Why a high NZ$ can be a good thing

The high New Zealand dollar against the UK pound and the US dollar, while not great for the export side of the NZ economy, can be nevertheless good for the investor.

Firstly there is a much wider choice of stocks to choose from, are but I hear you say "therefore more to be confused by", yes that is true but if you seek good advice then there is a much wider selection out there.

Secondly, with the currency currently at multi year highs versus the UK pound, if we revert back to the 10 year average around 36/37 (we are currently 46) then there is potential for a substantial pick-up from the currency as well as the returns from the individual stock selection. Likewise the US, though potentially not as big a pick-up as from the UK pound, there are some good returns to be made out there if you just take the time to investigate the opportunities.

Don't get caught up in the "can't invest off-shore", you can if the circumstances are right and at present for the UK they look very good while the US just looks good. On the flip side Australian shares are currently expensive in NZ$ terms, so may be a chance to re-weight the portfolio to take advantage of these opportunities elsewhere they will not last forever!

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