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Stock Market Volatility
Trump Tweets

Seriously? Another Trump tweet sends the market into a spin

Andrew Hewison
Managing Director
5 Dec 2019

On December 3rd and 4thwe witnessed the ASX 200 fall by 4%, or $76.8b, collectively. Historically, we’d expect such a sharp fall to result from a negative shift in economic, market or sector fundamentals, but not anymore.

These days we see volatility in the market resulting from something as simple as a tweet from President Trump. They send shockwaves through the market and create knee-jerk responses from short term traders looking to get ahead of the game.

So, should we be concerned? My answer is simple, absolutely not!

In my 18 years of working within financial markets, I’ve never seen anything so absurd. Is it a buying opportunity? Probably. This recent fall came after President Trump said he was willing to wait out his trade war with China for another 12 months. Overnight on the 5th December, President Trump changed his tone somewhat by saying “We’re talking to China…we’re talking to others…” Not surprisingly, the US market rallied, and we expect the ASX200 to do the same today.

In 2019 thus far, we have seen markets fall on multiple occasions of between 2-4% from similar comments and ‘tweets’ from the President. On each of those occasions, the market has recovered all of the losses shortly after, and I fully expect the same to occur this time around.

Domestically, this week Australia‘s GDP figures were released showing that the economy had shown signs of recovery, but conversely, Australia’s latest productivity data shows its lowest levels in 25 years. I would’ve thought that an investor’s decision to buy or sell would be based on something more fundamental, such as a change in our GDP figures. Only last Thursday the Australian sharemarket reached an all-time high, closing at 6,864 points.

Whilst I’m not suggesting everyone should run out and buy the ASX, this is a great example of where opportunities can present themselves in the market. Whether it is to invest in new companies or leverage into current holdings where the share price has fallen but bears no relation to the underlying performance of the company.

I will leave you with one of Warren Buffet’s more famous investment quotes – “Be fearful when others are greedy, and greedy when others are fearful”.


Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.