Caroline Ritchie: Stay tuned for sanity in US election

Caroline Ritchie, Hawke's Bay Today columnist. Supplied photograph WAG 21Dec15 - Caroline Ritchie is a former AFA, sharebroker & portfolio manager. She runs Investment Stuff, an investme

"What do you think will happen, Ms Ritchie, to the markets, if Trump gets in?" It peppers my inbox and client discussions, and lingers on the minds of those trying to make decisions.

Well known New Zealanders in the financial commentary sphere have been selling up and writing about it. The pages of those respected journalistic outlets, the Washington Post and the New York Times, are strewn with identikit query.

First, my personal, cynical viewpoint. Those in the know, the big fish, the shadow bankers, the very well connected, have already moved their money. They have intel, spy gossip, high-up stuff, that has told them what they wish to know.

You and I cannot ever guess what this is, and if it sounds a bit conspiratorial, good, because that is how it works.

The secret societies and lodges and deep veins on Wall Street will not be gnashing their teeth as we are, because they have already set up their playbooks for the event.

These are the people who control the way money works on this planet and their behaviour perpetuates the belief that share markets are one-sided.

We, in contrast, sit at home watching shows about housewives and cannot HOPE to achieve the same level of data.

In the shiny textbooks I read at university, the price of a share should reflect all the publicly available information pertaining to it.

In reality, share prices reflect public, private, inside, false rumour, and manipulative information.

Certain groups always have better access. They will act on this advantage and make money not available to lesser beings.

It is not fair and not particularly legal, and members of this crowd may or may not go to jail, in time, depending on who they bribe, but that is the WAY IT IS. So, there is that view.

The second view, the deep booming voice of reason, suggests that it probably does not matter what happens in November. I want to be very clear that I mean this ONLY about the markets.

What might happen to women and minorities and those in need scares the pants off me.
The one caveat here is if something goes badly wrong, such as a nuclear event.

I would like to suggest to shareholders that in this scenario equity valuations are going to be of little use, as we go back to the stone age and subsist in a horse-and-cart lifestyle once more.

But before we get hibernating in the investing bat caves; the reason it might not matter in November is shown in history. If you take a peek at 100 year chart of the US stock market, it marches steadily upwards, lower left to upper right. As do all the other developed economies.

Look at the heinous catastrophes that have happened during this time. World wars, depressions, mass genocide, financial collapse.

When you think about the incredible events of the last century, you might wonder how the markets ever survived. But they did, and they shall continue to do so.

And, if you take the sensible perspective of buying them, in index form, for the long term, because that is what reasonable science tells you, then ... what are you worrying about?

Aside from the dissolving fabric of society in the world's largest superpower, the resulting civil unrest and an international diplomacy crisis ... Good news! Things can go two ways in an election. Let's stay tuned for sanity, but prepared for the opposite.

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