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After months (or arguably 4 years) of build-up, Trump has been voted out of the White House, even if he and some of his most ardent supporters will not accept it. Biden will be inaugurated on the 20th on January next year, giving Trump only another 60ish days in office. This time is called the 'Lame Duck' session, as Trump will be leaving office soon so had reduced ability and influence. Biden has already begun to organise his transition team, although Trump’s administration is refusing to recognise Biden’s win and release the money set aside for the transition [1]. This reduces Biden’s ability to prepare for becoming president and is preventing him from accessing key information about national security. A smooth transition between presidents is important at the best of times, but even more so when a country is facing a major crisis such as SARS-CoV-2. The U.S. has now passed 11.2 million cases and ¼ of a million deaths [2]. Daily new cases hit an all-time high at 188,000 and the 7-day moving average of deaths can be seen increasing. Worldwide, records are being set with 54 million cases, 660,000 daily cases, 1.3 million deaths, and over 10,000 daily deaths, with no signs of slowing down. There are now 10 countries with more than 1 million cases, of which 5 are European- France, Russia, Spain, the U.K., and Italy. Despite these rising numbers, people are still breaking and even protesting restrictions [3, 4, 5]. However, in positive news, Pfizer has announced that their vaccine candidate is 90% effective in preventing infection by SARS-CoV-2, in the initial analysis [6]. No serious safety concerns have been raised for this vaccine yet. While this is good news and hopefully a sign of things to come, expectations must be tempered with several points. First, 90% effectiveness is very high, and this number may fall (although it may also increase) with further analysis. Second, the vaccine must be stored at ultra-low temperatures of -70 to -80°C, which brings up significant problems in the transport and storage logistics. Third, the vaccine requires two doses to be effective, with protection being properly achieved 28 days after the initial dose. Fourth, the study only indicates that the vaccine has an efficacy rate above 90% at 7 days after the second dose but does not indicate how long the protection last for. Finally, the production of the vaccine may not be easily scaled up to produce enough for the world, or even many countries, as the technology used is new. Despite these concerns, the vaccine news has cause many beaten-down stocks to rise on the hope that the world can start returning to normal and, by the same token, caused many of the ‘stay-at-home’ stocks to fall. This news has been a massive boost to the US industrial/defensive stocks and to Europe as a whole. The STOXX 50 Europe index had a 7.12% gain, the FTSE 100 gained 6.88%, and the Dow Jones gained 4.08%. On the flip side, the tech-heavy NASDAQ fell 0.55%, pulled down by the stay-at-home stocks such as Netflix. In NZ, the NZX 50 was up 2.9% for the week, with cases of community transmission of SARS-CoV-2 being found in Auckland causing fears of restrictions. Initially, the case was of an unknown origin and the government shutdown the Auckland CBD [7]. However, the case was quickly linked through genomic testing to the border, allowing the CBD to be reopened and the contract tracing to be performed thoroughly. In my portfolio, the biggest losers were Nvidia (-11%) and Alibaba (-16%). Alibaba fell after the Ant Group’s record-setting IPO was halted by Chinese regulators, causing investors to fear increased regulation [8]. On the upside, NZ energy companies Meridian and Mercury increased by 10% and 9%, respectively, and Mainfreight and Steel and Tube increased by 10% and 8%, respectively. Overall, my portfolio increased by 3.3% for the week. Short Roundup ASB and ANZ banks in NZ have reimposed Loan-to-Value Ratios (LVR) restrictions on lending [9]. This comes after the Reserve Bank of New Zealand (RBNZ) removed the LVR due to the impact of SARS-CoV-2. However, due to the boom in the property market, these restrictions are being reimposed to attempt to it cool down. Dominic Cummings- U.K. PM Boris Johnson’s top aid, former head of the Vote Leave campaign, and an incredibly divisive figure- has left No. 10 Downing Street [10]. This follows the resignation of Cummings’ right-hand man and leaves something of a power vacuum that could significantly change the power structure of the U.K. government. U.K. GDP grew a record 15.5% for the third quarter, but the GDP is still 9.7% below where it was at the beginning of the year [11]. In the U.S., the unemployment rate fell to 6.9% in October, a decrease of 1% from September [12] There have been cases of SARS-CoV-2 transmission from humans to minks and then back to humans [13]. Not only this, but the virus manages to mutate in the mink population and could, potentially, result in less effective vaccines. References [1] B. Klein, "Trump agency tasked with transition process has yet to recognize Biden's victory," CNN, 10 November 2020. [Online]. Available: https://edition.cnn.com/. [2] Worldometer, "Unitest States Coronavirus," Worldometer, 14 November 2020. [Online]. Available: https://www.worldometers.info/. [3] A. Ledsom, "New Europe Travel Bans (And Protests), As Covid-19 Surges," Forbes, 8 November 2020. [Online]. Available: https://www.forbes.com/. [4] J. Kelly-Linden, "Arrests after anti-lockdown protests sweep through Bristol and Liverpool," The Telegraph, 14 November 2020. [Online]. Available: https://www.telegraph.co.uk/. [5] France 24, "France records sharp rise in Covid-19 deaths as Europe tightens restrictions," France 24, 14 November 2020. [Online]. Available: https://www.france24.com/. [6] Pfizer, "Pfizer and BioNTech announce vaccine candidate against COVID-19 achieved success in first interim analysis from phase 3 study," 2020. [7] N. Jones, "Covid 19 coronavirus: Contacts of 'weak positive' case who lives by Auckland student urgently traced," New Zealand Herald, 15 November 2020. [Online]. Available: https://www.nzherald.co.nz/. [8] J. Yang and L. Wei, "China's President Xi Jinping Personally Scuttled Jack Ma's Ant IPO," Wall Street Journal, 12 November 2020. [Online]. Available: https://www.wsj.com/. [9] Radio New Zealand, "Evening business for 13 November 2020," YouTube, 13 November 2020. [Online]. Available: https://www.youtube.com/. [10] Channel 4 News, "Dominic Cummings leaves No 10 after days of public infighting," YouTube, 14 November 2020. [Online]. Available: https://www.youtube.com/. [11] Channel 4 News, "UK chancellor Rishi Sunak admits: 'We are spending a lot'," YouTube, 13 November 2020. [Online]. Available: https://www.youtube.com/. [12] U.S. Bureau of Labor Statistics, "Unemployment rate falls to 6.9 percent in October 2020," 12 November 2020. [Online]. Available: https://www.bls.gov/. [13] A. Murray, "Coronavirus: Denmark shaken by cull of millions of mink," BBC, 11 November 2020. [Online]. Available: https://www.bbc.com/.

What a disappointing result. After a few days of waiting, at the very least Biden is currently leading in both the overall vote count and enough states to get the required 270 electoral votes to win the presidency. At the time of writing, The Associated Press has called 264 electoral votes for Biden and 214 for Trump. Among Trump’s votes are Florida and Texas, which people had thought might flip to the Democrats. Also, it looks as if the House will remain in the Democrats control, while the Republicans may still control the Senate. This is a very different situation from the ‘Blue Wave’ people were thinking would happen when looking at polls before the election. However, Trump and the Republican campaign are still throwing everything and the kitchen sink to prevent Biden and the Democrats from winning. This includes attacking the legitimacy of the voting system and using lawsuits in the states of Georgia and Michigan in attempts to stop them from counting votes (the Michigan case was tossed out and the Georgia case was dismissed) [1]. Not only this, but due to how close the results are in some states, recounts are, or likely will be, done to confirm the results are correct (such as Georgia, Michigan, Pennsylvania, and North Carolina) [2]. Opinion- While I do not often present a personal view, these results are horrifying. Just under half of the voters in the US are willing to overlook all the terrible things Trump has done. While a Trump win or even a Republican win in the Senate (thus a power split between the Democrats and Republicans), may be good for the US economy and the stock market in the short-term (less regulation and no changes to taxes), in the long-term it will cause the US to fall behind in many key future sectors, such as renewable energy. Aside from the election, SARS-CoV-2 still rages [3]. Globally, there have been almost 50 million cases and the daily case rate is now above 600,000, with the US making up over 100,000 of those. The US has reached 10 million cases and is adding over 1,000 deaths per day to their total of over 240,000. France has the second-highest daily new cases at approximately 60,000 a day, with daily deaths around 400. To go along with the increase in daily cases, the world is seeing the daily deaths tending exponentially upwards as well. On the Brexit front, a deal is looming, while the final deadline looms larger. The transition period will end on the 31st of December, at which point the UK will be truly separated from the EU unless a deal is done. The UK and EU are still talking about a deal and progress has been made, but there are still reportedly major differences between them [4]. Markets around the world are up for the week. Of the indices I follow, the NASDAQ is up the most (9%), on tech hopes that the power split in the US will ensure there is little-to-no extra regulation. Other indices are up as the election continues, with each update reducing volatility and giving investors more of an insight into what the next four years will look like. References [1] M. Sherman and J. Gresko, "With counting winding down, Trump team pushes legal fights," 6 November 2020. [Online]. Available: https://apnews.com/. [2] P. Johnson, "Donald Trump has called for recounts in the US election. Here's how they work in every crucial state," ABC News, 7 November 2020. [Online]. Available: https://www.abc.net.au/. [3] Worldometer, "COVID-19 Coronavirus Pandemic," 31 October 2020. [Online]. Available: https://www.worldometers.info/. [4] S. Payne and J. Brunsden, "Johnson to take stock of Brexit talks in call with von der Leyen," Financial Times, 7 November 2020. [Online]. Available: https://www.ft.com/.

Something different today, I recently attended a seminar on investing in a low-interest-rate environment, presented by the financial services stalwart- Martin Hawes. Martin is an Authorised Financial Adviser, the chair of the Summer Investment Committee (a KiwiSaver scheme), member of the Board of the NZSA, writer, and a respected columnist, so he has significant experience and knowledge. The Summer Investment Committee decides what weightings different asset classes (NZ equity, global equity, fixed interest, etc.) a portfolio should have. Martin’s talk started with a very timely discussion on Trump’s election four years ago. On the night of Trump’s election in 2016, Martin told the Summer Investment Committee they should reduce their equity (shares) weighting and move to lower risk assets such as fixed-interest and cash. This decision was based on Trump’s unlikability. However, other members of the committee convinced Martin to hold off on reducing the equity weighting and even increase the global equity weighting. Martin now admits that his initial reaction was wrong and increasing the global equity weighting was the right move. There are many reasons I find this story so impactful- - I admire Martin’s humbleness in repeating this story and being upfront that this was a mistake. This is something I try to do with my Journey. - This shows the importance of talking with others and getting a diverse range of views. As you want to have a diverse portfolio, you also want a diverse source of information and range of options. - It also shows the benefit of taking the time to think critically over decisions (sometimes). The aim of Martin’s presentation was to help people plan for retirement. One main point Martin made that really resonated with me, was that Kiwis put too much importance on owning a nice house. Houses are likely to be the most expensive asset you ever own and reduce your ability to enjoy life. By reducing how much you spend on a house, the more you will have to spend on other things that matter- travel and leisure, entertainment, etc. For investing in low-interest-rate environments, Martin made five main points- - Interest rates are lower for longer. And when they go back up, they will not be going up to the highs of the 1980s, maybe not even as high as the early 2000s. - You cannot default to putting your money into term deposits, as interest rates are too low. - Diversification is key. - Portfolios require the right investment risk. - KiwiSaver is a good option. This figure, from multpl.com, shows the long-term US 10 Year Treasury Rate. The mean is 4.5% and so it can be seen the last few decades are the outliers, and the rate will likely revert to the mean over time. Another point Martin made was that people too often end up putting all their money into one asset class. This is something that I may be guilty of, as shares makeup 72.5% of my portfolio and has been trending up, while fixed interest makes up most of the remained at 19%. The problem with this is that no matter which asset class you are in, there will always be a crash at some point if you are in for long enough. Over the years, there will be a range of events that affect different asset classes differently, including recessions, depressions, booms, etc. Thus, diversification across asset classes is key, with the exact weighting depending on your risk profile. For younger people, diversification is less necessary due to their long investing timeframe, while for those in or near retirement, it is key to ensuring a stable portfolio. To get your risk profile, got to https://sorted.org.nz/. Martin gave a list of the best assets to hold in different events- This does not mean you should change your holdings if one of these events occurs, it just highlights the importance of diversification. Martin gave a couple of macro views- - Countries have ageing populations. As people age, they tend to spend less, consume less, and save more. This reduces demand for goods and can be a drag on the economy. - Property markets in New Zealand are going up, against all common sense. - Crises accelerate trends- automation, working from home, etc. Some general takeaways I got from Martin’s presentation were- - People who are working should have backup savings of 3-6 months of expenses. People who are retired likely require 1-2 years of expenses in savings. Something that came out of the pandemic was that less than half of U.S. citizens had $1,000 in savings. - KiwiSaver is a good option for people who have less than $300k, but if you are lucky enough to have more, you should look for a bespoke solution. - International equities provide access to sectors that you will struggle to get in NZ, such as pharmaceuticals, high-tech, and biotech.

Our Founder My name is Daniel and I started Engineering Finance as a Chemical and Process Engineering student in my final year at the University of Canterbury. During my time at university, I developed advanced Excel and computing skills and use Excel on a daily basis for even the most basic tasks. ​ While at uni, I got interested in finance, politics, world news and the stock market. Through my personal experiences and conversations with my friends, I noticed that many young people are not well informed when it comes to their finances. ​ Thus, I made Engineering Finance. It is my aim to help people improve their financial literacy and live a better life. The spreadsheets on this website are suitable for those with no Excel skills; I try to make them all as user-friendly and automatic as possible. ​ I hope that through this website I can help people to achieve financial independence and improve their quality of life. ​ Daniel, 2020 How I started Why I started Our Values The purpose of this site is to help everyone learn how to become more financially stable and independent. We believe that everyone should have the tools they need to live a better life, and that money is one aspect of that. ​ As an engineer, Daniel has a passion for quality and professional information. This is why you will see references listed in almost every article, so you can find the sources if you wish to read more into the story. ​ We also believe that people need to be more open about money. The more people talk about money, the more effective they can become in their handling of it. We think this is especially important when discussing finances with children and teenagers, who need to be well prepared. This is why you will find posts from Daniel showing exactly how much money he has invested and in what companies/funds. ​ We try to make the site as inclusive as possible for everyone. However, if you are a racist, sexist, bigot, etc., you can leave. We do not want, nor need, you here. GET IN TOUCH Have some feedback or want to make a suggestion? We'd love to hear from you. Get in touch by email, text or Facebook daniel@mak.gen.nz 02102431270 Find us on LinkedIn and Twitter

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Investing Daniel Mak, 2020 Investing is many things. Investing includes research, putting down money, knowing when to sell or get out, and much more. There are many methods to invest from the most complex- derivatives- to the most basic- hard cash. ​ That's right, even if you might not normally think of it as an investment, holding cash is a form of investing. By holding cash, you are effectively making an investment with a 0% interest rate and zero fees. This means that when you eventually want to use the money, the amount you put away will be exactly the amount you have. The problem with this is that will cause the 'real' value of your money to go down, so this is a no-risk, negative-reward investment. inflation ​ This is where stock market investing comes in. Stock market investing involves buying (or units in a fund). This means that you own a piece of the company and if the company performs well, you get part of the profits. However, this is a potentially risky business (please excuse the pun). If the company performs poorly, which could happen for any number of reasons, then the value of the shares may go down. This doesn't necessarily mean you have lost money, as the value of the shares may go back up if the company starts performing better. This makes stock market investing a high-risk, high reward investment, with the hope that by taking on this higher risk, you manage to beat inflation and grow your wealth. shares in a company In summary, investing is effectively a trade-off between risk and reward. By sacrificing the money you have now, you increase your potential future wealth, but also have a chance to lose money. There are many steps you can take to reduce the risk and increase your chances of coming out on top, like company and market research and knowing your limits. Terms and Phrases Shares