It's not that property prices do soooo much better under Republicans. It’s that they were in office 58% of the time in the period we're looking at. And that time was weighted at the start.
The message is to invest no matter which party is in power.
Even after reading this, you might still ask: “Ok, Andrew. But what about Trump’s policies? How might they impact our part of the world?”
Now, let’s look at two sides of the argument.
Let’s look at how Trump could be good for your back pocket. Then, let’s look at the arguments for why Trump could be bad for your money.
Arguments for Trump being good for your money
Stock prices rose slightly after yesterday’s election victory. Why? Trump says he wants to lower corporate tax rates.
That means businesses keep more of their money, boosting post-tax profits. That makes companies more valuable.
Trump also wants an America First trade policy. Where goods coming into the States are taxed.
That protects some American companies from offshore competition, which could improve their profits.
You probably are invested in these companies through your KiwiSaver. So that could improve your finances.
Arguments for Trump being bad for your money
On the other hand, we are a small exporting nation. We sell stuff to the rest of the world.
If America starts taxing imports (and other countries follow), it could hurt our exporters. That could have a flow-on effect to the NZ economy if those exporters don’t do well.
Trump also wants to curb illegal immigration into the States. That includes deporting some people who currently work in America.
Fewer workers should push up American wages. That’s a good thing for US workers. But it could make American goods more expensive. That could slightly raise our inflation rate.
If that happened, it could slow the pace of further interest rate cuts. Not stopping them but slowing them down.
What’s really going to happen
See how easy it is to construct two very different narratives?
You could easily argue that Trump will be good for your money.
You can also easily argue that Trump will be and for your money.
Ultimately, you can’t control who’s in the White House. What you can control is when you invest and how long you stay in the market.
As we’ve seen, people who invest – no matter what is going on in the world – tend to do better over the long term.