Thinking of the Upside – Dream a Little – Promoted New Zealand as a Tourist Destination – Tongariro Alpine Crossing

With the roll out of the covid-19 vaccine started around the world, it is time to think about the upside…… and to start dreaming a little.

Over the next few months, I will do my best to help promote New Zealand as a great destination to visit once international travel recommences.  We live in a wonderful, clean, and diverse country.

This is a departure from what is an Investment focused Blog (which I will do occasionally and have done in the past).

Investment related Posts will continue uninterrupted however.

For my offshore followers start planning a trip down under, dream a little.  It would be great to see you.

For those here in New Zealand, as you will know, it is a great to time to see New Zealand, as many of you have been this summer.

Tongariro Alpine Crossing

The Tongariro Alpine Crossing is one of New Zealand’s, if not the worlds, most popular one day walks.

The landscape and scenery are very different to other parts of New Zealand, as you will see from future Posts.

For more information on the Tongariro Alpine Crossing and the Tongariro National Park see below.

The crossing is a short, on average 6-8 hours, walk through a volcanic landscape, including crossing large craters and calderas, seeing emerald lakes, steam rising from mountain sides, and the smell of sulphur (luckily not for long!).  The track covers 19.4km (12 mile).

Photo below, starting out, looking up toward Mt Ngauruhoe, elevation 2,291m (7,516 ft).  Mount Ngauruhoe – Wikipedia

It may look familiar to Lord of the Rings fans, Mount Doom.

Photo below is looking back toward the start of the track at the Mangatepopo Carpark, which is at a 1,120m elevation. 

The track climes the Mangatepopo valley to the saddle between Mount Tongariro and Mount Ngauruhoe.

The highest point on the track is at the Red Crater, see below, at 1,886m. The trek finishes at the Ketetahi carpark, 750m elevation – overall you do more down hill than up hill!

Below, views on the way up! Spectacular, an old lava field.

Views near the top, looking toward the South Island.

Can almost touch it and near the half way point, after crossing the south crater.

Landscape and views from near the top. Red Crater, big photo below.

Views of the Blue lake (in the distance) and first sighting of the Emerald Lakes (smaller photo on right below).

And the Emerald Lakes, strong smell of sulphur here.

Heading down, after crossing the central crater and walking alongside the Blue Lake.  In the photo below Lake Taupo is in the distance.  Lake Rotoaira is the small lake in the foreground.

Background Tongariro Alpine Crossing

As mentioned above, the Crossing is 19.4km trek.  

It is a point to point hike, there are several companies that provide shuttle services to make your day easier.

They will pick you up in National Park (small town nearby), dropping you off at Mangatepopo carpark, start of walk, collect you at the end of the days walk from the Ketetahi carpark, and return you to National Park. A very good service.

For further information on Tongariro Alpine Crossing, Tongariro Alpine Crossing Track | National Park | Walks & Hiking | Shuttle | World Heritage (tongarirocrossing.org.nz)

and

Tongariro Alpine Crossing Summer brochure (doc.govt.nz)

The Tongariro Alpine Crossing is situated in the Tongariro National Park.

Tongariro became a National Park in 1887 and boasts dual World Heritage status.  It is New Zealand’s oldest National Park.

In 1990 the Park was recognised as a World Heritage Site for its outstanding natural values.

In 1993, Tongariro National Park became the first place in the world to be listed as a World Heritage Site for the spiritual and cultural values the landscape possesses for the indigenous people in the area.

The Park includes three active volcanoes Tongariro, Ngauruhoe and Ruapehu.

For more information: Tongariro National Park – Wikipedia

I hope you get to visit the Tongariro National Park, the surrounding towns, landmarks, attractions, and have time to complete the Tongariro Alpine Crossing. Please read up on the crossing and prepare accordingly. It is an alpine crossing and caution should be taken, a watchful eye on the weather is particularly important.

My 13 year old son and I completed the crossing in 4hrs, 40 minutes, including the odd stop and a lunch break. Teenage boys tend to be in a hurry!

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Global Investment Ideas from New Zealand. Building more Robust Investment Portfolios.

Most read Kiwi Investor Blog Posts in 2020

The most read Kiwi Investor Blog Posts in 2020 have been relevant to the current environment facing investors.  They have also focused on building more robust portfolios.

The ultra-low interest rate environment and sobering low return forecasts present a bleak outlook for the Traditional Balanced Portfolio (60% Equities and 40% Fixed Income.)  This outlook for the Balanced Portfolio was a developing theme in 2020, which gained greater prominence as the year progressed.

In essence, there are two themes that present a challenge for the Traditional Balanced Portfolio in the years ahead:

  1. That fixed income and equities (mainly US equities) are expensive, so now may not be a great time to invest too heavily in these markets; and
  2. With interest rates at very low levels, there is increasing doubt that fixed income can still effectively protect equity portfolios in a severe market decline in ways they have done historically.

My highest read Posts address the second theme above.

The Balance Portfolio has served investors well in recent years.  Although equities and fixed income still have a role to play in the future, there is more that can be done.

The most read Kiwi Investor Blog Posts outline strategies that are “more that can be done”.

I have no doubt investors are going to have to look for alternative sources of returns and new asset classes outside equities and fixed income over the years ahead.  In addition, investors will need to prepare for a period of higher inflation. 

Not only will this help in increasing the odds of meeting investment return objectives; it will also help protect portfolios in periods of severe sharemarket declines, thus reducing portfolio volatility.

The best way to manage periods of severe sharemarket declines, as experienced in the first quarter of 2020, is to have a diversified portfolio.  It is impossible to time these episodes.

Arguably the most prudent course of action for an investor to pursue in the years ahead is to take advantage of modern investment strategies that deliver portfolio diversification benefits and to employ more advanced portfolio construction techniques.  Both of which have been successfully implemented by large institutional investors for many years.

From my perspective, maintaining an array of diversification strategies is preferred, investors should diversify their diversifiers.

The most read Kiwi Investor Blog Posts in 2020 were:

Posts closely following were Understanding the impact of Volatility on your Portfolio and Optimal Private Equity Allocation.

Thank you all for you continued support and all the best for the year ahead.

Please read my Disclosure Statement

 

Global Investment Ideas from New Zealand. Building more Robust Investment Portfolios.

Monthly Financial Markets Commentary and Performance– December 2020

Cautious Optimism

  • Caution optimism prevailed across markets and economies as the global annus horribilis ended.  Wishing you all an annus mirabilis for 2021 (a wonderful year).
  • Global markets finished the year buoyed by the commencement of the Covid-19 vaccines roll out, ultra-low interest rates, and finally a new US government spending package.
  • Global equities climbed 4.9% in December and are 16.9% higher than at the end of 2019.  Who would have thought that was possible after the near 30% declines earlier in the year? 
  • The US sharemarket ended the year at historical highs.  The S&P500 returned 18.4% in 2020 and is almost 70.0% higher from its yearly lows in late March.
  • The New Zealand sharemarket also finished the year strongly, rising 5.5% in December, returning 14.7% in 2020.  This is the Index’s ninth consecutive year of positive returns.  The benchmark has more than quadrupled since the end of 2011, and more than doubled since 2015! (benchmark returns are based on S&P Dow Jones Index data).
  • The Australian sharemarket returned 1.2% in December, eking out 1.4% for the year.  The Information Technology sector posted a 9.5% gain in December and 57.8% for the twelve months period.  The energy sector lost 27.6% for the year, and utilities fell 16.7% over the same period. These sector relative performance outcomes have been experienced internationally, along with the momentum and growth factors outperforming value over the last twelve months.  Although growth and momentum outperformed value in December they have trailed value over the last three months of 2020.  In Australia, value returned 18.1% over the last quarter of 2020, momentum and growth returned 7.8% and 10.1% respectively.
  • The V shape economic recovery is well on track around the world.  The New Zealand economy expanded a stronger than expected 14% in the third quarter of 2020.  This follows a historical 11% contraction in the second quarter.  The economy is 2.2% smaller compared to a year ago.  Construction and retail trade led the recovery following the second quarter lockdown.  As the Kiwi Bank economics team highlighted, 95% of New Zealand’s economy is doing well, but the other 5%, primarily the tourism and education sectors, are not, and we should spare a thought for them.  The peak over the Kiwi summer period, December – March, will be a test for them. 
  • As mentioned above, the USA has instigated additional government spending to combat COVID-19.  The relief package is worth around $900 billion, 4% of the economy.  It was larger than many expected and includes $600 personal payments to most Americans, along with additional unemployment benefits, and further support for businesses.  This package should help to support US economic activity over the first quarter of 2021.
  • Japan also announced additional economic stimulus measures in early December, this includes around 30 trillion Yen in additional spending to prevent the spread of COVID-19, transform the economy post the pandemic, and enhance infrastructure.  The Japanese economy grew 5.3% in the July – September period, after declining 8.3% in the second quarter.
  • Chinese industrial profits have grown 15% over the last year and exports are booming.  Over the twelve months ending November Chinese exports have grown 21%, the highest level of annual growth in almost 10 years. 
  • European manufacturing activity has been stronger than expected, suggesting fourth quarter economic activity is going to be higher than anticipated. 
  • Likewise, US manufacturing has been resilient at a time of rising COVID-19 cases.
  • In Australia, Consumer sentiment has reached its highest level in 10 years.
  • The UK and Europe have agreed on a post-Brexit Free Trade Agreement that will result in zero tariffs and quotas on goods that comply with rules of origin.  Terms on trade in services have also been reached, which are flexible reflecting the closeness of business activities.

The Year ahead

  • Although economic activity is expected to moderate in the fourth quarter of 2020, given rising COVID-19 cases, complicated by the northern hemisphere winter, consensus expectations are for just over 5% global economic growth in 2021, led higher by Europe, UK, China, and India.
  • After a sluggish start to the year the global economy should accelerate due to the rollout of the vaccines, and mass immunisation reduces the virus threat, the continued accommodative central bank policy settings of ultra-low interest rates, and government spending packages.
  • More than 12 million vaccine doses have been administrated in 30 countries so far.  Israel is leading with 10.5% of their population vaccinated.  America has given out 4.3 million doses, 1.3% of their population.  A World Health Organisation linked plan is in place to administer 2 billion vaccine doses globally in the first half of 2021.
  • The US Federal Reserve’s (Fed) adoption of a flexible average inflation targeting will see global interest rates remain low for some time.  The Fed is not expected to raise interest rates until 2025.
  • In this environment, global equities are more than likely to outperform in the year ahead, global bond yields rise moderately, and the US dollar weakens further.  Emerging markets are well placed in this environment, the value factor will benefit from greater economic certainty in 2021, and commodities such as oil may also find greater support.
  • In America, Georgia Senate run-off elections in mid-January provide a short-term focal point for markets.  The result will determine control of the US Senate.  A switch to a Democratic party-controlled Senate will likely see changes to US tax policies in the months ahead.
  • Inflation, although anticipated not to be an issue over the next few years, will become more of a threat in later years. 
  • Investors should prepare themselves for the risk of higher inflation as outlined in these Kiwi Investor Blog Posts: Preparing your Portfolio for a period of higher inflation and Asset Allocations decisions for the conundrum of inflation or deflation

 

Source: Man

Please read my Disclosure Statement

Global Investment Ideas from New Zealand. Building more Robust Investment Portfolios.