tristan.nz

Over the past few months, as New Zealanders have gathered around virtual water coolers, two major topics have dominated the conversation: Numbers of new cases of Covid-19 and the impact of the pandemic on the economy. While discussing figures and analysing statistics around Covid-19, Kiwis won't have failed to miss the commentary about the stability of global markets.

Despite people's understandable reticence to make any financial moves during a global crisis, investing is a long-term game. Markets have always recovered after periods of downturn, which is why this might be the perfect time for down-under investors to broaden their portfolios to include global markets such as the US.  

Companies like online brokerage platform Stake have been the frontrunners in opening direct channels to the US markets, making it easy for New Zealand investors to trade stocks and ETFs, including with some of the world's biggest brands like Tesla, Amazon and Google.  

Stake's global head of marketing, Bryan Wilmot, says he was encouraged to see an uptake of new customers during March and April, which he attributes to people aiming to diversify, as well as thinking increasingly globally.

"You don't want to be overexposed to one market or one asset class," says Wilmot. "Typically, what we see around the world is that investors have a home market bias, which is the difficulty previous investors have had trying to get exposure to the international market.  Now, as the world gets fundamentally changed by technology, diversification isn't something which is difficult to take advantage of, as it's readily available."

Wilmot says the US provides huge opportunities for Kiwi investors and adding exposure to the US markets is a prudent move to broaden any portfolio.

"What happens in the US overnight has an impact across the ASX, the NZX and so people are really focussed on what the US market is doing.  Australia and New Zealand are smallish markets which contribute two percent of the global economy.  That's not a lot to take advantage of. Companies at the forefront of developing treatments or a vaccine for Covid are all listed in the US.  

"Companies like Zoom Technologies or Paleton, which are leading the new generation of what might be a work from home era or an exercise from home era, are all in the US. They won't miss out in times of volatility.  In domestic markets, if they're falling, there's not a whole lot you can do. In the US there are a number of different avenues you can explore, reconfigure your portfolio or defend yourself against what might be happening."

Wilmot believes New Zealanders have a strong appetite for investing in the US stock market.

"It's growing and becoming more mainstream," he says. "A significant amount of people who are invested in the domestic markets really do want to go out and get that global exposure."