Savvy investors 'can benefit from Brexit-like events'

Singapore

DESTABILISING global events such as the failed Turkish coup and Brexit can potentially benefit savvy investors, said investor Jim Rogers. He was speaking at Invest Fair 2016 on Saturday, organised by ShareInvestor and The Business Times.

Steve Quirk, executive vice-president of TD Ameritrade who spoke in a panel discussion at the same event, dispelled the myth of US Republican presidential candidate Donald Trump's apparent unelectability, urging investors to take his victory into account when entering the market.

It is no secret Mr Rogers believes the West is in decline and China is in the ascendant. But he admits that Chinese firms are not without fault, as many are saddled with debt and the Chinese government does not want to bail them out.

However, he said some industries will prosper no matter what the circumstances are. For instance, due to how polluted China is, Mr Rogers believes pollution control industries will continually perform, as will healthcare and agriculture industries.

Even though agriculture industries have not been performing elsewhere in the world, Mr Rogers believes China is the exception. "Agriculture has suffered greatly in the past - Beijing knows this, and now there are many incentives and loans issued by the Chinese government for farmers living in the country, but not available for workers in the city."

Spotting securities which perform even in trying times is the key to investment success, he said. One example he gave was last month's failed coup in Turkey.

"In Turkey, because of the recent coup, their currency is collapsing and their stock market is collapsing. What I will be doing is trying to figure out what I should be buying in Turkey precisely because of its current pessimistic mood."

Mr Quirk echoed Mr Rogers' sentiments by talking about how Britain's June 23 vote to exit the European Union was able to benefit some investors. "We watched our seven million clients trade, and a lot of them were aggressive buyers post-Brexit. Those who invested in spite of the prevailing market pessimism were rewarded as a result, because they got attractive securities at attractive prices."

Mr Quirk proceeded to explain the potential merits of a Trump presidency for the financial markets. He first said TD Ameritrade's client base is evenly split between the supporters of Mr Trump and his Democratic rival Hillary Clinton, and he believes that Mr Trump has a "very legitimate" chance of winning the election in November.

He next made clear that a Trump victory would not hurt the markets in the same way that Brexit did because his victory - unlike the referendum result - would not be unexpected.

"Even though Hillary is popular on the east and west coasts, there is a large part of America - in the middle of the country - where Donald Trump is very, very popular," he said. "If your investments discount Donald Trump and you assume that the regulations put in place by (President Barack) Obama are going to continue without a problem, I think you are making a mistake."

However, he said that Mrs Clinton winning the election would result in less market volatility than if Mr Trump were to win, but noted that this might not be a good thing for investors.

When asked by moderator Martin Soong, anchor at CNBC, about any specific financial impacts of the American presidential elections, Mr Quirk said the two sectors he expects would be most affected are defence and healthcare. "Donald Trump has said specifically that he would dismantle part of the healthcare initiative that President Obama has put together. He also said he would spend a lot more on the defence side, and these contradict what Hillary Clinton has said.

"These are the first two sectors I would be looking to either increase my investment in or pull my investment out once it becomes clear which one of the two would win."

He added: "I think Donald Trump would be good for small businesses in the US. But personally, I'm just trying to figure out what Mr Trump's wall is going to be made out of, because that's what I need to be buying - it just keeps getting higher and higher."