Website of the YearOPINION:
At this time of year, the business pages tend to be littered with forecasts, predictions and prognostications about what's ahead.
Where the economy is headed, what house prices are likely to do, whether interest rates are going up or down, and if the sharemarket will have a good year or not.
I'm not going to bother with any of that for this first column of the year. Trying to predict the unpredictable is just asking for trouble.
Forecasts usually end up being wrong, with the only variable being the magnitude of wrong. Let's be honest, your guess is as good as mine, or anybody else's.
While the predictions of the financial community make for interesting reading, I'd suggest readers take them with a grain of salt.
NZ shares have posted a positive annual gain for 37 of the past 50 years, so if you simply assume they're going up at the start of any given year, you'll be right almost three-quarters of the time.
Maybe that's why a typical prediction from many pundits is for the market to experience a positive year, but for returns to be slightly more muted than the 9.8 per cent annual return that has prevailed over that period.
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Advertise with NZME.That's the safe place to be for a forecaster, optimistic enough to be seen as a glass half full type but restrained enough to appear appropriately conservative.
In all honesty, I wouldn't want an adviser who claims to know for sure where markets are going anyway. There are many other qualities to look for first, all of which are much more important when entrusting your savings to someone.
Rather than claiming to be a financial soothsayer, a good adviser will focus on putting your portfolio together in a way that makes it sturdy enough to withstand whatever market conditions come your way.
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A well-constructed set of investments, tailored to your own individual needs and risk profile, and based on sound, disciplined investment principles is by far the best thing you can do to maximise your future returns.
A good adviser will do a lot of listening and will focus on getting this right from the very beginning.
More importantly – they'll ensure you stick to it, rather than speculating on which way the market is going or which individual share could be this year's "next big thing".
To do their job well an adviser has to play a few other roles too, including that of an educator.
Financial markets and economic issues are ever-changing, and they have a way of ensuring that even seasoned professionals feel out of the depth on a regular basis. This is quite healthy, because the moment you get complacent and start thinking you have all the answers, you're in trouble.
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Advertise with NZME.They're also the gatekeeper - or maybe more accurately, the bouncer - to any bad ideas that might try and get in the door. There's always a bandwagon to jump on, someone unscrupulous trying to sell you something, and the temptation to panic or get overly enthusiastic at precisely the wrong time.
Sometimes we need a business partner or a coach to keep us on the straight and narrow, tell us when one of our bright ideas is a terrible one, or that we are starting to stray a little too far from the path.
If you're testing out a potential investment adviser, look for one who focuses on how they'll fulfil all these other important roles, rather than one who claims to have a perfectly calibrated crystal ball.
Mark Lister is Head of Private Wealth Research at Craigs Investment Partners. This column is general in nature and should not be regarded as specific investment advice.