Caroline Ritchie: Spare a thought for your shares

Caroline Ritchie

As your world snowballs to its annual inevitable festive conclusions, spare a thought for your shares.

While you drop mince pie crumbs on Mum's carpet and challenge Dad to a game of Violent Snap (calling "Snap!" is not enough, you have to aggressively claim it by slapping your hand down on the stack as fast as possible) remember your investments, out there in the cold.

All year long they have slaved away for you in the monetary coalmines, leaping over bracken and brush to make you wealthier, and here we are at Christmas, thinking of them not a jot. Little jokes aside, the last 12 months have been Another Good Year.

The NZX50 will finish in the green, again, somewhere in the region of 8 per cent, though not quite as flush as it was in September.

The biggie, the S&P500, nails a chunky 10 per cent at the time of writing. Large bunches of fund managers clear across the country are enjoying steak and martini lunches and buying new cars on the internet.

Their bounteous celebration stems not so much from just this year - even a beginner understands that one pheasant in the bag does not a great shot make you. It is the longer returns that are giving them the tingles.

Since those depressing days in March 2009, at the worst of the crisis, when I cried a lot in the bathroom at work and suspect a few of the boys did too, there has been a monster resurgence.

From that point until now, the NZX50 has gained 178 per cent. The S&P 500 has risen 230 per cent.

As we head into 2017, we are eyeballing the eighth straight year of this bull run. Not Trump, not Brexit, not the fact that half of Europe is bankrupt seems to make a dent. Not wars, or currency crises, or that the US will shortly hit a debt load of US $20 trillion ($20 trillion!) is having an impact, so far, on our glorious shares.

And with cash in the dogbox on low interest rates, you can see the lure of it all. Did your house double in value in eight years? (Not talking to you, Auckland, think the rest of us.)

Did your business? Your hourly rate? With each passing quarter, shares are attracting more and more cash from the sidelines. It's the old stone age village problem again - our desperation, hardwired into our brains, not to miss out when everyone else appears to be chowing down at the trough of easy money.

The plaintive questioning cry of every client is "How much longer can it go on?!?"

And so, in meetings, I put on my metaphorical purple cloak and get out the crystal ball that everyone thinks I own, and I tell them.

I pull out the biggest, most honest and fundamental line in the history of all investment markets, throughout all time, and I say, sometimes over-dramatically to get my point across, "Nobody knows!"

Always a mixed reaction.

Half massive relief - confirms suspicions, and half disappointment - high hopes were had for clairvoyance and thus the secret door to free profits.

I always make another point, too, wagging my finger like the girl Grinch of the sharemarkets - "The stocks won't love you back, either!"

So, enjoy your returns for what they are, for now, and have a very happy Christmas.

• Caroline Ritchie is a former AFA, sharebroker and 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.