in New Zealand. Was the UK study we used
to do at University of what would happen to a
fud and mouth case at New Zealand years and years
ago and the impact on the economy. But no, this
is this is certainly a global issue that everyone's feeling
at the moment.
Speaker 5 (40:50):
All good stuff. Hey, Hey, thanks so much for coming in. Chris,
good to see you and all of this. All the
show will be online after six o'clock. You'll be able
to jump on and check out any of the hours
we've had. Been a great show. Thanks everyone for their
participation thanks to my producer Tira Ward. Enjoy the rest
of your evening. We'll catch your same time next weekend.
Have a great night.
Speaker 3 (41:11):
Sing it with you before.
Speaker 1 (41:25):
For more from the Weekend Collective, listen live to News
Talk sed BE weekends from three pm, or follow the
podcast on iHeartRadio.
You're listening to the Weekend Collective podcast from News Talks,
it'd be.
Speaker 2 (00:15):
Pretty little.
Speaker 3 (00:18):
Because you said, I'm just right, I'm just my, I'm
just my, I just.
Speaker 4 (00:33):
B I just write first, I'll just say that your
face got me so cheat.
Speaker 5 (00:45):
I'm so intrigued.
Speaker 3 (00:48):
What good is beauty if your body gets finn.
Speaker 2 (00:53):
I don't want to know?
Speaker 5 (00:55):
So please, Yes, welcome back to the Weekend Collective. I'm
Tim Beveridge. If you have just joined us, and this
is smart Money where we talk I said last last day,
I say we talk about all things to do with money,
but of course we don't talk about everything to do
with money. In the show. We usually have a couple
of focal points and we are going to have a
bit of a chat. There's big world's Big changes is
(01:17):
happening in the world of finance at the moment. For
Kiwi's the Kiwis Savior, changes are coming very soon and
from April the first, the minimum default contribution rate is
going to move up to three and a half percent.
We're also seeing that, so that's one thing we're going
to talk about. We're also seeing unavoidable impacts of markets
as a result of Yes, Yes, the war, despite where
(01:38):
they want of people on to call it a war
or not. In the Middle East, the whole situation with Iran,
that's what we'll call it. We'll call it the situation
with Iran. But we're going to get into the ti
Wei Saver side of things first anyway, and maybe have
a chat about how the war has impacted on your
investment habits or decisions or you know, everything you do.
(02:00):
Because by the way, if you're thinking of changing to
a more conservative fund because trouble's broken out, you too late.
You need you need to know when the trouble's coming.
You need to be a soothsayer or a fortune teller
and guests and then you'll be all right. But if
you're responding to bad news, it's too late. But anyway,
we want your participation as well.
Speaker 4 (02:16):
On No.
Speaker 5 (02:17):
Eight hundred eighty ten eighty or text nine two nine two.
And now our guest. He is the co CEO of
Harbor Asset Management and he's with us here for smart
Money and his name is Chris Wilson. And actually Chris,
but just to get things rolling, You've got a little
bit of good news from the harbor Asset, haven't you.
Speaker 2 (02:37):
Yeah, thanks, Tim, Thanks for opening with that. No, we
were really stoked to win the Fund Manager of the
Year award overall Fund Manager of the Year for morning
Star for the second year in row, just in the
last week or two. So it's been a big week
for the business.
Speaker 4 (02:48):
Wow.
Speaker 2 (02:49):
Excited.
Speaker 5 (02:50):
Wow is there a lot of How many people are
sort of would consider themselves up for that award?
Speaker 1 (02:55):
Oh?
Speaker 2 (02:56):
Look, I think most people in the investment industry, So
you think of those keysaver advisers, people who manage money professionally.
It's taken out of that pool. So you know, within
the industry something we look towards. I think the man
on the street may not have heard of it as much,
but it's aptly proud.
Speaker 5 (03:10):
Of how and why did you win? This is the
time to look.
Speaker 2 (03:17):
It's it's one of those things. I think it's a
we've got a great team at depth right across the
different massive classes that we manage, and that consistent team
and discipline and investment discipline behind what we do really
comes through. And you know, obviously in some strong returns
helps and yeah, actually recondition is it?
Speaker 5 (03:35):
Does it just done on? You guys have nailed the returns,
you know, like the line muffets.
Speaker 2 (03:38):
Of not just that, not just that. So no, look,
it does, it does have an impact, but it's not
the sole soule driver. They are looking for consistency over
over longer periods of time rather than just one year's
worth of returns just.
Speaker 5 (03:50):
Out of curiosity with Harbors set. I mean you, guys,
we speak to you regularly on the show the when
you when you have a team of invest investors and
you are running a company like you do. I hate
the expression mission statement because it's such a core thing,
but there would be a mission sort of statement as
to how you would define the way you do your job.
(04:11):
What's what's this?
Speaker 2 (04:12):
Yeah, we're most trusted to be the most trusted investment
manager in New Zealand and that's that's what we seek
to do for our clients all the time. So yeah,
we want people to feel comfort and feel trust that
we're doing the right thing for them to times.
Speaker 5 (04:25):
That's really quite a good one, isn't it, Because whenever
you come up with a decision and you've got some
to think about and you just remember, well, does this
feed into us being well trusted or not? Yeah?
Speaker 2 (04:34):
Absolutely, So we always take the view of you know,
every everything we do is visible and understandable, and you know,
our clients want us and we're on our client side.
You know, when we do well, they do well.
Speaker 5 (04:44):
Good stuff. Well, congratulations man, that's fantastic. Hey, key, we
savor the minimum default contribution rates moving to three and
a half percent. Well, this is not the final that's
not the final destination, is it. It's just a station
on the way of the destination. Where do you want
to see this head?
Speaker 2 (05:05):
Yeah, Look, we'd love to see this go towards the
Australian number, so up near twelve percent. I think the
positive we have seen as as the parties have started
to reach policies going as the election, there seems to
be some consistency and you know across both sides of
the political spectrum around moving towards a higher contribution rate.
And so look, the three and a half percent is
(05:26):
a start, it's a good start, but we'd love to
see that go further. You know, there's a couple of
other things that we think could happen and could change
within kV Saver and so you know, if we can
see twelve percent being applied as right across the political suits,
rom and people buying into that. Hopefully we'll see the
discussion this election around what are those other things that
can be done around the kV saver?
Speaker 5 (05:45):
What does twelve percent mean? Does that mean six percent
employer six percent employee or.
Speaker 2 (05:49):
Yeah, there's many ways to skin that. But you know
the concept of the employee giving a little bit and
the employee giving a little bit does feel good as well.
You know, there's always that argument that it all comes
out of the employees' pockets because it stimy's wage inflation,
and so arguably.
Speaker 5 (06:06):
These are difficult conversations to have in a way when
you're looking at the pressures that our economy can come under,
isn't it because it's another obligation for employers just have
a bit more money. And actually, actually, how just remind
us how this is being implemented, because is it three
and a half percent and it's from employers, but they
(06:27):
can contract that. So if you get let's just go
with a round figure a thousand bucks a week, the
employer can simply contract and say, right that extra fo
point five zero five percent or point five percent, Sorry,
that's coming out of your wage. Just SU's the employee
who pays it.
Speaker 2 (06:42):
Yeah, look and that's the total rem thing and how
people look at total rem packages. And so, you know,
we think that's one of the changes they need to make.
Speaker 5 (06:50):
They need to change.
Speaker 2 (06:50):
They do need to change how they can be treated.
Speaker 5 (06:53):
So that you can't say, look, we're paying you a
thousand bucks a week and by the way, well, I
guess doesn't it just mean that employers will negotiate, Okay,
your your salary is going to be nine hundred and
such and such a week plus. I mean they just
either way, who's going to pay for it?
Speaker 2 (07:08):
Absolutely? And I think that's why it can't be a
sudden change. You know, we're not talking about going to
a twelve percent number next year. This is about having
a long pathway and a glide path towards higher contributions
over time. You know, once you're at that level and
it's once an embedded part of the wage negotiations each year,
those those are easier conversations to have. But obviously today
talking about going to twelve percent as a very tough
(07:30):
one just from an employee perspective. And you know, obviously
when the economy is in a tough position, it's a
hard one to try put in. But that's why with
the viewers that this should be something that applies over
next ten to fifteen years. So not not straight away.
Speaker 5 (07:42):
Because the conversation is off, off and around, you know,
wanting more people to be in Key. We saber. I
guess look, I'm self employed. I'm in Key. Actually, I'll
be honest. I joined Key We saber because the government
contribution because I thought, well, there's free money going I'd
be an idiot not to put that in. But you know,
when times are tough as a self employed person, you know,
it's probably one of the things you're not turning. You're
(08:04):
not I haven't turned the heat up much on.
Speaker 2 (08:06):
That nook, and that's one of the things that we
think need some work around. KEP Savior. So if you're employed,
it makes sense. You know, you feel like you get
that employer contribution, taking aside that total rem comment earlier,
you know, you feel like the employee county. But if
you're self employed and you're paying both sides, it's your
one pocket. And so you know, we do think you
need to think about how you.
Speaker 5 (08:26):
Need to think. I know what I should be doing, yea, yeah.
Speaker 2 (08:29):
But then the argument for a self employed person is
that you know, investing into your business or into your
employment is actually growing for your retirement and so you
know there are arguments, and so how do you incentivize
self employed people to start saving for retirements?
Speaker 5 (08:41):
Do you think actually, I mean, I know this is
not necessarily the way you're going to be thinking on this,
but you know, we have to pay acc levies for
getting injured. Do you think that there's would be room?
It's difficult with companies, of course, because you have a
contractor you're generally a company, and as for them and revenue,
you're digging into how many people are actually getting the
(09:02):
financial benefit of a company. But do you think that
there would be a case?
Speaker 3 (09:06):
Oh?
Speaker 5 (09:07):
That would be contentious, wouldn't it if you said we're
going to have acc levies which or whatever they are,
and I get my ACC billet at the end of
the year and go how much is there a case
for having that sort of levy on companies for self
employed people as well?
Speaker 2 (09:21):
I mean that is I don't know how you define it,
but that is one way to get there, you know.
But you are back into that original question of whose
decision is it and politically how salible it is?
Speaker 5 (09:31):
Well, actually, the easy way would be that if you
are a contractor and you've taken some drawings from the company,
then that's I confused it At the start, it's way
easier to just say, okay, you've paid your suff a
salary of I don't know.
Speaker 2 (09:43):
Yeah, you're essentially tagging into your income.
Speaker 5 (09:45):
Yeah, tag it, Torre.
Speaker 2 (09:47):
Yeah. I think the other thing that you know, you
have seen changes around the contribution rates from government. So
you talked about the kickstart, you know when you joined
up Originally I'm sure it was a few years ago now, Tim,
but when you joined up it was probably it was.
Speaker 5 (09:59):
Five hundred bucks from me and five hundred bucks from
the government was the minimum. So if you put in
ten bucks.
Speaker 2 (10:04):
A week, you got that five hundred matches or.
Speaker 5 (10:07):
Was it twenty bucks a week. I can't remember what
I put in, but I just I just instantly did
an automatic payment because I thought, well, I'm not even
going to miss that, ye, And then I don't know
what extra I've done on top of that. Actually, to
be fair, but it's no one else's business but mine
to be stressed about it.
Speaker 2 (10:20):
No, But with time that you know that thousand dollars
a year does add up, and so one of the
you know, when we look at the changes that can
be made, you know, we think where those contributions are applied.
You know, something that can be looked at those contributions
being applied much earlier is something that we see some
value in. So you know, that's the key saver at
birth type content. So rather than giving someone five hundred
(10:40):
dollars or one thousand dollars when they turn eighteen, why
not do it when they're born. You get an iod number,
you have a keV saver product, or you have a
Q saver balance, and it helps with your financial literature
as well. You know, you start to get educated around
one investment markets, do what savings means, and hopefully you
see that balance by the time you hit eighteen nineteen
start to grow.
Speaker 5 (10:59):
It is interesting the power of of course this is
an old lesson for finance, isn't it, But the power
of compounding interest. Because when I was working in Australia
musical theater, I was there for I don't know, three
or four years, and I never paid any attention to
any of that because I was automatically done as part
of my contract that there was a certain amount that
went into super and I'm sure it was. I think
(11:19):
the expression is bugger all. But then I got for
some reason, they tracked me down to New Zealand. I
managed to hook up my media super and I got
the statement and okay, it's not a fortune, but I
was surprised at how much it had grown to and
actually the fund managers had done must have had quite
an aggressive fund going. Yeah, I just.
Speaker 2 (11:38):
Time and contributions do help. And so you know, if
you look at qvsaver and if you're going to be
in qusaver for thirty forty years, there's a reasonable chance
to make a significant balance, and you know those savings
have it starting earlier are much more important. And so
you know, we look at it and it's great to
hear that the financial literacy is going to be educated
in schools, but what more can be done to support
that around investment markets and other things. You know, we
(12:00):
do a good job with math. So I was doing
athletics with my daughter this morning and it's not easy.
But actually I don't often get asked questions around finance
or investing, so that doesn't seem to be a part
of her curriculum at the stage.
Speaker 5 (12:11):
Actually, we could throw this for talkback actually because I
reckon that this generation are going to be way more,
way smarter or better informed on money. I was listening
to my daughters, my daughter with a friend of hers
in the back of the car, and it was a
conversation about money, and I thought to myself, Oh, you
guys are not going to have any problems because they
(12:31):
were just so dialed into what they the conversations that
they're being And I think it's because the environment that
they are growing up in is different to the one
where the environment that I grew up in, where parents
often with their work had superannuation sort of things built in.
Speaker 2 (12:47):
And yeah, and I think your access to information is
so much, so much higher than it was when I
was growing up and I grew up down South. You
really only know about jobs that people you know do,
and so you know, your experience or understanding of what
exists in the world was kind of constrained as to
as to who you knew. And you know what your
parents did for jobs, and that's what yourself and see
(13:09):
people go into the careers that their parents did. But
actually with financial literacy, education, with education and the excess
of information on the internet, actually those doors are somewhat
more open, which is great. You know, I think it
is great that the information's out there. You know, you
can learn, you can understand you and there's a lot
of people trying and doing a great job at educating
people around education around so financial literacy. But more can
(13:32):
be done.
Speaker 5 (13:33):
Yeah, I love that expression. You said, I'm from down south.
It's not. I mean it depends. We are in New Zealand. See,
if you're in Auckland you just say from down south.
It's like okay, so that probably means the South Island.
If you're from Nelson and you say from down south,
people think south of christ Church. If you're in christ
Church sent down south with we talk in Dunedin and
the cargo.
Speaker 2 (13:54):
Where are we talking to do?
Speaker 5 (13:57):
That's right? I think I knew that. Now. Just let's
get back into that thing about the scheme being fairer though.
So you know, as we said that employers will simply
just redefine and remuneration packages so that the employee is
paying effectively what the increase is. I mean, there is
(14:17):
there any way around that, because in the end, if
I'm an employer, I'm going to go here's my pot
of money. That I'm going to be able to pay
for this employee. The government's saying I need to have
x percent for super, well, I'm just going to take
that into account, and that's how it's packaged. So the
real take home pay for employees might be slightly impinged.
Is there any way around that having.
Speaker 2 (14:39):
It compulsory so where employers can gain that is by
the wink wink, not not out of the back to say, look,
if you don't ask for QVSAVI contributions, oh you know,
your take home pay will increase because I'm not contributing
and so your salaries are impacted by that. So whereas
if you have a compulsory scheme where everyone's saying for
saving for qubsaver and there's not that option of not
(15:01):
paying contributions for certain staff that remove some of that ability.
Speaker 5 (15:05):
Is there is there a difference in defining There's nowhere
around it in the way you define it. I'm just
remembering all those years ago in Australia that literally my
agent negotiated a fee and it had no reference and
it was around it was a round figure and bingo,
and then I just found out later on it's like,
(15:26):
oh there's a there's an amount that the employer will
be paying to.
Speaker 2 (15:29):
Super and it's just that feed it into the Australian model.
Speaker 5 (15:32):
It's embedded, whereas here it feels like the embedding is
going to be well.
Speaker 2 (15:36):
I think that's the practice change that we need to see.
And so you know, right now you know you have
to ask, so you know you'll go and you'll get
your bonus, you ask your salary and then you know
you actually need to think about it and be smart
enough to know, well, is this inclusive of my QB
saver employee contributions or not? And how does that impede
(15:57):
my Tao bay where's in Australia, it's just on top
of and so you know, if you're getting it, there's
contributions that go on top of that and soya. And
that's just having that consistent practice that applies right across
the economy.
Speaker 5 (16:08):
Okay, we'd love your calls on this because actually just
before you go to the break, so you mentioned also
that the other thing that've got my attention is that
the idea of actually giving it's clicking that motivation for
people to understand what's happening to their money, like starting
kids off with some sort of contribution to their kei
we Savior, even if it's not a regular one, but
(16:28):
just some sort of small lump sum that when they
turn I don't know, they might even just turn thirteen,
and you'll go, guess how much is a new kei
we save it? It started off it I don't know, one
hundred or five hundred bucks, and look how much is
there now? Imagine there is something in that. It's a
great way of learning that lesson I described a compounding interests,
but simply how much was it and how much is
(16:49):
it now? Yeah?
Speaker 2 (16:51):
And it really is. And we've seen that with keysaver
Over the years. New Zonders lover rental property and they
have done and they've had a passion for investment properties
for many years. And when keyy Saver launched, suddenly people
had exposure to investment markets. I remember, fairly early in
my correct Kevsaver journey or working in Kevsaver, I'd often
have the conversation of you know, do you have any
investments And the answer would be no, But I've got Keywisaver,
(17:13):
And so people are starting to understand that investment, that
investment exposure they have gu through Keywisaver is investing in
chair markets, it's investing in bonds. You know what happens
around is impacting on them well, and so you do
get their education.
Speaker 5 (17:25):
That is something that does pops up quite regularly on
this chart. It's like people say, I don't have any investments.
It's like do you have Keysaver, Well, you've got a
stake in this. Would love your cause on that. Actually,
that's an interesting question. Should there be There isn't at
the moment, but should there be some sort of contribution
to a creation of a key We Saber account when
(17:47):
a child is born that they get a lump sum
in there. I don't know how much you'd put in
there because I don't know how many children are born
each year and what it would cost. So that's that's
my statistical lack. But would you support something like that
because it's a great lesson for kids If they find
out they've got a key We Saber account, it's already
got some of one thousand bucks in it because of
the power of compounding interest by the time they're a teenager.
(18:09):
Eight hundred eighty ten and eighty text nine two nine two.
My guest is Chris Wilson. He's the co CEO of
Harbor Asset Management, who won the Morning Stuff Fund Manager
of the Year. I think I got that right, didn't I.
If I got it wrong, you could have just corrected
me and he would have mentioned it again then. Chris. Anyway,
if you'd like to join the conversation, we'd love to
hear from you. Eight hundred and eighty ten eighty. But
(18:31):
we're also going to dig into apart from the conversations
around key we saver and retirement, we're going to dig
it a little bit too, what's happening in the Middle
East there, I say it, and how does it impact
markets and where you put your money or what your
returns are gonna are or aren't going to be. We'll
be back in just a ticket. It's twenty five past
five News Talk s d B News Talk Seed B
(18:51):
with Tim Beveridge and Chris Wilson. He's the co CEO
at Harbor Asset Management. By the way, the other question, Chris,
and I know you haven't necessarily planned to discuss this,
but I had a discussion with some people through a
bunch of connect them with banks and economists and things,
and I've heard that there are some fairly there's some
(19:13):
interesting opinions out there that we really need to deal
with the elephant in the room when it comes to Q.
We savor But it's a retirement age. I mean, I
know it's a it's an old chestnut of a talkback subject,
but what do you think of the arguments around you know,
what we need to do with the retirement age because
I just think it's surely just a fact of life
(19:34):
that it's going to have to move at some stage.
But it's going to take someone who's willing to lose
an election over it. I don't know.
Speaker 2 (19:40):
Yeah, it's always been a very challenging election topic and
you'll see and it's been weaponized against any any party
who's raised it as a as a concept. Look, I
think one really early step if you bring it back
to QV savior that you can make is decauple Q
savior from superannuation age and just take some of the
heat out of it.
Speaker 5 (19:57):
That way, hang on, what is decoupling from the superannuation You.
Speaker 2 (20:00):
Can access your key savior, Yeah, potentially a head of superannuation,
so you no longer say you can only get your
QY saber balance at sixty five for both at the moment.
Speaker 5 (20:11):
Well, that's the other thing is that your employer's obligations
on key we save a stop at sixty five. Is
that something that I'm out of date with. No, that's
true because should you be as long as you're working,
you should be able to, you.
Speaker 2 (20:26):
Know, receive those contributions. And some employers, and I'm sure
we do. We are one of them who will contribute
for employees over sixty five.
Speaker 5 (20:36):
But that's a key.
Speaker 2 (20:37):
But it's a better top.
Speaker 5 (20:38):
That would be something you negotiate or you've just got
a policy on it.
Speaker 4 (20:42):
We do.
Speaker 2 (20:43):
It's the right thing to do.
Speaker 5 (20:44):
So if you work for harber Asset Management, it's like,
don't worry when you're hit, just when you're really hitting
your straps. As a fund advisor, when you're sixty six, mind,
of course, one might say that if you're being a
fund advisor and you've got that amount of experience, you
shouldn't really care about that extra because you should be set,
shouldn't you. That wouldn't it be funny if you're having
(21:04):
a conference with the fund advisor and you're saying, I'm
really worried about my time, and the fund adviser will
be like, yes, I am i'd like next.
Speaker 2 (21:12):
Look, it's a really into one and you're not current role.
But I have had that conversation of you know, what's
the perfect age for an advisor and do you have
to have enough gray hair? Is go to trust you?
But then also clients they say, well, if the fund
advisor is not richer than I am, why would I
take their advice? So seeing both sides of that one.
Speaker 5 (21:30):
Actually it is a funny question. And I know it's
not quite on the topic. Again, I keep saying that,
but it's just a bit of a conversation, but I
wonder how many people are genuinely happy, because, look, you
don't live in a third world country. I'm not on
a third world income, so compared to a people and
a lot of other countries, I'm loaded and I should
be fine, but I'm worried and I look at my
(21:50):
situation and go, well, I'm not going to have what
I want. But when would I be happy with what
I've got. It's an interesting question because if you had
you know, say, if you've got five million bucks in
the bank and you bought a nice house and you
know on the shores of Queenstown, well you've got nothing
left and then you're not happy all of us. So
when are people happy? No?
Speaker 2 (22:08):
And that's you know, comparison is the thief of joy,
as they say. And so as you've just bought your
five million dollar house in queens Down, your neighbors probably
got a ten million dollar the house, and so you
know that can and you find there is that disconnective
wealth versus happiness that comes as well. You know, once
you get obviously through poverty and through basic standard of
living points, having more money at that point doesn't necessarily
(22:30):
make you happier.
Speaker 5 (22:30):
Is that part of the is that a part of
a conversation you have with clients in a way, because
you've got to get to the philosophy of what you
know what they you know what they're after, because as
because you are always chasing that next thing, aren't you.
I mean, it's our property of the week. Last yesterday
was the ultimate fantasy hum in Queenstown. And I couldn't
(22:51):
begin to guess what it was worth. They had to
be twenty or thirty million. And so someone who's just
won powerball they got fifteen if they had fifteen millions,
say they can't even buy half that? And so do you?
Is that one of the challenges of managers is just
working out who your clients really are and what they
need or what they think they need. Yeah.
Speaker 2 (23:12):
Look, and one of the things you often see is
people worry about do they have enough and how that
normally presents, you know, a client and a Klind conversation.
It's not something we Harvest specializes, but you know, from
our experience I'm able to touch on it briefly. Is
just around people worrying that they're going to run out
and so you know, a good advice conversation will normally
(23:32):
help them understand actually what they can do.
Speaker 5 (23:34):
Of course, I mean you're specifically fun manager. Yeah, we've
got a macro sort of point of view. I got
distracted there with my own genius. Let's get on to
the Middle East day. I've sort of was putting it
off too because it seems to be in the headlines.
But anyway, currently what's happening in the Middle East. We
see what's happening in the headlines. You've got to be
(23:55):
keeping the up to date news feed. But where are
we at and it's impact on markets now with and
we're talking around obviously and yeah.
Speaker 2 (24:05):
Absolutely having an impact. You've just seen the volatively leveled spike.
You've seen a real flight to safety. But then the
impact of oil and the impact of the closing of
the strait of from Mars is just a really interesting
dynamic and the potential impact that has and flows through
you know, Trump, I think today calling for other nations
to send ships and to protect the straight. Yeah, I'm
(24:26):
not sure like you, but I've seen many, many pictures
of canals and various other ways of mad Max type
approaches of getting oil across through Dubai cutting off the straight.
Speaker 5 (24:39):
Well, there are other things, but when we're talking about
twenty percent of the world's all supply.
Speaker 2 (24:44):
I'm not going to solve the problem, and that has
downstream impacts, and you're seeing it geopolitically, you know, I
think both the producers and the refiners now saying actually
they're potentially going to stop sending exporting refining products away
to protect their own industries. You know, the potential slow
down on growth that applies. But then it's that interesting
(25:06):
dynamic of the potential inflation shock as well. So you know,
often you'll see with a slow economy and expectation of
rates cuts, a flight to safety and interest rates going down.
What we're seeing is actually risk of rates going up
because of an inflationary shot from oil prices rising.
Speaker 5 (25:21):
Actually this is quite recent. I think I opened the
my news feed this morning and I saw something where
Trump is there's something about worrying about, you know, the
up and downing of the oil price according to whatever
announcements are made, and somebody is threatening a catastrophe economically
of biblical proportions of people lose faith in the oil market.
(25:42):
Have you caught up with that sort of.
Speaker 2 (25:45):
You know, I haven't, But look, I mean the oil
market and Trump is really important, you know, going into
use an election, the impact on oil and fuel prices
in the States is huge. The impact on potential growth
is as huge as they go into election, and so
you know, as the big thing we're really as being
discussed in markets, and what we're seeing is things move
up and down. How long does this last? And how
(26:07):
long how long does the conflict last and around all
the situation Iran as you referred to it earlier. You know,
an extended period will have a really strong impact domestically
for Trump and the US.
Speaker 5 (26:17):
Because I think it was something about if people I
didn't go into it in too much detail, but it
was if people lose faith in the oil market, and
I was thinking, I don't know how you'd ever lose
faith in your market. There's always it just would become
volatile and less predictable. That would be about it, wouldn't it.
But I mean, it's not something where people are going
to lose faith and investing in oil because we love
(26:39):
oil imaging and the stats on the million, you know,
hundreds of million dollars a barrel that the world needs
per day or whatever.
Speaker 2 (26:45):
It's Yeah, until there's replacements for that, it is still
required to produce the things that we consume and move
the things that we consume around the world. And so
you know, not having oil just mean to slow down.
And so you started to see that as it flows.
Since you's eoned, I think like you, I'm sure you've
seen like me. I'm sure you've seen the petrol stations
(27:07):
running out of fuel. You people rushing to think well,
I had.
Speaker 5 (27:10):
Very cross Shane Jones, who was very unhappy with Gull
the news that they'd run out or something. But I
think the truth someway Land in the middle that maybe
a station had run dry and Gull had said, look,
we've got plenty. I haven't caught up with that yet.
Speaker 2 (27:24):
It was just yeah, no, I think that's right. I
think but again, it's a bit like the toilet paper
during COVID, you know, the fear of not having forces,
the rush of people moving to the station and stocking
up much faster.
Speaker 5 (27:36):
What's your reaction to it? Just as someone, I mean
because you know, obviously in your role you keep you
guys keep a closey on these things. Do you also
have just a human emotional reaction of whether you're worried
or not or are you quite circumspect on this? It's like, ah, well.
Speaker 2 (27:49):
You know, I mean absolutely, And looks that's the first thing.
You know, we sometimes come across as a bit cold
because the first question that people ask us as always well,
what's the impact on make you you save a balance?
Or what does this mean for financial markets? And you know,
we don't often get asked about that, the actual human impact,
and you know the challenge that this has, and you
know it is it's a tragedy. You know, we're in
(28:10):
a world now where you know, there's a lot of
people and there's a lot of expats in Dubai. You know,
through the Middle East who are now very unsafe. You know,
there's people's travels, plans impacted, people aren't getting to and
from you know, Europe, people are stuck in New Zealand.
There's the sort of emotional impact and obviously that the
amount of death that's occurring through the region is just
an absolute tragedy.
Speaker 5 (28:30):
And I was just thinking in terms of also the
economic impact when you look at markets, because you know
you you mentioned that such and such, this would be
interesting in terms of what's happening. I mean, do you
are you worried about New Zealand's Are you worried currently
or are you thinking, well, tell you what, just don't
look at your key we saber right now. But where
(28:53):
are you in terms of long term short term concern Yeah?
Speaker 2 (28:56):
Look, and that's I think the right way to think
about it. There's long terms concerns and short term concerns,
and so you know, I think in twenty years time
whether they be looking back and thinking you'll get the
wrong But the fifteenth of March I was very very
worried about oil prices and what that was going to
do to my kevsavor balance. In twenty years time, I
don't think so.
Speaker 5 (29:14):
I don't think. To be honest, I mean, I'm on
a slightly more aggressive fund. I'm not going to look
at it and look, it's not a huge amount of
money anyway, but I'm not planning on withdrawing that money
for you know, years and years. So I'm just it's
just there. Forget it, don't even look.
Speaker 2 (29:31):
No, that's right, and certainly if you're an individual thinking
keeps over that's the right thing to do is not
panic in situations like this and tried better judge the markets.
From an investment professional side, absolutely, we're really focused on
the short term impacts and where we see that going.
The growth impact on the New Zealand economy, you know,
how we see that playing out into individual stocks. You know,
(29:51):
if you look at the New Zealand, it's a good example.
You know, oil and prices and they've already announced that
they may need to cancel a number of flights going forward.
You know, those things have an impact and they have
an impact on the outlook for the company, so we
have to factor that it is the short term, but
longer term you know, again, these things, unless it's a
very prolonged piece, it's something that gets worked through.
Speaker 5 (30:11):
Hey all, we have to take a break. I've got
lots more questions for you, but we'll come back and
just to take if you'd like to ask any any
questions of Chris. Chris Wilson from Harbor Asset Management. We're
talking about a bit about key we Savor, which we
had a chat about. We've managed to mingle the two
in with the conversation around what's going on with the run.
But if you got any questions for Chris's reckons, then
(30:31):
give us a call eight hundred and eighty ten eighty,
but we'll be back in a ticke. It's twenty to six. Yes,
that is Harbor Asset Management, who are fund Manager of
the Year with the morning Star Awards, and Chris Wilson's
with us actually, and we're talking about the Middle East
and the conflict and the effect it has on markets. Chris,
it seems, you know, back in the days when there
have been either global oil shocks or market shops, it
(30:54):
does feel naively to me that it used to be
very much in what in the eighties, remember the equity
corp days, and it was a wild West, and so
when the market lost, you know, I had confidence lost
in it. Everything just was carnage. I have this, maybe
it's a naive hope, but that things just feel at
least more measured and better informed these days than there
(31:16):
I've ever been in that there's maybe a bit of
circumspection when it comes to market reactions that we don't
see the sort of you know, I mean back in
Wall Street, the stomach crash in nineteen whatever it was.
You know, is there a different sort of space where
we deal with bad news in a more measured way
or can it be just as dramatic.
Speaker 2 (31:36):
I think it can be just as dramatic. Unfortunately, I
think you know the animals of time and maybe softened
that one for you. But if you think it's similar
to your comment around, you know, will you be looking
back five years from now remembering the state you know,
you think of all of the incidents or severe drops
we've had since you know, nineteen eighty seven, the you
think of the drop during COVID, of March of COVID,
there was a huge drawback in markets, which quickly rebounded
(31:59):
and so that time disappeared. But you know, I think
last week on Monday, we had a three percent downaday inded.
Speaker 5 (32:05):
X, which so that's a fall of greater than three percent,
and that's happened how many times, I.
Speaker 2 (32:11):
Think about ten times in the last last fifteen years
or so. So yeah, again, that is a big day.
And you know that that doesn't it has rebounded back
and so you do get some normalization. But those those
swings can happen, and you've seen it even in the
months prior ahead of the situation are on you referred
to as the Saskov polips, where companies that are impacted
(32:32):
by AI would just industries would just see large swings
in a day as a research paper or a piece
of information came out around that sector which took which
created just a very different view on the performance.
Speaker 5 (32:44):
How does it because the bond markets, which are seen
as being a bit more of a I don't know,
if you've bought a few bonds, you'd like to think
you're a bit safe than the average beer, wouldn't you.
But they don't like the oil oil shocks, do they know?
Speaker 2 (32:55):
And they don't they haven't that inflationary impact, and so
the bond markets and that sees rate rise and you know,
obviously bonds are the funny one where the interest rates
go up and price go down, and so that is
a worry that the Fed and Reserve banks will we
need to do things to stop inflation. So that infation,
the price of oil goes up, the price of things
that you buy goes up, inflationary shock, and so then
(33:18):
how do you damp inflation. You've got a toolbox which
is pretty limited. You raise interestraight, and so yeah, I
think that's an interesting dynamic, but it is a limited
toolbox that they're it does it does feel strange.
Speaker 5 (33:32):
You know that we can have inflation and all that
sort of thing, and what we do is I probably
need to have a chat with an abreament about this,
actually pick of brains, But you know that you put
the cash rate up to deal with inflation. When I
sometimes wonder how much inflation has an effect on inflation
because people are having to button back and what they spent,
(33:53):
you know what I mean. So you've made You've made
renting and more, you know, owning a house or borrowing
more expensive, and it's put the cost of things up,
whereas inflation is already putting those things up. I don't
understand how that works. But is that a dumb question?
Speaker 2 (34:10):
It is not a dumb question, and it's been well studied,
it's and so inflation expectations do drive inflation. And so
you know, if you think of wage inflation, if I'm thinking, well,
prices are going up, I need you to pay me
more because you know, I have an expectation price can
you go up? So I want you to pay me
five percent more this year.
Speaker 5 (34:30):
And so like a dog chasing its tail, and that
then has.
Speaker 2 (34:33):
Put more inflation. And so as you get confidence and inflation
is not going up. Actually, if I've got confidence that
prices aren't going up as much, then my wage inflation
will come down. And so it does reduce. And so
that's the challenge out that doctor Breman.
Speaker 5 (34:45):
Has is does are there different I mean, this is
getting into economist territoryily, isn't it? Isn't it? You give
me that lock at time?
Speaker 2 (34:53):
I turn, that's a lot that you're going to a
good place. We should we should follow it down.
Speaker 5 (34:56):
No, But yeah, I mean are there situations where because
they talk about tradeable inflation, non tradable and all that,
but are there types of inflation where it's sort of
self curing, like it's a bit I would relate it
to you get a virus and your body forms antibodies
to that virus and you can sort of heal yourself
and ultimately all for the next time. Are there types
(35:16):
of inflation where you wouldn't necessarily see intervention from the
Reserve Bank because this is sort of self curing.
Speaker 2 (35:24):
Yeah, I think yes, I mean short aunt. Yes, the
different types of inflation aren't treated differently by the Reserve
Bank and how they think about it. So you know,
absolutely some things and the length and duration of impacts
has a been so again a short short, a short shock.
So you know, say a change in attacks that adds
one percent of the price or gest change.
Speaker 5 (35:44):
They will look nothing to see.
Speaker 2 (35:45):
Because it's you know, it's a one off iverything, and
one off in the sense of it just lifts all
the prices immediately and then they stay at the new level.
Whereas if you think of, say something that all shock,
it's actually not just the increase in price on that day,
it's the potential ongoing growth. It's the potential other impacts
that flow through as well.
Speaker 5 (36:02):
So do we understand everything that's happening with the oil prices,
because we did see some strange fluctuations based on Trump's rhetoric.
What was it seventy three bucks a barrel just prior
to the conflict. Then it went up to one hundred
and fifteen bucks, and I think I saw it dropped
back to ninety dollars after Trump said something, Ye, what is.
Speaker 2 (36:22):
And possibly pop back up again. And really it's about
how they deal with production and who's producing oil, and
then the release of strategic reserves as well. So what oil?
Speaker 5 (36:31):
Is there? A vain which Shane Jones was talking about.
Speaker 2 (36:34):
Yeah, cetera ability to release reserves and yeah, you've seen
our rhetoric around that. And so again the trade off
is how long does the strait stay closed for? How
long does it take for oil production and essentially oil
to start flowing around the world again versus how much
of that shortfall and the time it takes for that
to happen is that covered by strategic reserves that are
released by the UNUS and other.
Speaker 5 (36:56):
Country People will investors bet on this sort of stuff?
I mean, I mean the risk of the ones who
aren't too risk averse would be like, well, Okay, it's
got up to one hundred and twenty bucks a barrel,
I'm gonna I don't invest on what is it? Short?
The stock or something and bet that it's going to
be down at ninety dollars in about ten days time.
Speaker 2 (37:13):
Absolutely, absolutely, and so you know it's as you've seen
the price movement. Investors will try to predict anything that's
moving a lot of value because that's where you can
make money.
Speaker 5 (37:23):
And if you worked in the White House, you just
hear what Trump Trump says, I'm gonna I'm going to
make an announcement to call the markets quick shots. I mean,
I hate to think that happens.
Speaker 2 (37:31):
But no, I mean you've suddenly seen that with prediction markets. Yeah,
I'm sure we would have seen people betting on community
no longer being in power was the most recent controversy.
Someone made bets on Manjuro coming out of power, and
one money on prediction markets. And so there's been a
lot of talking to media around the role of prediction
markets and the use of inside information to make money
(37:53):
out of world events.
Speaker 5 (37:54):
Gosh, we'll be back on a tech It's fascinating conversation
though all this ten to six news talks. The'd be Yes,
welcome back to smart Money. I'm Tim Beverage. My guest
is Chris Wilson, Harbor Asset Management, and look, we've just
got a couple of minutes to go. And look, we've
been talking about a bit of bat kep we save.
But of course the conversation around investings to do with
what's going on and run and oil shocks and the
(38:15):
price of all and all that sort of thing, and
it does tend to leave us all with a slight
sense of anxiety. And we've seen panic buying. I thought
maybe if you've got a final sort of take on,
you know, putting things in perspective.
Speaker 2 (38:29):
Yeah, Look, and I think I'll come back to your
earlier comments, you know, think about this. Is this something
in five years time you'll you'll think back and worry
about or remember you know, this event or the circumstance.
There's a very high chance you won't. And look, you
know it's important to not panic in these situations. You know, absolutely,
check you check your fund, seek advice from your advisor
(38:50):
or from your your provider if you can, but don't panic.
You will you will see through this stuff over time.
And there's been there's been incidents, there's been incidents in
the past. And look, we do spend a lot of
time thinking about these We spend a lot of time
talking about these things. That's what we're paid to do
an investor. You should you shouldn't spend too much time
worrying about this.
Speaker 5 (39:09):
Actually you said check your fund. Is there is there
a school of thought to say maybe don't? I mean
how because you guys it's yeah, I mean how does
that work?
Speaker 2 (39:19):
Well, check your fund not in the context of check
your balance and worry about your balance. Okay, check you're
in the right fund for what you're trying to do,
as opposed to check your balance every day to see
what's happening with oil and see the impact on your funds.
Speaker 5 (39:32):
So, of course, with the key we say, as I said,
because we've heard this advice time and time again, if
there's a if there's a market price shock and you're
in an aggressive fund, it's not the time to jump
into a conservative fund because you just lock in the lost. Yeah.
Speaker 2 (39:47):
No, that's it's sort of pretty general advice around it
as well. Yeah, it's not trying to react to market
events or pick one that when the right time to
change funds to tie market events is not the best out.
Speaker 5 (40:01):
Just some context on the three you know, the three
percent drop that we had in our market in the
past week on one day, I think, wasn't it? Yep?
What is that comparable to comparable to other markets around
the world, will be better, worse or you know the
DAL the S and P fifty, all that sort.
Speaker 2 (40:17):
Of very comparable. This is a this is a certainly
global event. Everyone uses oil. Everyone's aware of us going
on in the US, and what happens in US markets
does tend to drive global markets.
Speaker 5 (40:28):
Feel slightly consoling, isn't it. I mean if we were
the only market that we're going then that would feel
very lonely.
Speaker 2 (40:34):
Yeah.
Speaker 5 (40:35):
Absolutely.
Speaker 2 (40:36):
It was always the food and mouth disease sort of
issue in New Zealand. Was the UK study we used
to do at University of what would happen to a
fud and mouth case at New Zealand years and years
ago and the impact on the economy. But no, this
is this is certainly a global issue that everyone's feeling
at the moment.
Speaker 5 (40:50):
All good stuff. Hey, Hey, thanks so much for coming in. Chris,
good to see you and all of this. All the
show will be online after six o'clock. You'll be able
to jump on and check out any of the hours
we've had. Been a great show. Thanks everyone for their
participation thanks to my producer Tira Ward. Enjoy the rest
of your evening. We'll catch your same time next weekend.
Have a great night.
Speaker 3 (41:11):
Sing it with you before.
Speaker 1 (41:25):
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