Five Retirees and Semi-Retirees on How They’re Dealing with Trumpmoil

The wildest week of market moves since the pandemic sparked panic around the world with everyone from world leaders to hedge fund boss Bill Ackman dropping their bundle and screaming after Donald Trump smashed the stock and bond markets and then, seemingly, rebuilt them in a minute.

But one group sailed through the Trump turmoil. And they didn’t need any special expertise to do it.

Giles Craig, Jenny Buchan, Mark Daly, Chris Grover and Bernadette Nicholson are all retired or semi-retired. They have different backgrounds and different levels of investment, but they all agree that the best approach in times of market turmoil is to pause and stay calm.

And in doing nothing, these five took an action that research by Betashares Direct shows is usually safest. The do-nothing approach also has support from investors such as Warren Buffett, who told Florida University MBA students in 1998 that “the stock market is designed to transfer money from the active to the patient”, and behavioural finance professor Meir Statman, author of A Wealth of Well-Being: A Holistic Approach to Behavioral Finance.

“It’s absolutely the right call,” says Norman Zhang, chief investment officer at Koda Capital.

“When we see periods of heightened volatility, the thing that can destroy value the most are things like trading, particularly if you are starting from a diversified portfolio.”

Sitting it out is also particularly good for long-term investments such as superannuation, says Mano Mohankumar, senior investment research manager at Chant West.

The chart above shows the 10-year rolling return performance of the median growth super fund (which is where the majority of Australians have their money) compared to its targeted return of CPI plus 3.5 per cent. Even when super returns fall below their target, they bounce back.

Investors can expect the noise to persist. The S&P 500 index slumped towards a “bear market” (what professionals call it when a run-of-the-mill drop of 10 per cent for US stocks, which happens every year or so, graduates into a more vicious fall of 20 per cent) before a wild rally on Wednesday (Thursday AEST) after Trump paused tariff hikes for 90 days.

Zhang says these kinds of gyrations in prices will continue while Trump remains in power.

“There’s still a 10 per cent universal tariff, a 25 per cent tariff on autos, and we were looking at 125 per cent tariff on Chinese goods. The consequences on the economy will still need to play out. So again, this is something that you wouldn’t want to trade on a day-to-day basis.”

Here’s how five retirees and semi-retirees approached the market madness.

‘I’m being patient’

Craig, a former corporate financier who lives in Sydney’s north, agrees.

“It’s very, very difficult to work out what’s going to happen, and there’s going to be a lot of collateral damage and very unpredictable damage.” Giles Craig says US Treasury Secretary Scott Bessent may have some method in his madness.

“Last year, I was cursing being underweight US tech, and now I’m greatly relieved at our position. While I consider myself a long-term focused investor, earlier this year, I did sell down our last direct US exposure. Unfortunately, I switched into Chinese and Japanese ETFs. So that was half a good idea.”

Craig, who has enough retirement savings to mean he and his family are insulated from day-to-day movements in markets, says one thing he is not doing is buying the dip.

“I’m being patient and with the cash that we’ve got in the portfolio. It’s too unpredictable to really focus and take a strong stance in any direction.”

But he does see the hand of US Treasury Secretary Scott Bessent in the tariff strategy, arguing that Bessent may be trying to lower Treasury bond yields to reduce the cost of the massive debt refinancing coming up in the US.

“Bessent is a very smart guy. He was the guy who came up with the run on the Bank of England all those years ago for George Soros.

“It’s an audacious plan and one that is potentially brave, but I think that what we are not focusing enough on is what the alternative would be if they didn’t do something as aggressive as what they’re doing.”

Of course, it could all “blow up very badly”, Craig says, “and Trump could go down as the worst president of all time”.

‘I’m more worried about the bigger impact’

Jenny Buchan says the downturn in the market will have an impact on her spending, but that’s not her big concern.

“I’m more worried about the bigger impact of all of the loose cannon decisions that are being made in America,” she says.

Buchan, a lawyer who lives with her partner in inner Sydney and owns a one-bedroom flat and has “pretty reasonable super given I am a woman”, says Trump has no understanding of the checks and balances that should exist in a system that has three branches of government.

But as far as her finances go, Buchan is not overly concerned, saying she does not have a mortgage.

“I peronally am quite confident that as long as I don’t have to sell any shares, I’ll be fine,” she says, but she is concerned for the people who are not in her position.

“If I had a margin loan, I would be terrified. It would have already been called in. And I’m sure there must be a lot of people out there at the moment, hopefully not retirees, who’ve got margin loans, that are just not having a good time of life.”

Headlines about market carnage are alarming, and it’s tempting for super customers to exit shares for the safety of cash. But Chant West’s Mohankumar says moving from a growth fund to a more conservative option or cash can be particularly damaging to returns.

“More often than not, it results in poorer long-term outcomes than if they ride out the ups and downs. And we know that over the long term, there are far more ups.”

‘Ride this through’

Mark Daly, who retired from a career in human resources a year ago, says he is sitting on his hands.

“Not that my advice is worth a crumpet because I am not one to predict the future, but my personal view is, and it’s what we’re doing, we will just ride this through,” Daly says.

“We’ll just watch it and keep monitoring it – but not on a daily basis – and review it in line with our normal financial plan, thoroughly every six months, and not be spooked by the current ups and downs.”

“One of my philosophies is, don’t move it into cash quickly or do anything radically. Just be invested where you are so that you get the rebound.”

Daly says his experience of previous financial ups and downs shows that if you sell out, you just risk capitalising on your loss.

‘It’s going to pop up again ’

Chris Grover, a Sydneysider who has retired from full-time work but now works on the boards of three non-profit organisations, says he is also confident that the markets will improve in the longer term and is not drawing on his superannuation yet.

“The super balance has come down a bit, but I’m not drawing on super at the moment, so it’s going to pop up again or I expect it to anyway,” Grover says.

But “because I am socially minded, I am actually concerned for other people who are about to retire,” he says.

“There’s many, many people who are in a position throughout Australia … that the reduction is going to be a permanent starting point to the amount they take into retirement. In other words, they’re not going to be able to pick up the eventual long-term gain and recovery that the stock markets will be expected to make.”

“This has come along quite quickly, and investment choices may not have been made in time for people to protect themselves.”

‘What’s the use of worrying?’

Semi-retired Bernadette Nicholson, who has lived happily in a caravan since her divorce from her husband a few years ago, has some advice for those who are worrying.

“What’s the use of worrying? It doesn’t get you anywhere. We have a saying up here: ‘There’s no worry or hurry in Tuncurry’,” Nicholson says straight after a swim.

Nicholson, who says getting rid of her home has given her a freedom that she relishes, learned from the death of her father – who had never been sick in his life – from cancer that worrying doesn’t help anything.

“I don’t feel the need to panic about retirement because not a whole lot will change. I’m debt-free, I don’t have any worries, and don’t really have any major expenses. And that’s the joy of not having to upkeep a home.”

Read the article here: AFR – Five Retirees and Semi-Retirees on How They’re Dealing with Trumpmoil