| Welcome to the November issue of the Select Wealth Management Dashboard Newsletter. Well - it's done! After all the hype and conjecture, the results are in, and they are definitive. Donald Trump and his Republican party will govern the USA for the next 4 years. In a remarkable comeback, and despite polls suggesting a close contest, Trump has reclaimed the White House with a big win. He won the popular vote (50% to Harris' 48%), and his party won the election convincingly (312 seats to 266 for the Democrats). The Republicans also won the Senate 52 seats to 47, and the House of Representatives 218 seats to 211. A clean sweep - or a "Unified Government" as it's known there.
For those of you (like me) who need a refresher on how the American system works, there are 3 branches - the White House, the Senate and the House of Representatives. The White House is the "Executive" branch of the Government. This is the branch that decides on policy and proposes laws. It is also responsible for administering / carrying out the law. The Senate and the House are the "Legislative" branches of Government. These are the branches that assesses proposed laws, and either repeal or enact them. Importantly, law cannot be enacted without the consent of both the House and the Senate. The system is designed to ensure that no single branch becomes too powerful, maintaining shared control. This is similar to the MMP system we have in New Zealand in that it is designed to ensure that you do not have a single party have full control at any given time, and that the minority voices are also heard and considered. In New Zealand, a party would need to win more than 50% of the vote to be able to govern alone. This is a rarity. Since the first MMP election in 1996, Jacinda Ardern's Labour Party has been the only example of a Majority Government (sneaking in at 50.01% in the 2020 election). In the USA however, a Unified Government is relatively common. Since 1857, the US Government has been unified 48 times, and "divided" only 38 times. Most recently Joe Biden's Democratic Party had a Unified Government in the 2021 election (although the Republicans did reclaim the House in the midterms half way through the 4 year term). So yes - Trump is in, and he has a very powerful mandate with a Unified Government. Strap yourself in - it could get wild! The American share market has responded well to this - up 4% since the result. Some might argue that Trump's election is the reason markets have rallied (I'm sure he'll claim it). But I would argue that if there was a Democratic clean sweep, markets would have rallied just as much. The fact is, markets hate uncertainty and thrive on clarity. A Unified Government (either red or blue), gives business more clarity on what to expect for the next 4 years, and they can now plan accordingly and get on with it. Businesses would be ill advised to take everything Trump says literally, but they certainly know the broad direction in which he is travelling. Some of Trump's policy favours some sectors and hinders others, but at least they know the terms of engagement now. So it's full steam ahead on a clear pathway for business. With all the distraction from the elections, something way more significant (in my opinion anyway) has flown in under the radar. Last week, there was a congressional hearing on "Unidentified Anomalous Phenomena (UAP)" - formally known as UFOs. Testimony from former Senior Navy personal, NASA staff, Department of Defence Officials and others implicated the USA government and other agencies of withholding information about UAPs from the public. Some testimonies went so far as to accuse the Government of cover ups, misinformation and silencing of whistle-blowers - bold and serious allegations. All of those testifying stated that in their professional opinions, it was clear that UAP are very real phenomenon. Statements such as "a new realisation that we are not the only advanced intelligence in the universe" and "we are not alone in the cosmos" were scattered throughout the hearing. I've been interested in space all my life. I struggle to look up at the stars at night an imagine that we are the only intelligent lifeform that exists in the vast universe, so my view on this subject is probably biased. But I believe that the idea of there being other intelligence in the universe is no longer the domain of only the crazy folk in tin foil hats - it is becoming more mainstream, and people are starting to pay attention. This excites me no end. Imagine the possibility and opportunity. To be a part of something bigger - more intelligent and advanced. WOW. But then, perhaps I'm just crazy. Here's a recording of the hearing, and some reading for you to look through and make up your own minds: https://oversight.house.gov/hearing/unidentified-anomalous-phenomena-exposing-the-truth/ https://www.nbcnews.com/science/ufos-and-aerial-phenomena/pentagon-received-hundreds-new-uap-reports-says-no-evidence-extraterre-rcna180324 https://www.forbes.com/sites/amandakooser/2024/11/14/congressional-ufo-hearing-features-eye-opening-uap-claims/ https://www.npr.org/2024/11/13/nx-s1-5189426/ufo-uap-hearing-congress-2024 The past 30 days have seen most shares markets sell off - the exception being a modest gain in the American market. Most major share markets are down between 1% and 3%, with Hong Kong's Hang Seng the worst performer down 4% (after a 14% rise the previous 30 days). The NZ$ has fallen in value against all major trading partners - particularly the US$. Mortgage rates and term deposit rates remained more or less unchanged, but are expected to come down again this month as the Reserve Bank of New Zealand is expected to cut rates by a further 0.50% when they meet next Tuesday. Property prices continue to fall, although at a slower pace. According to CoreLogic, the eighth successive drop in property values since February has led their chief property economist to suggest that the market's price floor is near. Time will tell. New Zealander's continue to do it tough. Centrix data highlighting that 458,000 Kiwis were behind on payments in September, equating to a staggering 12% of the "credit-active" population. That implies that nearly 1 in 8 New Zealanders with debt are behind on their payments - a scary and saddening statistic. Here are the numbers for the past 30 days: |
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In terms of your Select Wealth Management portfolio, performance for most portfolios remains robust despite the volatile environment. The Nikko AM Global Shares Fund (Hedged) has enjoyed a particularly strong 12 months with returns in excess of 40% - a sharp turn around after a period of underperformance. Another very good reminder why it is so important to focus on long term outcomes and avoid short term noise. It would have been easy to find a reason to sell Nikko a year ago... Finally, a quick update on our Giving Back program. As we approach the last month of our campaign for Life Flight, we have raised just over $1,400. It is unlikely that we will reach our goal of $2,500, but hopefully we can crack the $2,000 mark and make a meaningful contribution to this fantastic cause. As always, thank you so much for the introduction to your friends and family to allow us to continue this program. We really appreciate it! Feel free to visit https://mifinancialplanning.co.nz/giving-back.html if you want to keep track of the Giving Back program. That's all for now. Chat again soon Warm regards Dave and the team at Makowem & Isaacs Financial Planning dave@mifinancialplanning.co.nz |
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This newsletter is intended for general distribution and does not constitute personal financial advice.