Q&As: Grandparents don’t need a trust to save for their grandchildren; New Zealand’s tax on capital gains is confusing; Depreciation on rental property.
Is it dumb to diversify shares or property? Diversification is not all it’s cracked up to be, according to a man who read my last column, which praised the spreading-your-risk idea. “Bill Gates didn’t diverse much, and it didn’t do him much harm,” he writes. “The fact remains that the richest people on the planet have become that way because they haven’t diversified.
One bad apple — New Zealanders are bad at diversifying. Most New Zealand shareholders are frighteningly undiversified. About 24 per cent of share investors own shares in just one company, and another 36 per cent hold shares in two to five companies, according to recent research by the stock exchange, NZX, and sharebrokers ABN AMRO Craigs.