The smart money

As a stall in house-price rises turns the spotlight on other investment strategies, the investors of Generation Rent are wondering what’s best to do.

As a stall in house-price rises turns the spotlight on other investment strategies, the investors of Generation Rent are wondering what’s best to do.

In a darkened meeting room high above Auckland’s Shortland St, a large group of students from St Peter’s School in Cambridge is listening to one of the best-known names in the New Zealand investment industry, Brian Gaynor, on the subject of personal savings. The advice is along the same lines he always adopts: start saving early; don’t invest in just one thing; take more risk when you’re younger, less when you’re older; and if it seems too good to be true, it probably is.

The messages may be old chestnuts, but Gaynor says the fact he is speaking to secondary-school kids at all signals a generational shift in New Zealanders’ attitudes to savings and investment. “Obviously the teachers bring them along, but you’d never have got that a while ago.”

The head of investment firm Milford Asset Management, Gaynor says the advent of the KiwiSaver retirement savings scheme a decade ago has driven two big attitude shifts: a challenge to the preference for residential property investment over other assets as house prices stall; and the dissipation, at last, of the fear experienced by a generation of investors after the 1987 sharemarket crash.

That fear persisted as house prices kept rising, fuelling the stampede to residential-property investment that bred an apathy towards other investments, especially after the collapse of finance companies in the late 2000s hammered confidence in that sector too.

Gaynor notes that it took nearly 30 years for Wall Street to recover from the 1929 crash that sparked the Great Depression.

“Sometimes, if you have

At last, the fear experienced by a generation of investors after the 1987 sharemarket crash has dissipated.