Originally Posted by
skid
i understand your sentiments.The NZ share market has not had that 10% correction so why get twitchy?--Well because the US and other overseas stock markets have had that 10% correction and we live in a world of globalization.So while it has'nt happened here ,it is a good time to exercise caution.
There is more than one way to do this and it doesnt necessarily mean selling everything--But you should be monitoring if you take it seriously.
In the end NZ is just a tiny little market that couldnt compete with Los Angles county so a stupid decision somewhere in another part of the world can ,unfortunately have a major affect on us.
you can adopt the opposite approach and buy up,hoping for a bargain but at this stage many would say that you are playing longer odds than waiting for things to settle overseas.
IMO everything operates within a framework -so you may have a good share that operates in the NZ share market worth just over 18,000,000---Whats to say you wont end up owning a good share in a NZ share market worth 15,000,000(because of dumb things happening overseas)--My guess is that the SP would have gone down,even though it rates just as good compared to the rest of the share market and is still a good company doing good things.
If bad things happen overseas I think its not realistic to not think at some stage NZ wont play follow the leader (When the US sneezes..and all that...)
This idea works for things like property as well--if the total property market is worth 10-20% less,and your property is still worth the same % of that total (lets say its a good property in a good suburb) its still going to be worth less,because the whole playing field has shifted because to much money has been wiped out of the whole market--even with a housing shortage