Finance and Investments

When I think of the finance company sector I am reminded of that scene in Alice in Wonderland where she says "You are nothing but a pack of cards." The assembled company then flutter gently to earth in a flurry of diamonds, hearts, spades and clubs.

Yet another finance company has hit the ground, the 17th, and, I wearily note the story is the same old, same old. Lombards investment strategy is apparently an issue with a substantial amount invested in a Brooklyn Rise Development, rumour has it that around 25% of its capital is at risk, Lombard is only secured as the second mortgage.

This is the 17th finance company to fail or freeze funds in less than two years. Thank goodness for the New Zealand Qualifications Authority initiative which will teach the next generation about personal financial management. I am delighted to be the industry advisor in this instance. We are covering the full range of investment and financial decisions. One area I intend to focus on is the sorts of questions investors need to put to the companies they use; the relationship between knowledge, risk and return and some knowledge of the biases which affect our savings and investment decisions.