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Home / Hawkes Bay Today

Caroline Ritchie: Don't panic over new president

By Caroline Ritchie
Hawkes Bay Today·
13 Nov, 2016 06:00 AM4 mins to read

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Caroline Ritchie

Caroline Ritchie

Reporting in from Hawaii this week. Well almost. Got back yesterday, but let's suspend belief a little, we're talking about America after all, and pretend Ms Ritchie is still on holiday.

The palm fronds sway and the boutiques glitter and it is all so easy to believe that everything is sweet as a nut here in the USA.

Sure, there is a bum on every park bench; the long-term homeless who reach out for a dollar as you pass.

And hey, maybe it strikes you as a quirk that the waitress' boss, if you do not tip her, will deduct that "missing amount" from her pay.

What about the cleaning lady, 68, a US citizen, who hasn't had a salary raise in 8 years (I know because I asked) who relies on the small change we leave on the kitchenette counter?

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Just another oversight by those big old institutions in the land of liberty? Freedom for whom again? CNN blared its wild polls in my room while I took midday heat refuge, but every single taxi driver had been busy telling me exactly why they were voting for Donald Trump.

So when I stood in the arrival hall back at Auckland International, along with hundreds of other unusually quiet people as the final result of the election was announced, it did not come as a total surprise.

I wasn't particularly happy about the largest one-day closing loss on the NZX 50 since 2008, and I had a deeply unsettled night as shares crashed manically in my dreams, but I was not, no, in shock.

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I wrote a while ago about what to do with your investments in the event of a such a Presidency, (nothing, carry on as usual), and I wish to re-iterate this same message now.

Firstly, no man can predict the future and has never been able to. You can shape destiny in your personal life and belief will take you far, but when it comes to bending stock markets to political events, your superpowers and mine come to an end.

The past three days, excepting the very first hours, have proven a good example.

The exact opposite of what all the talking heads and yapping jaws predicted up there in the commentary boxes has occurred.

Plunging into depression? More like all time highs. Run for the hills? Well, they are filled with gold and coal and oil, which have been given a resurgence, so forget sprinting over to them, simply buy them all up, if you are a commodities dealer at JP Morgan.

For everyone else, this is you and me, folks, we stick to the plan, which in my view should be pretty unexciting. Why? Because it is impossible to tell what the reaction will be to future events. Stocks have never been so irrational.

You can't time or tame them, so save yourself the energy. The unexciting ideas keep on winning because they do not pretend to be things that they are not.

They make the market return, whatever it might be, every year, and hand it over to you. The gambler's road, (or the trader's desk, take your pick), is certainly that less travelled by. And once in a blue streak that may make all the difference.

But this is not poetry class, it's your money, and you want a nice, wide, well-researched highway in times of trouble. Get on it and stay there.

*Caroline Ritchie is a former AFA, sharebroker & portfolio manager. She runs Investment Stuff, a sharemarket based investment coaching service. Visit her at www.investmentstuff.co.nz. This column is not personalised financial advice

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