News


Why You Should Forget the Pecking Order at Work!

Following a weekend that saw New Zealand sporting teams reign supreme, this article from Andrew Nuttall, which ran in last month’s local law society publication ‘Canterbury Tales’, seems particularly relevant!

A few weeks ago, I had the pleasure of hearing Wayne Smith speak about his rugby coaching career and some of the factors that had contributed to the All Blacks successes.  He cited a study about Super Chickens which led me to Margaret Heffernan’s Ted talk.

Margaret Heffernan talked about an evolutionary Biologist at Purdue University named William Muir who studied chickens.  He was interested in productivity, which I think is something of a concern to us all, but it’s easy to measure in chickens because you just have to count the eggs!  He wanted to know what could make his chickens more productive, so he devised a simple experiment.  Chickens live in groups, so first of all he selected an average flock and left them alone for six generations.  He then created a second group comprising the individually most productive chickens. The flock of super chickens was bred using the most productive birds in each generation.

What did Muir discover after six generations?  The first group of “average chickens” were doing just fine.  They were all plump and fully feathered and egg production had increased dramatically.  Sadly the second group of “super chickens” had not done so well. All but three were dead as many had been pecked to death.  The individual “super chickens” had only achieved their successes by suppressing the productivity of other chickens.

Margaret Heffernan, a successful CEO, entrepreneur, writer and speaker contends that over the last fifty years many organisations and some societies have been run along the Super Chicken model.  Too often it has been assumed that success was achieved by picking super stars, the brightest people, and giving them all the resources and all the power. All too frequently the result has just been the same as in William Muir’s Super Chicken experiment.  Aggression, disfunction and waste.

Margaret Heffernan believes that the most successful teams do not necessarily have members with the highest individual IQ’s or the highest aggregate IQ.  She suggests that the most important ingredients to creating successful organisations are groups that have a high degree of social sensitivity and empathy towards each other. Successful groups give equal time to each other so that no one voice dominates, but neither are there any passengers.  

What can we do in the workplace?

  1. Create a culture of helpfulness and get to know each other.
  2. Ban coffee cups at desks and hang out in the office cafe and talk to each other. Synchronise coffee breaks to help facilitate.
  3. Look for people who are outstanding collaborators and build teams where everyone matters.

Franklin D Roosevelt once wrote.

“Competition has shown to be useful up to a certain point and no further, but co-operation, which is the thing we must strive for today, begins where competition leaves off.”

 


October is Carbon Saving Month at Cambridge

Even though we all know we need to do more to help reduce waste and carbon emissions in our work places, often nothing happens until some brave, committed soul steps up.  In our case it’s Senior Paraplanner Georgie Lang who has taken the lead – and is doing a superb job in helping ensure we all ‘walk the talk’.

Georgie’s commitment (and a little bit of nagging!) have ensured that we now all use our own coffee mugs, not single-use takeaway cups, when we pop down for our mid-morning caffeine fix at our favourite local café.

Now she’s taking us to the next level by making October Carbon Saving Month at Cambridge Partners, starting with how we get to and from the office.

“When I started looking into what areas offices can look at terms of sustainability, one of the key aspects in terms of reducing our carbon footprint is how people get to and from work,” she explains.  “So I talked to the team and we thought ‘let’s have a go at seeing if everyone can make some changes for the month of October’.”

Georgie has set up a Commuting Challenge Board so staff members can track what they’ve been doing.  “Many of us are ditching our cars and travelling to work by bus or bike, or car-pooling.  We’re only into the second week, but interest is definitely growing.”

So committed to sustainability is Georgie that she has also started taking home all the office’s organic waste so it doesn’t just go into the landfill with everything else.  “Not such an easy task when you’re travelling by bus!” she says with a laugh.

Happily, when Georgie looked into what could be done to reduce energy use in our building, Te Uruti, the answer was ‘nothing’.   That’s because the building, with its heat exchange system and photovoltaic panels, is already exceptionally energy efficient.

 


Second Quarter Market Update Released

Another three months have flown by, which means it is time for another one of our Adviser Scott Rainey’s much-anticipated quarterly market updates.

In this informative video you’ll learn:

  • Why New Zealand isn’t just a great place to live, but the NZ Sharemarket has also been good place to invest
  • How two record OCR lows in a row may not be the end of interest rate drops
  • Why the last 12 months have been very much a year of two halves, and what this has meant for investors
  • Plus plenty more interesting, informative and useful information

So grab a coffee, take 12 minutes, and have a look.


Is Your Will Up To Date?

As a regular contributor to the Christchurch law society magazine, one of our Directors, Andrew Nuttall, has recently written a thoughtful article about wills.
Although aimed primarily at the legal profession, there is some great information here for all of us on a topic that, although none of us really want to think about it, is vitally important for us and those we will leave behind.

Over the last 30 years I have met with many prospective clients who do not have an up-to-date will. How much family tension have you seen that could have been avoided if clients had taken more care with their estate planning?

We have all come across people who need a will but are reluctant to contemplate their demise. We are all, however, going to need a will and having a relevant one makes it easier on those left behind. The inability to admit that their death will occur cannot be the only reason many are reluctant to have an up-to-date will. It has to be something more than that.

Historically, some lawyers have often given wills away for nothing – a mistake in my opinion by the way.  Has this created a reluctance to pay for what is a valuable service?  Why is it that people fail to address their estate planning appropriately?

» Have you subconsciously determined the objections to paying for a will are too pronounced to justify spending sufficient time with your clients to help them think carefully about their estate planning?

» Are your clients failing to recognise the value and peace of mind they will gain by having well-drafted wills and estate plans?

» Are you not recognising or underestimating the value and peace of mind you provide your clients by encouraging them to think about their estate planning?

» Has the importance of having an up-to-date and well-drafted will been under-mined by offers of “free” wills?

Wills are one of our most important documents, we are all going to need one.

Below is a list of, what I hope are, helpful suggestions that I have picked up over the years from estate planning lawyers:

» Have your client list their assets and liabilities, family members and any friends or organisations they might want to recognise – this may help them realise quite why they do need a will.

» Ask your client the following question. “If you had passed away yesterday what would you want to see happen to your assets tomorrow?” There is nothing like confronting your own mortality to get us thinking.

» Ask your client who would be the best people to be responsible and ensure their assets ended up in the right hands and their wishes are implemented? The prospect of their incompetent uncle making decisions can create some intent.

» Do not post out a draft will and wait for it to be signed and returned. Many people have neither the ability nor inclination to read a legal document – it ends up sitting on the kitchen bench, unsigned. Why not, at the conclusion of your initial meeting, make a time to meet again – a call to action and a commitment to do something all in one?

» If your client is reluctant to sign the newly-drafted will, urge them to do so as it is likely to be better than their existing, out of date, will or the non-existent one.


Where will you be in 25 years time?

Imagine publicly making a 25-year commitment to something you’re passionate about.  How would your mindset change?  Peter Diamindis – founder and chairman of the X Prize Foundation, co-founder and executive chairman of Singularity University – shares his views on how you can tap into the power of long-term thinking to make a bigger impact.

In 2013, I was at an event, getting ready to go onstage and introduce Abundance 360 to a group of entrepreneurs and marketers.

Dan Sullivan, co-founder of Strategic Coach and my personal coach, pulled me aside. “Peter,” he said, “if you really want to make this stick, why don’t you tell them you’ll do it for 25 years?”

Like so many great ideas, it instantly clicked. A360 should be a 25-year journey, a countdown to the Singularity.

Ten minutes later, I went onstage and introduced A360 as “my 25-year-long CEO program for abundance and exponentially minded entrepreneurs.”

The instant I publicly did that, I experienced a game-changing mindset shift. It changed the way I thought about my life. What I was committed to. Who I needed to be in the world.

Doing the math, a 25-year journey would culminate around 2038.

What will the world look by 2038? It’s pretty extraordinary, especially when you consider the exponentially growing technologies my team and I are following.

Ubiquitous AI, quantum computing, brain-computer interfaces, blockchain technologies, synthetic biology and global gigabit connectivity, to name a few. All these, individually and in convergence, will create more wealth in the next 10 years than in the past century, and transform every industry and every company.

What will these technologies enable after 20 doublings of exponential growth? Everything will profoundly change.

The Power of Long-Term Thinking

Ultimately, your vision is a byproduct of your mindset.

With a scarcity mindset, you become protectionist and limited in your thinking: “I can’t afford to think about the future — I’ve got to worry about what’s going on right now.”

An abundance mindset enables you to think long-term: “The future is better than you can possibly imagine, and I’m going to be investing because I’m looking at 10x growth.”

Your mindset matters. Doing big, risky things is difficult — and it’s even harder if you lack stability in your life. Paraphrasing my friend Tony Robbins, we need to have certainty in our lives before we can withstand uncertainty.

When you get clarity about your mission over a 25-year timeframe, you give yourself stability — and permission to dream even bigger. You’re able to enjoy current progress, instead of feeling stressed to immediately achieve your final goal.

A360 has become a central organizing principle in my life. I spend all year getting ready for the annual event — and my focus is delivering context on the future. I help members answer three questions:

  1. What technologies are going from deceptive to disruptive in the coming year?
  2. What is your Massively Transformative Purpose & Moonshot? (i.e. What is the impact you will make in life as you go from success to significance?)
  3. How will these technologies transform you business and what do you do about it?

I believe we’re living in the most extraordinary time ever… and that the future is coming faster than most of us realize.

Your ability to anticipate change and make better, faster decisions is critical in the decades ahead.


Make A Noise For The Boys This Sunday

At 11am on 11 November 1918, after four years of brutal conflict, the First World War finally came to an end. When news of the Armistice reached New Zealand it was met with widespread thanksgiving, celebration and a lot of noise.

“There were songs and cheers, miscellaneous pipings and blastings, and tootings and rattlings—a roaring chorus of gladsome sounds.” – Armistice celebrations in Wellington described in The Evening Post, 12 November 1918

100 years on, organisers of the Armistice Centenary Commemorations want to recapture this energy.

On Sunday 11 November, a two minute silence will be observed at 11am to acknowledge the immense loss and hardship endured throughout the war. Following this, they encourage organisations and communities to gather whatever ‘instruments’ they have at hand, and help create a roaring chorus of jubilant sound that once again celebrates peace and hope for the future.

The brief is wide open, you could ring bells, sound sirens, or toot horns. You could sing a waiata, beat drums or play music. You could incorporate something upbeat into an event you already had planned or do something stand alone. Anything goes because all that really matters is that we remember those who paid the ultimate price for us 100 years ago.


Cambridge (Partners) goes to Oxford

Cambridge Partners Principal Adviser, Jacob Wolt, is on his way to Oxford University to take a major role in the annual conference of GAIA (The Global Association of Independent Advisors).  This is a hugely significant event on the international financial scene and will be attended by major, independently-owned investment advisory firms from around the world.

The global conference will be held this Wednesday and Thursday and, on Friday, Jacob will be chairing the Australasian session, which is traditionally attended by member companies from other parts of the world as well.  “It is an enormous honour and privilege to be chairing this event,” Jacob explained on the eve of his departure.  “GAIA firms are identified by their independence and their over-riding commitment to fiduciary excellence and to ensuring they always put their clients’ needs first.  So these get-togethers are always an opportunity to learn from the world’s best and to reinforce our commitment to unified global thinking.”

Cambridge Partners are the only company in the South Island with GAIA membership, and one of only two New Zealand wide. GAIA  membership is limited to those companies who meet stringent standards of total independence and transparency in wealth management practices.  GAIA member companies must also be certified by CEFEX – an equally demanding independent global assessment and certification organization which provides an independent recognition of a firm’s adherence to a defined standard representing the best practices in the industry.

Everyone at Cambridge Partners would like to wish Jacob safe travels and all the best for this demanding and prestigious role – we have no doubt he will do us all proud.


Calling Today’s – and Tomorrow’s – Seniors

It’s not too late to have your say on the development of a new strategy to address the needs of our ageing population.
Between 29 June and 24 August the Government are consulting with people throughout New Zealand to find out what matters to you.
The last strategy was developed in 2001 and since then people are living longer and healthier lives. People of all ages are becoming more concerned about things like housing, secure employment and climate change.
While the new strategy will reflect many known changes and challenges, policy-makers want to know what today’s seniors think. They also want to hear from tomorrow’s seniors, people aged in their 40s and 50s now. After all, it’s projected that by 2036 one in four Kiwis will be aged 65 and over.
What are your ideas and concerns?  Your priorities and expectations for how you live now, and how you want to age in the future?
Submissions close on 24 August so there’s still time to give your views. If you’d like to be involved, or make a submission, go to the website: www.superseniors.msd.govt.nz/ageingpopulation The Government are welcoming comments and contributions from individuals as well as more formal submissions.

Andrew Nuttall – more than just a great Financial Adviser!

We’re a pretty sporty lot at Cambridge Partners, and noone more so than one of our partners, Andrew Nuttall. Andrew has been playing cricket since before he started primary school thanks to his grandfather and uncle, who were both cricket mad.   “My mother often talks about how many great people I’ve met through cricket and how many fantastic experiences I’ve had, and she’s right” he recalls. “What’s even more special is the fact that it’s still happening, even though my school years are now a long way behind me!”

There was a point, however, when cricket had to take a back seat for Andrew.  The arrival of his twins meant the Nuttall household was home to four children under five years old.  Not surprisingly, Andrew’s weekly cricket commitments were somewhat curtailed in the short term!  However his love of cricket continued, and was passed onto his children.

Considered one of the best age group cricketers in New Zealand, Andrew has just left for a cricketing tour of England.  “This is going to be a fantastic trip,” he explains.  We are going to historic places like York, playing a game at Ripley Castle within the grounds there, then traveling down to Cambridge and on to Windsor where we play at Eton College.  Then — every cricketer’s dream — we get to play at the nursery ground at Lord’s and then have a dinner there, so that’s very special and something I never thought I’d get the chance to do.”

A measure of just how good a cricketer Andrew is, is the fact that not only did he play for the winning Canterbury Over 60s team in the national tournament last year, and also for the New Zealand over 60s team against several regional Australian teams in 2017, but this year he is also in the New Zealand over 50 team!   They will be playing in a World Cup from mid November to early December which includes eight teams from around the globe including England, Australia, Pakistan, Sri Lanka and the West Indies.

“Those are some pretty high powered teams, which will include some very fit and motivated ex-internationals.  But we’re not letting that daunt us, we have a goal, and that’s to bring home the trophy!”

Everyone at Cambridge Partners would like to wish Andrew all the best with his sporting endeavours, and look forward to hearing about his team’s successes.

 


“I’m at the top of my game – and I don’t feel old!”

Here’s a very interesting interview from retirement commissioner, Diane Maxwell, which screened on TV3 this morning. Well worth a read or watch in its entirety, but here are some of the key points:
– Most ‘retirees’ don’t feel old – ‘they are fit, healthy and active and want to get up in the morning and do something’.
– Most kiwis want to retire when they are aged between 68 and 72 NOT 65
– 63% of people don’t believe they will have enough to retire on when the time comes
Diane Maxwell was reluctant to put a figure on just how much any one person needs for retirement as needs and expectations vary.  But she did suggest that one of the key tools to help was to always have a three month buffer – in other words enough money in the bank to tide you over for three months if you weren’t able to earn money during that time.
This was necessary regardless of age because it helped protect against a downward spiral of additional debt which could happen at any time, and seriously compromise long-term savings plans.
And what was the message she was getting back from those she talked to who had either reached or were close to retirement? “Don’t write me off – I’m at the top of my game, and I don’t feel old!”

Read or watch the full interview here

 

 


June 1st – the day of Gypsies and Queens

Today is Friday June 1st.  For most of us this year it’s the day before Queens Birthday – the last opportunity to enjoy a long weekend for over four months. But for the country’s dairy farmers, 1st June is gypsy day – the day every year when any dairy herds which are shifting prior to the next milking season change locations.
Whether the herd is moving down the road on foot to a neighbouring farm, or across the Cook Strait on a truck to the other end of the country, this year the transition will be a little more fraught than usual, with the threat of micoplasma bovis hanging over the entire industry – and therefore the whole country.
At around 37% of our total exports, farming is still by far our greatest export industry – which makes it a major contributor to our way of life. So even the most urbanised city-dweller is affected by the state of our farms – undoubtedly among the most efficient and productive in the world.
So if you are a ‘townie’, spare a thought for your rural kiwi brethren while you’re putting your feet up this weekend – for many of them it will still be business as usual. And if you’re a farmer, particularly one in the beef or dairy industry, know that the rest of New Zealand are thinking of you and wish you all the best.


Welcome to Our New Home

As of tomorrow (Friday 4th May) Cambridge Partners will be operating from our new home in the innovative new Te Uruti building in Hereford, just a short hop across the river from our current offices in Oxford Terrace.  We’re all delighted to be making the move for a number of reasons, one of the main ones being that this will be the first time all CPL staff have been under one roof since the company was formed through the merger of Bradley Nuttall and iQ2 late last year.

Another reason we are all looking forward to the move is the knowledge that this will be our permanent home – the first we have enjoyed since the earthquakes.  Being a very proud Canterbury owned and operated company, post quake Bradley Nuttall were determined to stay working in the Christchurch CBD as part of our commitment to the area – not an easy decision to stick to.  Immediately after the the February quake, when we had to evacuate our named building in Oxford Terrace, the majority of the team worked from the home of one of our partners, Andrew Nuttall.

We set up his lounge and rumpus room as offices and also used the kitchen and living room during the day. The garage housed work related papers and files, and three team members worked from their own houses. Our IT people did wonders to make our communications work, and we were very grateful that our databases were cloud based.

In late May 2011, BNL moved into an office in The Aged Concern Building, Cashel St opposite the Bridge of Remembrance.  But that was a very ‘short shift’ indeed!  Following the June earthquake these offices were no longer suitable either, so back to Andrew’s we went.  Eventually we secured space above the iconic Tiffany’s restaurant on the banks of the Avon in Tudor House, where we have been ever since.

Our colleagues from iQ2 faced similar challenges, moving around from the CBD to a couple of fringe locations before being becoming one of the early returnees to the city following their move into the Tavendale and Partners Centre.

But now it’s time for all of us to enjoy our fantastic new premises on level 4, 48 Hereford Hereford Street on the site of the former King Edwards Barracks.  We’re very much looking forward to this new chapter, and to being able to host clients and associates in such wonderful surroundings.  Click here for a map of our location, and details of the free carparking available to clients nearby.


Songs My Mother Taught Me

Cambridge Partners are delighted to be a sponsor of The Jubilate Singers first concert for 2018. This very special afternoon event is called ‘Songs my Mother Taught Me’ and, as the concert is one week before Mothers’ Day, it would make the perfect early Mothers Day present.

As their regular Musical Director, Susan Densem, has taken sabbatical leave for the year, the Jubilate Singers have taken the opportunity to offer the role to special guest musicians.  First up for this concert is Matthew Everingham, Christchurch based musical director, conductor, composer and pianist.

Michael has put together a wonderful programme of choral music written for, by and about mothers – from the Renaissance to the present day.  It features composers Aleotti, Finzi, C Schumann, F Mendelssohn, Whitacre, Lauridsen, Sondheim and Lennon and McCartney, among others.

Matt attended St Bede’s College, the University of Canterbury and Trinity College, London.  Matt’s first encounter with the Jubilate Singers was with the Court Theatre’s production ‘The Events’ in 2016.  He recently completed a successful season at the Court as Deputy Musical Director for ‘Chicago’, and is currently performing in the Showbiz production ‘Wicked’.

‘Songs my Mother Taught Me’ will be performed at 2.00pm on Sunday 6 May, 2018, at the Piano Centre for Music and the Arts, 156 Armagh Street, Christchurch.

Tickets are $25 ($20 unwaged and retirees), children are free.  This includes afternoon tea.  For bookings please phone Steve French 3586161 or email srjfrench@xtra.co.nz


Welcome to James Howard

We’re delighted to welcome James Howard to Cambridge Partners. A Canterbury local, James received his BCom at University of Canterbury majoring in accounting, finance, management and information systems.

Following his graduation, he joined EY, working in the International Tax and Transfer Pricing department. His involvement with the company spanned almost a decade, and included three years in the Netherlands working in the Operating Model Effectiveness team.

Along with New York, London and Singapore, the Netherlands is one of EY’s key hubs for Operating Model Effectiveness, so this was an excellent opportunity for James to challenge himself and gain valuable professional experience in this area. On a personal level, it provided him and wife Kate with an opportunity to fulfil a dream to see more of the world.

“I had a blast and learnt a lot and, to be honest, if it was a bit closer to home we might have stayed,” he says with a smile. “But ultimately the 26-hour flights home become a bit much for both of us. And, as much as we loved our time overseas, we’re very happy to be back in Christchurch closer to our family and friends.”

After initially returning to EY in Christchurch on his return home, James moved to Otakaro Ltd – the crown-owned entity which is responsible for delivering the anchor projects currently underway as part of the Christchurch rebuild.   Here James provided Commercial and Economic Advisory in the Strategy and Planning team. “It was great learning and a good experience but ultimately not what I was looking for” explains James. “I missed developing relationships with clients and working with those clients to create value and achieve their goals.”

James loves skiing, mountain biking “Basically any outdoor activities. I also used to be an avid rower, however it’s been a few years since I’ve sat in a boat…” He is still involved in the sport though, as he sits on the board of Southern Rowing Performance Centre.


Phillippa Wilberforce, you will be missed

It is with great sadness that we inform you, that after a short illness, Phillippa Wilberforce has lost her battle with cancer.

Phillippa was CEO at Cambridge Partners (formerly Bradley Nuttall) from October 2014 to November 2017 when she elected to take medical retirement due to ill health.

Phillippa was a well-respected and inspirational leader. Her passion, drive, expertise, hard work, determination and genuine concern for the well being of her team both professionally and personally are hugely missed.

She was instrumental in the significant growth of our company over the last three years, including leading the successful merger of Bradley Nuttall and IQ2 Private Wealth to establish Cambridge Partners.

Sadly, Phillippa’s life has been cut far too short but she has left her mark on all in our team and all those she came in contact with, for which we are all better off.

We will all miss her greatly and our thoughts and prayers are with Phillippa’s husband, Sebastian, and two children, Aurelia and Hugo, at this very sad and difficult time.

Kind regards
The Cambridge Partners Team


Bradley Nuttall Has Merged With iQ2 Private Wealth to Form Cambridge Partners Ltd

Spring is traditionally a time of new beginnings, and this year Bradley Nuttall has some exciting news, which carries on the tradition of innovation and leadership that has characterised our 23 year history.

We are pleased and excited to announce that Bradley Nuttall Ltd (BNL) are merging with iQ2 Private Wealth Ltd to form a new entity called Cambridge Partners Ltd.

Both firms share the same values, investment philosophies and aspirations. We have also invested the time needed to develop a clear shared mission and purpose for Cambridge Partners – to help our clients prosper through our role as investment fiduciaries and financial stewards of their wealth.

Cambridge Partners will be one of the largest independent, fee-only financial and investment advisory practices in NZ with over $500m of funds under management on behalf of over 600 clients. It is one of only a few DIMS (discretionary investment management services) licensed firms in NZ and holds the prestigious Centre for Fiduciary Excellence (CEFEX) certification for global best practice standards in investment management.

The formation of Cambridge Partners will help to create a more secure future and broader range of services for clients and professional colleagues.


Interesting Observations on US President’s Impact on US Markets

We’ve all now heard the result of the election. Given the polls just before election day, the outcome was a surprise, to say the least. The result has been compared to Brexit, which was one that was similarly surprising.

Perhaps we are less sceptical. Living in the world of financial markets, we know that probability is only ever as the name suggests. It represents the likelihood of something occurring, and is a very different word to certainty.

Markets have adjusted quickly since the election result, as reality set in. Initially, it appeared as if markets would go down. However, since the election result, as at the time of writing, the S&P 500 is up 1.2%, the Nikkei up 2.9%, the CAC 40 up 0.7%, the S&P/NZX 50 up 1.1% and the S&P/ASX 200 is up 3.7%.

All this means is, ironically, that investors don’t know what this means. Will the American business community or Congress rein Trump in, or will he be allowed to follow through on his election campaign promises? Trump won’t be able to pass law by himself, but he will be able to block trade deals (such as the TPPA), for example. Many New Zealanders who are anti-TPPA would also be very anti-Trump, and yet he’s very likely to kill the deal that they didn’t like. It shows how complicated this election really has been.

From the perspective of an investor, it’s interesting to look at the relationship between the US president’s political party and investment returns. Historically, markets have done better when a Democrat is president rather than a Republican (9.7% growth as compared to 6.7%). However, the same data shows the markets do best when the Republicans have controlled both the House of Representatives and the Senate.

Source: How the Election Will Really Affect Your Investments

Following this election, the Republicans will control the House of Representatives, the Senate and the Presidency.

But there is always more data. For example, when the US president has had a negative approval rating markets have done 4% better than when the president has had a positive approval rating.

These two somewhat counter intuitively, contrasting apparent causal relationships actually indicate that the relationship between investment market returns and the Presidency is a fairly weak one. What drives markets are businesses that innovate, solve problems and continually provide better goods and services at lower prices. Businesses have been doing this for hundreds of years and will continue to do so for many more.

Someone almost universally regarded as being one of America’s worst Presidents was Warren Harding, the 29th US president (1921-1923). Amongst his many blunders, he appointed a number of corrupt officials. One of his cabinet secretaries went to prison for corruption in the Teapot Dome scandal.

How did he get elected? Author Malcolm Gladwell suggested in his book Blink that people believed Warren Harding would be a good president because he appeared stately and Presidential. It was a “blink” decision.

Why do we bring this up? Only because between 1921 and 1923, the Dow Jones returned around 32%.

An article in US magazine Money put it well:

“Conventional wisdom says a President’s economic policies matter greatly to Wall Street. But… investors since the Great Depression have managed to make money in war and peace and under successful and failed administrations.”

Many investors are invested in portfolios built to last 20 to 30 plus years, our clients certainly are. Over that time frame, both good times and bad times are a given. That is the nature of capitalism which funds both worthwhile and worthless economic ventures the ultimate nature of which is only discernible in retrospect. We believe history shows that a globally diversified, low cost portfolio is a ship that can and will survive the storms of politics, because it is founded on the success of business.

Presidents come and go, but business in aggregate has never gone out of business, and won’t in the future, whatever President-elect Trump does.

So we encourage you to relax, tune into the news out of interest, but know that your long term plans are based on something much more solid and stable than politics.

Disclaimer

This document has been provided for general information purposes only. The information is given in good faith and has been prepared from published information and other sources believed to be reliable, accurate and complete at the time of preparation, but its accuracy and completeness is not guaranteed.

Any information, analysis or views contained herein reflect our opinion at the date of publication and are subject to change without notice. To the extent that any such information, analysis, views or opinions may be construed as advice, they do not take into account any person’s particular financial situation or goals and, accordingly, do not constitute personalised advice under the Financial Advisers Act 2008, nor do they constitute advice of a legal, tax, accounting or other nature to any persons. Past performance is not indicative of future results, and no representation or warranty, express or implied, is made regarding future performance. To the maximum extent permitted by law, no liability or responsibility is accepted for any loss or damage, direct or consequential, arising from or in connection with this document or its contents.