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Markets choose to play the policies rather than the man

Investments  |  10/11/2016  |   2 min read

The US stock market rose overnight following the election of Donald Trump as the 45th President of the United States. Yesterday, things looked gloomy ahead of the market opening for trade, with the New York Stock Exchange suspending futures trading ahead of the open.

However, after an initial session of volatile trading, the markets closed about 1% higher as investors considered the likelihood that President-elect Trump would more aggressively pursue economic growth after his inauguration in January 2017.

While Wednesday 9 November was a dismal day on the Australian Stock Exchange (ASX), the market bounced almost 3% at opening.

It just shows how difficult it is to pick short-term market highs and lows and why taking a long-term view of investments is so important for a lifetime savings plan which is what your super is.

If you are in the default Equip MySuper investment option, you should realise that only 60% of your super is in growth assets, like shares. It is a diversified option designed to grow your super consistently and with a degree of caution over the long term.

If you have picked other Equip investment options suited to your own long-term objectives, by all means consider what market changes mean for you, but we suggest you suppress the urge to switch based on short-term fluctuations in share prices – here or overseas.

Even experts find it difficult cutting through the media noise and commentary on what is going on. If there is a lesson for investors from yesterday’s rather unexpected election result, it is that even commentators we believe are experts get things wrong. So be true to your plan and, if you need help, remember we’re only a phone call away.

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