Latest / The Curve / RTC139: Breaking down the US election.

Transcript

RTC139: Breaking down the US election. · The Curve

0:00
Welcome to Raisin the Curve, a podcast designed to teach you everything that you need to know to be better with your money.
0:06
Come and learn alongside me Sophie Hallwright, a total beginner from the finance expert Victoria Harris.
0:12
So I've asked all of the questions you wish you could so that finance, investing and growing your wealth actually makes sense.
0:18
Yes, it's expert education but with promise will not be boring and in the wise words of sheer...
0:22
My mom said to me, you know sweetheart, one day you should settle down and marry a rich man.
0:28
My mom, I am a rich man.
0:30
Come and talk and learn and laugh with us because together we really can raise the curve.
0:36
Okay, so today's episode has been one that we have debated internally quite a bit on how to approach.
0:42
And it's because we're not a political podcast.
0:46
We're not a political platform, we don't talk about politics but then sometimes politics impacts the economy,
0:54
the impact the stock market, the impact of personal financial situation.
0:58
So we've got to talk about them.
1:00
Yeah, and I think also politics is one of those things. I'm really ashamed to say that I never really got a huge amount of joy out of.
1:08
No, I was going to say I didn't really get much education when I was younger.
1:12
It wasn't just handed to me and I didn't also then seek it out when I was at an age where I really should have.
1:18
And so I feel like the reason I don't talk about it a lot is because I don't feel really confident in doing that.
1:24
And I know that's a really shameful thing to admit.
1:28
It's like finances though.
1:30
Like I was just listening to you speak then and I was like you could have been talking about finances.
1:34
You know, I didn't talk about it, I didn't engage in the conversation because I didn't know a lot about it.
1:38
And it's the same with politics, except when you're younger you don't need to know about politics.
1:44
You know what I mean? It's not like you're...
1:46
Well you can't go to the playground being like, oh what do you think about Harris or Trump?
1:50
So as you get older these policies start affecting you and impacting your assets or your income or the people around you.
1:58
And so yeah, you want to be engaged because it can make a huge difference. So you should be engaged.
2:04
So today we're going to do a proper breakdown about the US election, about politics, and how this can and will affect your portfolio if you're investing.
2:12
You're not only that be your financial situation and actually also the US economy but economies all over the world.
2:20
This will have ripple effects because it's such a powerful country and a lot of us invest in the US stock market.
2:28
And for context we're talking about the US election.
2:30
Sorry did I not say that.
2:32
Oh wow.
2:34
We're talking about the election but we're talking about the US election.
2:36
Which I'm sure people have realized.
2:38
But it's similar for most elections to be honest.
2:42
Yes we'll go and dig into policies that are specific to the US election, the upcoming US election.
2:46
But yeah, how you think about politics and finances is the same no matter what region or who's being elected.
2:56
And I think something that is important to remember which is such a fundamental.
3:00
But I don't know why I didn't realise this for a long time.
3:04
Politicians make policies because they want you to vote for them.
3:10
Exactly.
3:12
It's not just I want to be a politician or the head of this country because I guess so much about this.
3:16
I'm sure there is that.
3:18
But at the end of the day you have a campaign and you have to be quite strategic about how you can get people to vote for you so that you can get into power and you can make changes.
3:28
And probably some of those things they put in there because they want people to vote right.
3:32
So I couldn't apply ground, it's like be my friend if I give you a cookie.
3:36
You know, it's like of course I'll be your friend if you can.
3:38
And they have buttons.
3:40
Yeah, it's literally and that's exactly what politicians are doing.
3:42
They're like vote for me and I'll reduce to taxes.
3:44
Yeah.
3:46
But then also what they say and what they can actually do once they're in power can also be quite different.
3:52
So there's a lot of false hope I guess.
3:54
If we were to compare exactly that to CEOs and less of companies.
4:00
There is only so much that you can change in a short period of time.
4:04
And so although people might have big audacious goals and promise this and that.
4:10
What you can achieve in the time that you're in power with that's in a company or for a country is different.
4:16
Very different.
4:18
And you also want to put your own stamp on it.
4:20
There's like an ego sign of things as well.
4:22
It's like you know what, I'm going to introduce lower taxes.
4:26
And then the next leader of politician comes in and they increase taxes.
4:32
When you're in power you want people to like you.
4:34
And so therefore you're going to do favorable policies.
4:36
Not only to get in power but to stay in power.
4:40
And so it's the same as a CEO.
4:42
You want to leave with a good reputation.
4:44
So you want to do things that might be bad long term for the country or for the company.
4:50
But in the short term you look good.
4:52
So let's do it.
4:54
So this is why we love founders when it comes to businesses or companies.
5:00
When you're investing.
5:02
When you're investing.
5:04
Because they don't have that short term mentality.
5:06
That makes so much sense when you compare it in that way.
5:08
So let's explain.
5:10
So there's two people running for president of the United States.
5:14
And actually we got this message the other day.
5:16
I think it was maybe to one of our podcasts.
5:18
And someone said hey what do you think about maybe referring to both of them with their last names?
5:22
Like we're saying Trump and Kamala.
5:24
Yeah and we were like oh my god it's so embarrassing.
5:28
We have been doing that.
5:30
Isn't that weird?
5:32
To think that is in her.
5:34
Well everyone is referring to her by her first name.
5:36
And Trump by his last name.
5:38
Anyway.
5:40
Do you think that is a function of like a gender thing?
5:42
I have no idea.
5:44
Because I think it's I think it's his Donald.
5:46
How's Donald going?
5:48
Is Donald in power?
5:50
Donald, yeah.
5:52
But I also think Trump.
5:54
His name has been so ingrained in his business and like for so long.
5:58
Do you know what I mean? He's always been Trump.
6:00
I think we all.
6:02
Whereas Kamala, I personally think it's because she is.
6:04
You refer to people in their first name if you're friends with them.
6:08
Or if you know them.
6:10
Or if you feel close to them.
6:12
So I think it's almost an endearing thing.
6:14
Interesting. Let's just go with their full names for this podcast.
6:16
Oh mouthful.
6:18
Into it.
6:20
So Kamala, she is the, what do you call them?
6:24
They're elected.
6:26
The presidential candidate.
6:28
Nice. Yeah. Well.
6:30
For the Democratic Party.
6:32
Yes. And now the Democratic Party is a party that is a lot more liberal than Republican Party.
6:36
They focus more on social issues.
6:38
They're more progressive.
6:40
So essentially the Democrats are what you would consider more left.
6:44
Yes. Yeah. And the thing in America is,
6:46
and it's probably some Americans listening to this podcast,
6:48
but from my outside view is that it is a very split nation in terms of
6:54
it's you are a Republican or a Democrat.
6:56
You know, you support a Republican Party or Democratic Party.
7:00
Like there is no kind of swapping in between.
7:02
Whereas I think in New Zealand, in particular,
7:04
it's a bit more fluid.
7:06
I voted Labour and I voted National in my life.
7:08
You know, it's very, it's not as divided I think is what I'm trying to say.
7:12
And also I think people are much more vocal and open about the fact that they're either
7:16
supporting the Democrats or Republicans.
7:18
Yes. Yes.
7:20
Whereas I feel like in New Zealand and the UK,
7:22
people are way more harsh.
7:24
It's not so much a deciding factor if you want to be friends with or hang out with someone
7:28
based on their political views.
7:30
Yeah. Quickly. Can we just talk about the famous people that were endorsing the Democrats?
7:34
And Kamala. So Taylor Swift.
7:36
Taylor Swift, the biggest.
7:38
Yeah. George Clooney.
7:40
Reed Hastings, who we spoke about, which is the Netflix co-founder.
7:42
He recently endorsed Kamala.
7:44
Mm-hmm.
7:45
Charlie XX.
7:46
Oh, Brett.
7:47
You wanna guess.
7:48
I've done some dancing to that song every morning.
7:50
I feel like leaving the house thing like, I'm so honkled.
7:54
And recently Alex Cooper.
7:56
Oh, yeah.
7:58
Kamala Harris was on a cooler daddy, which was just a iconic.
8:02
Yeah, it was pretty iconic.
8:04
And Beyonce and Obama all supporters of the new Democrats.
8:07
All people that I love, love, love, love.
8:09
Yeah.
8:10
Now Donald.
8:11
Donald?
8:12
He is a Republican.
8:13
Yes, he is the presidential candidate for the Republican Party.
8:17
So the Republican Party is a bit more conservative.
8:21
So they're a bit more right-leaning.
8:23
They hold a bit more conservative views on social issues.
8:26
So like gay rights, for example, like very...
8:29
Abortion.
8:30
Yeah.
8:31
They're very...
8:33
Very opposite to Democrats.
8:35
I mean, I even think if I look at the list of, you know, celebrities that are endorsing both parties.
8:40
Yeah.
8:41
It sees a lot about what their policies are and who's leading the charge.
8:45
The biggest one being Elon Musk.
8:47
Yeah.
8:48
And which I think is quite surprising.
8:50
Elon Musk's daughter has come out as a transgender woman.
8:54
And he still doesn't...
8:56
Isn't supportive of transgender rights.
8:58
Yeah.
8:59
So to me, that's just...
9:00
I don't know what this is.
9:01
I think this is more to do with Tesla, to be honest.
9:05
Because their policies, which we'll get to in a second,
9:08
that Donald is bringing in or proposing versus Kamala,
9:13
is a lot more...
9:15
It gives Tesla a lot more freedom to our parties.
9:17
Right.
9:18
Yeah. And so I think it's a bit more like that.
9:19
And Biden, who is...
9:21
Who was a Democrat, pretty much killed the EV market in terms of regulation or that.
9:25
So I think...
9:26
I think it's more business focused, but I could be wrong.
9:28
But...
9:29
Yeah.
9:30
Interesting.
9:31
The alignment.
9:32
Yeah.
9:33
Who's aligning with who?
9:34
Can we chat about before we get into some of the policies?
9:39
I would love to do an overview of the last few elections.
9:43
Yeah.
9:44
So we had had a lot of people reaching out wanting us to do an election podcast
9:49
because they're worried about how it's going to impact the US stock market,
9:54
the S&P 500, their investments, all of that.
9:58
I just want to caveat by saying there is no research that shows
10:02
if the Democratic Party wins the stock market does well or worse,
10:05
or if the Republican Party is in the stock market does well or worse.
10:08
Oh, there is.
10:09
So you can sit back, relax and enjoy this episode
10:14
because there's no impact on the stock market from one party or the other or the other.
10:19
Which is so interesting because what most people try and claim when it comes to politics
10:24
and who's in power is their economy is doing so badly and wow, wow.
10:28
And it always seems to come down to money.
10:31
So it's interesting that there's so much pressure when it comes to people stressing out finances
10:37
and the election and politics when really there's no research to show
10:41
that it impacts it either way.
10:43
Yeah.
10:44
There is one thing though that the market hates and that's uncertainty.
10:47
If we think back to COVID, that was probably the biggest uncertain environment
10:51
this world has ever been in since I've been alive.
10:54
And we didn't know what the world was going to look like in the market fell off a cliff,
10:59
literally.
11:00
It fell about 30%.
11:02
So when Trump was running for president back in...
11:06
2016 was when he was elected.
11:09
So around that time there would have been a huge amount of uncertainty.
11:15
I think at the time most people really didn't think that he was going to get into power
11:19
but there was still a bit of a question mark.
11:21
And I remember when it was Donald and Hillary Clinton and they were running
11:27
and she was a she was a shooant from all the statistics
11:30
and then he came out and obviously got into power.
11:34
And so yes, the market was predicting a Hillary Clinton win.
11:39
Does that mean that the market wasn't like...
11:41
And then it fell because he got in.
11:44
And everyone was like, oh my gosh, what's going to happen now?
11:46
They were like, oh my gosh, this is so uncertain.
11:48
We need to now factor in all his policies and all of that
11:50
because we were so uncertain on Hillary and it's like with Brexit as well.
11:54
Everyone was like, well that's not going to happen.
11:56
And then when it did, the market fell because everyone was like, oh my gosh, we didn't factor this in.
11:59
So it's like this whole...
12:01
We need to recalculate what the future is going to look like, that kind of thing.
12:05
But in the lead up to an election, the market can be volatile.
12:09
So there is...
12:10
Because people don't know who's going to get into power.
12:13
So they're trying to be like, they're looking at statistics and going, oh it might be Kamala,
12:17
it might be Donald, it might be Kamala, it might be Donald.
12:19
And when there's no clear front runner from the get-go,
12:22
then that creates uncertainty.
12:24
So don't worry, there might be a bit of movement up and down.
12:28
Especially when one party might come out with quite audacious policy
12:32
they will put in when they get into power versus another
12:36
and the impact that might have and all of that.
12:38
So there's a bit of movement, but that's in the short term.
12:42
Also remember, the elections next week,
12:46
if you're listening to this when this has come out, it's not far away.
12:49
So you don't have a lot of volatility or ups and downs in the market to...
12:52
You don't have to do anything.
12:54
Yeah, exactly.
12:55
And then straight after the election, just like what we were talking about,
12:58
sometimes there can be reactions as well, depending on who gets in.
13:03
But usually the stock market does well, regardless of what party.
13:09
So can we do a bit of an overview then on Donald and Kamala's policies?
13:14
What are the differences and what are there some that you're talking about
13:17
that are quite heavily skewed towards finance that could be impacting...
13:22
Yep, the stock market having a bit of a panic attack.
13:24
So firstly, with Donald, so he's always...
13:27
Which is lovely. I think it's also a spectacular thing to use people's last names.
13:31
So yes, Donald, he's all about deregulation.
13:34
So he's all about tax cuts as well.
13:38
He's been a big one of his, which people love, voters love tax cuts.
13:42
You know, paying less tax, please sign me up.
13:46
But this is mainly for corporations and high income earners.
13:50
So wealthy people.
13:52
It's interesting though, because isn't Jen really...
13:54
I know this is again quite a broad sweeping statement.
13:57
However, aren't Jen really Donald's friends...
14:03
Yeah, lower income earners, isn't that kind of...
14:06
Yeah, so he's...
14:08
So that's really interesting that one of his main policies is not...
14:11
I mean, I don't think that all be low income.
14:13
I mean, he's a high income earner.
14:16
So he's probably doing it for his own self-promotion.
14:19
But he also wants to reduce government spending on social programs and social welfare.
14:23
One key thing is...
14:26
I mean, he's talked about this forever.
14:28
He's talked to immigration policies, the war, all of that, which...
14:32
I can see why he's pushing that, because there is a lot of people in Middle America
14:38
who have lost jobs because of people coming in from other countries.
14:43
So he's playing into that.
14:45
I will help you get your job back, kind of thing.
14:47
And so he's kind of trying to target the high income earners with the tax cuts.
14:51
Yeah.
14:52
And then the Middle America...
14:54
That, with kind of...
14:56
Well, less people into America to steal your jobs effectively.
14:59
I'm not saying that.
15:00
Maybe it might be you.
15:01
That's his view.
15:02
Yeah.
15:03
He's also, which you'll love, very focused on using fossil fuels and producing energy from fossil fuels.
15:11
Why would I love that?
15:12
I'm just joking.
15:13
He's so riled up already.
15:15
So, yeah, he's got this campaign drill, baby drill.
15:19
And it's just all around.
15:21
He's not...
15:23
I know.
15:24
I want to hit Donald with a duck in the fence.
15:28
So, yeah, he is all about screw renewable energy.
15:33
And the reason that we were just talking before about Elon Musk wanting or endorsing Donald Trump
15:39
is that he is planning to put on tariffs from imports from China.
15:46
He's trying to bring back manufacturing into the US.
15:49
So, he's very US centric in terms of, like, we're going to stop people coming here.
15:53
They're great again.
15:54
Exactly.
15:55
What about Kamala?
15:57
Kamala.
15:58
Kamala.
15:59
So, she's naturally the opposite, increased spending on social programs, welfare.
16:05
And this is...
16:06
Remember, this is the socialist party.
16:09
And so, Middle America surely would see that and be quite happy with that, right?
16:12
I mean, it's...
16:13
It's almost like there's an equal and opposite policy that benefits high, middle and low income earners,
16:19
on both sides.
16:20
Yeah.
16:21
She is on the tax side of things.
16:25
Again, she's going to raise taxes for corporations and high earners, increasing capital gains tax,
16:31
which we don't actually have in New Zealand.
16:34
What about in the UK, do they have that?
16:36
Yep.
16:37
They've got capital gains tax in the UK.
16:38
What is capital gains tax?
16:39
So, it's gains on investments, like the capital returns.
16:44
So, say if stock price, for example, goes from $100 to $120,
16:47
you pay capital gains tax on that $20.
16:50
The return that you've made, or on property, if you make money on property, you pay a tax on the income you've earned from that property.
16:57
But, yeah, if you're investing in property in New Zealand, you don't pay capital gains tax.
17:00
That's why our property market just goes bananas.
17:02
So, she's increasing that.
17:03
Yep.
17:04
She's increasing that.
17:05
So, again, some people might not like that.
17:07
Other people might.
17:08
People that probably don't own a whole lot of assets don't really care about capital gains tax.
17:13
She's also a very pro-growth.
17:15
So, she is giving tax breaks to small businesses to help them be innovative and kind of grow the economy that way.
17:23
And she's also got a really softer stance on cryptocurrency.
17:26
So, she's a bit more open to it.
17:28
Yep.
17:29
So, if she gets in, then all the gamers and all the crypto guys will be voting for her.
17:33
Yep.
17:34
Yeah.
17:35
So, yeah.
17:36
So, overview.
17:39
It's really kind of high.
17:41
Because it's not as though one is targeting high income middle or low.
17:45
They both try to do both.
17:46
Which makes sense.
17:47
You obviously want as many voters as possible.
17:49
I guess one Trump is more...
17:51
Oh, excuse me.
17:52
Sorry.
17:53
I guess Donald is more focused on tax cuts and a protectionist kind of view on America.
17:59
Whereas Kamala, if I'm just summing up really, really basically, would be probably not as focused on increased tax cuts.
18:05
More social welfare, but also pro growth.
18:08
So, let's get America growing.
18:10
Yeah.
18:11
Yeah.
18:12
One of the biggest impacts on the stock market from a political standpoint is any changes in corporate tax or company tax.
18:19
So, if companies pay more tax, they have less profit.
18:22
Less profit means lower shareholder returns.
18:26
So, if you're cutting taxes, that really stimulates corporate growth.
18:32
If the curve had to pay less tax, we'd have more profit.
18:35
Means our share price would do really well, which means investors would be happy.
18:38
The stock market would do well.
18:40
Because it isn't overall.
18:41
So, it benefits businesses, essentially.
18:43
If tax cut, the corporate tax cuts.
18:45
Oh.
18:46
Corporate.
18:47
Yeah, they both...
18:48
What are they both saying about corporate tax cuts?
18:50
So, they're both cutting corporate taxes, but different amounts.
18:53
So, Trump's way bigger.
18:55
Oh.
18:56
Yeah.
18:57
So, any corporate tax cut is seen as a boost to companies' profits.
19:01
Just like your personal situation, if your income tax was cut, then you'd have more money to spend.
19:06
Okay.
19:07
So, if I'm paying less tax, they have more money.
19:09
If a business pays less tax, they have more money.
19:11
Exactly.
19:12
And so, there's the premise that if Donald is in power, that the stock market could do better.
19:17
Is there an underlying question mark around that, even though there's no science or, like, dialed or anything to prove?
19:22
Yeah.
19:23
Just from this policy alone.
19:25
So, he is proposing to do $6.5 trillion in tax cuts.
19:30
That's a lot.
19:31
Yeah.
19:32
And remember, if this money's not coming into the US government, if that's $6.5 trillion, it's not coming in anymore.
19:39
Because of this new policy, it has to come from somewhere else.
19:41
Yeah.
19:42
Where would it come from?
19:43
Oil and gas.
19:44
Drill, baby, drill.
19:46
Drill, baby, drill.
19:47
Oh, no.
19:49
Yeah.
19:50
So, his tax cuts would come to $6.5 trillion.
19:53
His would come to $4.2 trillion.
19:56
That feels a bit more realistic.
19:57
Yeah.
19:58
So, in that sense, his corporate tax rate cut is coming from 21 to 15%.
20:05
It's a lot.
20:06
His is only a reduction of, like, 5%.
20:09
So, a bit of a smaller reduction hence the size of the cuts.
20:11
But, anyway, his proposed tax cut would be about a boost to S&P 500 earnings.
20:18
So, all the companies in the S&P 500 buy about 4% on average.
20:22
So, there's probably people who are only thinking with their wallet right now
20:27
and thinking, I hope Donald gets in.
20:29
Yeah.
20:30
But again, this is so scary, though, isn't it?
20:33
This is only, like, short-term stuff.
20:35
You know, it's like, yeah, and again, you've got to think, okay, well, where is he going to get that 6.5 trillion dollars from?
20:40
From the earth and the planet and the environment.
20:43
Or cutting that social welfare payments, which impacts other people.
20:47
It's like, it's very chicken and air.
20:49
Well, it's just like all of a...
20:51
You can't just... Yeah, it's economics.
20:53
Yeah, everything is a function of something else.
20:55
You can't take from here and not give to the area.
20:58
You can't give to the area and not take from... You know, like, it's all one big pool of money that you've got to...
21:03
What about...
21:04
In terms of what's impacting women specifically?
21:06
Are there any policies that are positive, like, really, obviously positively impacting women or negatively?
21:15
Yeah, so Kamala has come out with this policy around.
21:19
If she gets elected, that she'll have...
21:21
She'll introduce a one-time payment.
21:23
So about $6,000 US dollars for newborns.
21:27
So it's almost like a... Wow.
21:28
Yeah, it's like a $6,000 baby boy.
21:31
Oh, that would help so many people.
21:33
Yeah, it comes as a tax credit.
21:34
So it's not like a cash payment.
21:36
It's, you get a tax credit.
21:38
So, like, you'll pay less tax.
21:40
$10,000 cash, and you'll get $6,000 back, kind of thing.
21:43
Okay, yeah.
21:44
So... But her premise is to also support young families.
21:48
Yeah.
21:49
But if she's in power, and sorry, this is, like, really a really silly question, but the idea
21:54
of abortion being illegal in a lot of places, do you think that this is a way of helping people
22:02
who potentially become mothers without wanting to?
22:05
Yeah.
22:06
They at least have some financial help.
22:08
Yeah, and I think...
22:09
I mean, I haven't looked into that policy around...
22:12
Would it be a abolish if she's in power?
22:14
Yeah, I think there'd be... I mean, she's very strongly against it, naturally.
22:17
Yeah.
22:18
Yeah, and on the call of the Daily Podcast, she spoke about it in terms of how barbaric it
22:23
was that he got into power and overruled Rovers ways.
22:26
Like, it's... Yeah.
22:27
So, I think she would do everything in her power.
22:29
Interestingly, a lot of other countries have tax relief for new parents.
22:34
What countries?
22:35
That's amazing.
22:36
Not necessarily.
22:37
Yeah.
22:38
I mean, New Zealand's got other policies, like working for families, etc.
22:41
And helping with families under a certain income, getting a tax relief.
22:46
It's always under a certain income.
22:48
Does Australia have a lump sum similar to this policy?
22:51
They've got tax relief.
22:52
Yeah, yeah, yeah.
22:53
Is Donald got any that are...
22:55
I don't know, hugely beneficial or detrimental to women?
22:58
Well, he's come out... I mean, his damage has kind of been done.
23:01
We're not being biased in this point.
23:03
I'm sorry, I'm sorry.
23:05
But no, he's come out and said, well, my tax cuts will benefit everyone, including women.
23:11
Which is such like a...
23:13
So, that's his... That's his answer.
23:15
Yeah, yeah.
23:16
He also said he would expand that child tax credit so that Kamala increased to 6,000.
23:22
He also said he'd increase it, but he hasn't said how much.
23:25
So, it could be like $2.
23:27
But I don't think that his target market is going for.
23:32
She's going for the female voters.
23:36
He's not.
23:37
So, hence why he's got far less policies that would impact women positively.
23:43
Is there a... You know how Donald has talked about tax cuts for particularly high earning individuals?
23:51
How is that going to impact people in terms of their personal savings or investments?
23:58
I mean, other than the idea that they're paying less tax, is it meaning that individuals will feel like they have more money in the bank
24:05
or in their portfolios?
24:07
I think... If we look at both policies, I think Donald's tax cuts benefit the wealthy.
24:13
So, it's all this wealthy getting wealthier.
24:15
You know, if you've got tax cuts, you can invest in more things, you can save more money, you can get wealthier.
24:21
And therefore, the middle and lower income Americans get left behind and they get that wealth gap just gets bigger and bigger.
24:28
But then what about comparatively, if we looked at Kamala's?
24:31
It is much more progressive tax system, meaning that she's going to tax the more wealthy Americans and funnel more of that into the middle income earners by way of tax credits.
24:42
Like we just spoke about with the baby tax credit and deductions and stuff.
24:46
So, yeah, they've got very stark contrast in terms of their tax policies.
24:52
Which you have to... If you go out both... If you both go out with similar tax policies, it's like, well...
24:57
How do you know what the other person's doing?
24:59
Well, I don't know.
25:00
You know, they're going to put out their tax thing.
25:02
Yeah.
25:03
I mean, you want to divide people so that they vote for you.
25:08
Like if we both came out saying, we're going to cut tax to about 10% and say, who do I vote for?
25:12
You're both going to do it.
25:13
You need to come out with some quite different policies so that you can get voters on board.
25:19
Is there a section in the stock market that's going to massively benefit from one side's policies versus the other?
25:26
Yeah.
25:27
So, if we look at Trump's one of Trump's main policies.
25:30
One of Donald's main policies?
25:31
Oh my gosh.
25:32
Don't worry.
25:33
Just keep going.
25:34
Is that he is supportive of fossil fuels, drill baby drill.
25:39
So, if I throw that question back to you, what sectors do you think will do well and not do well?
25:45
Okay, right.
25:46
So, oil, gas, anything that's harming the environment is going to do well, anything like renewable energies
25:52
or anything that's trying to have a positive impact in the environment is probably not going to do very well.
25:57
Okay, right.
25:58
Yeah.
25:59
Actually, it's quite good, though, because even just not the policies, but in terms of thinking about how the policies flow on to people's personal situations,
26:07
they flow into the stock market and it makes sense the way they've explained it.
26:11
Oh, I'd like to know about the 20-year holiday, how they affected or both of them affected.
26:17
So, is it benefiting older people, if they vote for Donald or vice versa, what's happening with regards to?
26:24
Because there's this four-one, okay.
26:26
Like the equivalent of a superpower pension.
26:28
Yeah.
26:29
I think, again, it comes down to the two groups of Americans that they're targeting.
26:35
So, Donald's favoring the wealthy Americans.
26:40
So, he is.
26:42
All his policies are going to benefit wealthy retirees.
26:46
Retires that are relying on stock market performance for their pensions, for example,
26:52
that's who he's, the policies that he's introducing is going to benefit.
26:57
Kamala's, on the other hand, is supporting social security.
27:01
She's supporting the lower middle class Americans.
27:05
But that's not necessarily the age of people, right?
27:08
So, what's to say there aren't a whole lot of people that fit into that bucket that are looking to retire?
27:14
I guess it comes down to stock market performance at the end of the day.
27:17
Because a lot of pension money and retirement money and 20-year holiday money and Kiwi saver and four-one,
27:23
okay, and then God, there's so many different types.
27:25
It is invested in the stock market.
27:27
So, what we kind of sum up to the beginning was that there's only short-term impacts that elections have on the stock market.
27:35
But long-term, if we were saying Donald's in power and he's doing his drill, baby drill situation,
27:42
then people who are invested in four-one, okay, or 20-year holiday funds that are heavily invested in those types of things
27:48
will benefit opposed to those who have tried to divest into different types of things.
27:52
But remember also coming back to the fact that politicians only empower for short period of time.
27:58
So, the next person that comes in could completely flip that and be pro-renewables.
28:03
And, you know, so it's...
28:06
It's a point.
28:07
It's a point. It's just there's so much back and forth.
28:10
And it's like, what is actually...
28:12
What is going to impact finances all the stock market in the short term?
28:15
Is the answer kind of it's not?
28:17
Yep.
28:18
It's really good to be involved and to vote,
28:21
and because there will be impacts from certain policies that will impact you personally or impact your portfolio,
28:27
but it's also don't get stressed out by trying to react,
28:33
to the opinion on who gets in power.
28:35
Just realize that if you are investing for your retirement or your 20-year holiday,
28:41
you've probably got 5, 10, 20, 30 years.
28:45
And there will be multiple different people in power throughout that period of time.
28:50
And as long as you're diversified so you're not heavily invested in renewables or fossil fuels or healthcare or anything like that.
29:00
If you're invested in the S&P 500, you're investing in all of those things, so you'll be fine.
29:05
Okay.
29:06
Can we do a few wrap-up comments when you were researching for this episode,
29:10
what were some of the top learnings or things that you thought other than,
29:15
don't react like that last piece of advice is actually so genius essentially,
29:19
it's going to go a little bit this way and then a little bit this way,
29:22
regardless of who's in power.
29:23
But were there any other things that really stuck out to you as learnings when you were researching?
29:28
I think the key thing is I think politics has got very divided.
29:35
And I don't know if it's just me being more conscious of policies and leaders around the world,
29:43
but I feel like social media has definitely made politics a lot more spicy.
29:51
Spicy, dividing from people, segregated, passionate, all of that,
29:57
because you've got the platforms now where not only their views,
30:01
but everyone else's views can be spread.
30:03
And so I think what I'm saying with that is that there can be a lot of unnecessary noise as well.
30:09
In terms of you think you need to do something, you think you need to react.
30:13
And I think in this point, not in terms of voting.
30:17
I think what's really good to remember though is it's great to be across these policies
30:24
because they may impact you personally.
30:26
It might not be from an investment standpoint or a stock market standpoint.
30:29
It might be from tax cut standpoint, for example.
30:33
So it's good to be across them from that point of view and vote for people that have policies that you want to support.
30:43
But yeah, one thing is make sure you vote because it's not just policies, it's behaviors,
30:50
there's a lot more than a policy when it comes to voting for a leader of a country.
30:57
And if you don't vote, you kind of can't complain.
31:01
I also think what you've said about similar to when we backtrack to founders leading companies
31:07
opposed to CEOs or politicians leading countries.
31:11
Yes, there's not a lot you can change in four years.
31:14
But maybe the flip side of that is there's a lot of damage you can also do in four years.
31:18
And so if you're not taking an actor role in learning and understanding and then voting with the power that you have,
31:26
you might end up seeing or living in a world that you're really not that proud of or happy with
31:31
or feeling as looking after you, there's so many different elements to it.
31:35
I think it's important to think about your individual situation when it comes to what's in your bank balance,
31:41
what's in your portfolio, etc.
31:44
But also thinking collectively, what is this going to do to society,
31:48
to other people that are in more difficult situations?
31:51
And it's looking, I think it's such a good point.
31:54
You can do a lot of damage and we have seen politicians get into power and reverse things
31:59
and do a lot of damage and take us 10 years back in terms of everything.
32:04
And there are policies that could really impact the LGBTQ plus community
32:10
and policies that could be really good for that community.
32:13
So it's like thinking about beyond your personal situation as well as taking that into account.
32:19
And so I also think one thing from doing this research was,
32:23
and maybe it's just from the curve and how far we've come in terms of conversations
32:28
about how important it is to support my community, which is women,
32:33
that I'm involved in and that I care about.
32:36
And so I will be voting in a way that,
32:39
I'll be voting, not in America.
32:42
Like what's happening?
32:44
But I would be voting in a way that is supportive of that,
32:47
because I know how important it is to progress women in terms of their participation.
32:53
But I will force the financial situation, all of that.
32:56
And I think in that is a really beautiful message,
32:59
which is we can all vote for the change we want to see that we care about.
33:03
And for us right now, that's empowering women financially.
33:06
For someone else, it will be helping a different marginalized part of society.
33:10
And if you don't vote, you're not doing your bit to support that.
33:14
And so I think it's a really important underlying thing.
33:19
And I remember I've said this to you before, there's this really beautiful power.
33:23
And it's all about how you can support some parts of society,
33:27
but be really unaware of others.
33:30
And you know, everyone needs to step up for the things they're passionate about.
33:34
And if you don't, then the things you care about don't get looked after.
33:38
And so it's not to say that there's anything shameful for if you listen to this episode,
33:43
and it was quite enlightening.
33:45
You didn't know a lot of these things, because I definitely did not.
33:48
But hopefully the research that Victor did and the way it was explained
33:53
landed in a way that makes sense, because whether you're in the US
33:56
or you're in a different part of the world,
33:58
it's the same premise of how policies on different sides can really impact
34:04
both the broader economy and the way that we live,
34:07
as well as your own personal experiences.
34:09
And just remember, over the past 30 years,
34:12
the US stock market has delivered about 10% return per year on average.
34:17
And we have had six presidents within that time,
34:20
a combination of Democrat and Republican presidents.
34:25
That was a mic drop.
34:27
Thank you so much for listening to Raising the Curve.
34:29
These conversations are designed to teach you everything you need to know
34:32
to be better with your money,
34:33
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34:36
or that stuff.
34:37
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34:38
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34:40
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34:41
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34:44
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34:48
Yeah, yeah, so please do it.
34:50
Okay, love you, bye.