What I have decided to do...

So, at the moment with my remaining investment cash, I have decided to place a limit order on buying more FSF (Fonterra Shareholder Fund) shares. The reasons I have done this are many;

• Fonterra are a strong company with a revenue in 2024/25 of $22.8 billion

• The 9.5% yield is sustainable

• They have a dividend reinvestment plan

• There is no substitute for additional income sources

• I will take advantage of the market if it drops

I had thought about putting the money into Hatch and splitting it between Rocket Lab and TMC (the Metals company). Both of which would be speculations. Rocket Lab is the NZ company run by Peter Beck, that delivers cheap space shuttle payloads to satellites. The Metals company is engaged in exploring for battery metals in the oceans. Both have had tremendous share price growth in the past year.

I may end up regretting not buying Rocket Lab, but every time I think of making a speculation, I come back to SMCI, which I ended up making a 50% loss on earlier this year. Or I think of Fisker, which I doubled my money on a few years ago, but is a company that has recently filed for bankruptcy. I think ultimately with speculations, it comes down to luck. Either you get swooped up in the euphoria and buy at the wrong time, like with SMCI. Or you somehow manage to get your timing right and get out before the company goes bust, like with Fisker.

Fonterra has been facing a lot of backlash in the NZ news lately, with the high price of butter and fertiliser nitrogen leaching into waterways. But at the end of the day, the global consumer demand for dairy products remains very high, And NZ needs Fonterra, they are our largest exporting company by some margin. Fonterra have also recognized in the last few years that any deviation from their core business of exporting bulk NZ milk powder, has been negative to their bottom line. So, they are going through the process of divesting themselves from their overseas operations and consumer brands. Their Uruguayan venture was divested from some time ago, their Chinese farms are being divested, and the Anchor and Mainland brands will shortly be sold off. Focusing on their core operational efficiency, will lead to a more streamlined and profitable business.

Patience is a crucial component in any profitable investment strategy, and this will also be the case with my Fonterra limit order. It may be some time before my buy order can go through. But I have to wait and bide my time. I anticipate that there will be some sort of market correction in the 2nd half of this year, and with my FSF limit order, I know that I will be taking advantage of the market weakness when it comes.