As the dust settled on last summer's bushfires and the local coronavirus numbers started climbing, Crestone Wealth Management’s chief investment officer Scott Haslem and his team flipped the switch on customer outreach to overdrive.
Having cash in a low interest rate environment is almost more stressful than riding the vagaries of the stock market, Haslem says. Crestone's message got through and the former UBS economist says only a small handful of clients panicked and sold off shares. "We were prepared to look at companies who were good quality, had good balance sheets and were in the sectors that were likely to derive some benefit from the type of environment we’re in," he says, so the technology stocks, the platform businesses, and naturally – US stocks.
Up north, there were second waves, overcrowded hospitals, haphazard lockdowns, and in the US – civil and political unrest that would fan the flames of uncertainty. Haslem acted quickly and started rebalancing the fund's equities allocation to Australian companies. Haslem says Australian stocks were trading at a 10 to 12 per cent discount so he started buying into local companies that could benefit from the return to "some form of normalcy" – tourism, education, hospital, and even travel companies.
By that time, US President-elect Joe Biden will be in power and the Republican-heavy US senate will block major legislative changes. Trump's tax cuts will likely be impossible to repeal and Biden will work to soothe geopolitical fractures and rebuild the economy, Haslem says.