NVest securities head Liam Graham and NFB private wealth management head Travis McClure gave the Dispatch their take on US President Donald Trump’s impact on their divisions in the NFB Private Wealth Management group this week.
“When he came into power in November, word out of the States was that he would deregulate themarket and install tax cuts, whichwould drive the market,” said Graham.
“Then in February he started pushing his tariff regimes.
“Since news of those minimum 25% tariffs arrived fresh from Trump’s desk on April 2 — and they were far worse than expected— the result has been a high level of political uncertainty, which has rattled markets near and far —including the auto and components industry in SA and the Eastern Cape.
“The good news is he has put things on hold and backtracked slightly, which has given the market a bit of a breather.”
“What gives us comfort is that we use quality asset managers, such as NVEST Securities — a selection of top performing unit trusts, including our in-house team, Alan Gray, Ninety One and a few others who stick to their mandates.
"In uncertainty, people head into bonds or gold. The situation is worrying but we have to play what is in front of us and keep our eyes on a moving ball.”
McClure is fielding slightly more queries than usual, which he interprets as an indication that interest rates are still attractive among clients looking for income.
“There are still good bond yields, the local market had a decent recovery, and property had recovered by 15% to 16% by the end of March, although the last few weeks have been a bit crazy.
“Looking back on what has been termed the ‘Trump Bump’, there was an initial uptick in the offshore market when he won the election.
"But people should look back after a year, and they will probably see that things are relatively flat in their own portfolios — and if there have been losses they are probably in specific shaky areas.”
McClure says uncertainty is a strong message to investors to keep their eyes on their personal investment portfolios and discuss any changes they think might be necessary.
Graham believes much of Trump’s strategy, especially threats of massive tariff increases on Chinese exports to the US, are meant to boost manufacturing activity — and hence employment figures — at home.
However, he adds: “The unemployment rate in the US is only 4%, so there aren’t too many people clamouring for work.”
Graham and McClure share plenty more advice for local investors, both in the short and long term, in a podcast interview on Daily Dispatch website.
Daily Dispatch
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