The One Thing Every Australian Investor Needs to know After Trump’s Win
The markets never lie, and in the wake of Donald Trump’s election victory, they’re sending a clear message to Australian investors. While US markets have surged on the news, the Australian sharemarket has been left behind. This divergence highlights a crucial reality that local investors can no longer ignore: exposure to US markets is essential for maximizing returns.
The Writing on the Wall
The numbers tell the story:
- ASX year-to-date: Up 8%
- S&P 500 year-to-date: Up 26%
No amount of dividend imputation can bridge that performance gap. The message is clear – Australian investors who limit themselves to the local market are missing out on significant growth opportunities.
Overcoming Home Bias
Despite the compelling case for international diversification, many Australian investors remain hesitant. A recent HSBC report reveals that the number of Australians considering overseas investments has actually dropped from 49% in 2022 to just 40% today. This home bias is particularly pronounced among older investors, while younger generations are more likely to hold US tech stocks or ETFs.
The One Essential Move
Given these market realities, there’s one action every Australian investor should take: Find ways to gain exposure to the US sharemarket. This doesn’t mean abandoning Australian shares entirely. Our market still offers attractive dividend yields and franking credits. However, a well-balanced portfolio in today’s global economy requires looking beyond our shores.
How to Gain US Exposure
There are several ways Australian investors can access US markets:
- US-focused ETFs listed on the ASX
- Direct trading of US stocks through international brokers
- Managed funds with global mandates
- ASX-listed companies with significant US operations
The Bottom Line
The Trump rally has highlighted the growing performance gap between US and Australian markets. To capitalize on global growth opportunities and avoid being left behind, Australian investors must overcome their home bias and find ways to participate in the US market’s upside. Diversification isn’t just about risk management – it’s about tapping into the world’s largest and most dynamic economy. Don’t let complacency cost you. Take action now to ensure your portfolio is positioned for global success.
