Four big lessons from 2017

Financial journalist and commentator on 3AW and Sky Business
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As the dust settles on a tumultuous 2017, here are four lessons that are the key takeouts of the year for me.

1) Political – and geo-political – headlines don’t drive investment outcomes

Investors already knew from the US election in November 2016 that the political and market reactions to the Trump victory were inconsistent, to say the least. As it became clear on election night that Donald Trump had won the White House, the futures market versions of the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite indices each fell 4.5%–4.6%, almost going “limit down” – that is, reaching the maximum allowable fall on the futures exchange. Nobel Prize-winning US economist Paul Krugman told a TV interviewer that markets would “never recover” from Trump’s election. Shocked pundits predicted a collapse when the actual market opened on that November Wednesday morning. As it happened, the US markets surged the next day – and have mostly kept rising through the Trump Presidency so far.

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