September 2004Police graves rededicatedA large crowd of relatives, policepersonnel <strong>and</strong> a former <strong>colleague</strong> wason h<strong>and</strong> at Waikumete Cemetery on 30July for the rededication of the gravesof two police officers - Constable NeilMcLeod <strong>and</strong> Constable Percy Tulloch- who were slain on duty.Project Respect, an initiative ofcommunity relations staff at Henderson,tidied up the graves of both officers aftertheir grave sites had been discovered ina state of disrepair.Neil McLeod was the first policeman<strong>to</strong> be slain on duty in <strong>New</strong> Zeal<strong>and</strong>.He was shot dead on 30 July 1890,onboard a steamer, while on transfer <strong>to</strong>Auckl<strong>and</strong>. He was killed in front of hiswife <strong>and</strong> child.One of four officers killedPercy Tulloch died on 8 Oc<strong>to</strong>ber 1941when shot dead by Stanley Graham.He was one of four police officers, twohome guardsman, <strong>and</strong> a civilian whowere shot dead near Hokitika.The Commissioner of Police, RobRobinson, spoke at the ecumenicalservice.Police <strong>New</strong>s The Voice of PoliceAmongst the mourners was FrankMcCulloch, a former <strong>colleague</strong> of PercyTulloch. Frank was part of the guard ofhonour at the funeral of the 35-year-old.“It was a very miserable day...<strong>and</strong> theoccasion made it more miserable,” MrMcCulloch <strong>to</strong>ld the Western Leader afterthe service.The clean-up was organised by SergeantBrian Louden of Henderson <strong>and</strong> localpolice staff.“When you make the ultimate sacrificeyou deserve <strong>to</strong> be remembered,” BrianLouden said.• Commissioner Rob Robinson addresses the crowd alongsidethe heads<strong>to</strong>ne of Neil McLeod during the rededication. (Pho<strong>to</strong>courtesy of Mediapix).IT’S A BOB’S LIFE…By Rohan Stace• Local police officers mingled with family members at therededication. (Pho<strong>to</strong> courtesy of Mediapix).166
<strong>New</strong> Zeal<strong>and</strong> Police AssociationSeptember 2004Investing, property <strong>and</strong> diversificationThere is now a widespread perceptionthat falling house prices are about <strong>to</strong>wipe billions of dollars from the assetsof homeowners <strong>and</strong> inves<strong>to</strong>rs. Thisis of particular concern, as residentialproperty has become a very popular formof retirement savings, especially in <strong>New</strong>Zeal<strong>and</strong>.As in Australia <strong>and</strong> the United Kingdom,the amazing rise in houseprices in <strong>New</strong> Zeal<strong>and</strong> has anincredible similarity <strong>to</strong> pricebooms witnessed in other typesof assets in the past. Although thecycles in each country are ou<strong>to</strong>f-syncin their timing, thedownturn in the Melbourneapartment market islikely <strong>to</strong> soon haverepercussions forthe rest of Australia<strong>and</strong> eventually perhapsfor house prices in <strong>New</strong> Zeal<strong>and</strong>.While everyone can argue that what’shappening in their neighbourhood isdifferent, his<strong>to</strong>ry shows that bursting assetbubbles spread contagion far further thaninitially forecast.Learning from his<strong>to</strong>ryInves<strong>to</strong>rs <strong>and</strong> homeowners only need<strong>to</strong> look at the dynamics of the previousboom - the dotcom bubble of the late1990s - <strong>to</strong> determine how they shouldconsider reacting <strong>to</strong> the prospect of aforced devaluation of their wealth.The dotcom collapse dented inves<strong>to</strong>rconfidence in sharemarkets around theworld <strong>and</strong> also prompted decisions byeconomic policy-makers, which had theby-product of boosting investment inhousing.The poor performance of equity markets,the abnormally long duration of thebusiness downturn, <strong>and</strong> the corporateaccounting sc<strong>and</strong>als caused inves<strong>to</strong>rs <strong>to</strong>shift their focus <strong>to</strong> bricks <strong>and</strong> mortar.They quickly developed a preference forassets that they could manage themselves.The confidence in one type of asset wasdriven by the loss of confidence in thealternatives.Ironically, for many inves<strong>to</strong>rs, theunwinding of the first bubble becamethe justification for participation in thesecond bubble.Supporting economic growthThe second major driver was the responseof central banks <strong>to</strong> the developingeconomic risks that came from the slumpin sharemarkets <strong>and</strong> the nervousnessresulting from terrorism. Central banks,<strong>to</strong> varying degrees, <strong>to</strong>ok emergencymeasures <strong>to</strong> ensure that economic growthwas supported, even if it was from debtfundedconsumer spending.These emergency measures <strong>to</strong>ok the formof abnormally low interest rates, whichhave been maintained well beyond theend of the period of crisis. The bankingsec<strong>to</strong>r’s preference for lendingagainst real estate has channelledthis monetary stimulus directlyat property buyers. Highlyleveraged inves<strong>to</strong>rsshould be aware thatany withdrawal of thispreference is likely<strong>to</strong> be a long <strong>and</strong>painful process.The key lesson isthat any investment assetis likely <strong>to</strong> experience periods of under<strong>and</strong> over valuation as it moves from beingneglected <strong>to</strong> being popular <strong>and</strong> as itmoves from being unfashionable <strong>to</strong> highlyacceptable (either around the dinner tableor across the bank manager’s desk).The quick gain mentalityHis<strong>to</strong>rically, the typical response of <strong>New</strong>Zeal<strong>and</strong>ers following the collapse of anyasset price bubbles has been <strong>to</strong> resolve<strong>to</strong> get out earlier next time around. Asa nation of debt-dependant specula<strong>to</strong>rswe continue <strong>to</strong> look for the quick gains.Asset price bubbles are often seen asopportunities for participation rather thana risk <strong>to</strong> be avoided.Going forward, we recommend thebest approach for inves<strong>to</strong>rs is <strong>to</strong> buildportfolios with a mix of financial assets<strong>and</strong> real estate, which can ride out thecyclical fluctuations <strong>and</strong> smooth theoverall return.The fact that different types ofinvestments go through different cyclesshould be seen as an opportunity <strong>to</strong>spread risk. However, the typical <strong>New</strong>Zeal<strong>and</strong>er still has highly concentratedinvestments <strong>and</strong> often a high degree ofdebt.The sooner <strong>New</strong> Zeal<strong>and</strong>ers invest inquality <strong>and</strong> diversify, the sooner wecan start <strong>to</strong> deal with the problem ofretirement savings.To speak with a Spicers Adviser <strong>to</strong>dayabout your personal investment planplease call the Police Financial PlanningEnquiry Line on 0800 ON BEAT(0800 66 2328).Have those cheapairfares got youjumping withexcitement?Why don’t you check out Travelpacwhen you book your next trip?• Emergency Assistance 24 hours, 7days a week, anywhere in the world.• Comprehensive cover, that you <strong>and</strong>your family can trust - when you need itmost.• 15% premium discount for membersof Police Health Plan (this discount isau<strong>to</strong>matically included in the Travelpac ratingchart).Plus our commitment <strong>to</strong> providing you withexceptional, professional service.Check out our website:www.policeassn.org.nzOr call us 0800 500 122Mon - Fri 8am <strong>to</strong> 5:30pmYou’d be flipping-well mad not <strong>to</strong>!Need a 2005wallplanner for yourteam or station?Wait - don’t order one yet!Our A2 wallplanners are beingreproduced for 2005 <strong>and</strong> will be sent<strong>to</strong> your local Association committeefor distribution shortly.The planners note useful dates likePolice pay days, holiday home ballotperiods, when daylight savings timebegins <strong>and</strong> ends, Police memorial day,school term start <strong>and</strong> finish dates <strong>and</strong>when your 2.5% general pay increaseapplies from.167
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