Useful booklet is a good starting point for investors

Press, 24 May 1988, Page 32

Useful booklet is a good starting point for investors

A useful publication that should be read by all potential investors is the Financial Planning Guide by Bret Wilkinson. This 36-page book is easy to understand, and ideal for the novice as well as the more experienced investor. Mr Wilkinson wrote the book after the October sharemarket crash. He says that it was very evident that many investors at the time of the crash suffered through not having a balanced portfolio. “The booklet is designed to help people plan their own portfolios. Such an approach will probably help people to stay ahead of the punter,” Mr Wilkinson says. He has been a writer for the “Auckland Star” and the “Sunday Star” with a weekly investment article.

More recently, Mr Wilkinson was appointed by the Guthrie Financial Corporation to set up unit trusts.

He firmly believes that financial planning is frequently overlooked until it is too late. If investment in the sharemarket is not balanced with other investments the losses in a crash will be greater than they need be. A professional investment advisor is able to assist by analysing your present financial situation, considering your objectives and expectations, and helping to formulate an investment plan. The book suggests how to choose a good invest-

ment advisor and how to avoid those with a limited range of products to offer. It is important for any investor to know the type of returns a particular investment might offer. This could be in capital gain (where an investment increases in value)' or in income (such as a portion of rent from a property trust), or a mixture of both. Any investor should not set out without knowing the meaning of all the terms involved with in-

vestment. For example, a person has no hope of .obtaining a balanced portfolio if the term “balanced portfolio” is mis understood at the start. An investor will also need to know the various merits of sharemarket investments and property investments. Some investments may offer attractive returns, but be high risk. Others may provide greater security, but a smaller return. Mr Wilkinson covers

property investments outlining their advantages and disadvantages. Disadvantages of a property investment should be considered carefully. Since the sharemarket crash, property has seemed a more stable investment. This may or may not be true.

There are also property trusts that could be worth considering. A good property trust could provide consistent growth in the medium to long term and thus provide good protection for capital, along with an income stream.

Mr Wilkinson suggests that one should ask about the various properties in a trust and their locations. A section of the book discusses world economic influences and how this is important to New Zealand investors.

Another section explains foreign currency and its effect on the Kiwi dollar. He explains what makes the New Zealand currency fluctuate. After reading this section, one will know the meaning of expressions such as, “The Kiwi (dollar) firmed up to 59.16 against the U.S. dollar, or 83 against the Australian.” Taxation considerations are covered along with retirement planning and superannuation. The Financial Planning Guide is not an expensive publication. It can be read easily and understood in an evening and could well prevent many disappointments for the investor.