Crashing to Earth
Even when the market falls, share investing is safer than ski jumping.
Last year, while attending a wedding in Canada, I saw the ski jump built in Calgary, Alberta, for the 1988 Winter Olympics. I found it terrifying – even though when I saw it no one was jumping (it was summer) and I was simply driving past in a car. Running through my mind were the television images of Olympic ski jumpers, crouching at the top of the ramp and waiting for the green light before zooming down, taking flight and then (please, God) landing safely on the slope.
The winner in a ski jump is the skier who flies farthest before landing, though marks are also awarded for style. So, during the brief time aloft, a competitor needs to think about technique (don’t let the skis wobble) before concentrating on landing upright.
For spectators, most events in the Winter Olympics have a frisson that only some events in the Summer Games share: the possibility that a competitor will, in a split second, fracture an ankle, leg, neck or skull.
The line between triumph and catastrophe is frighteningly thin. Competitors skate not on thin ice, but on thin blades. They travel at up to 140km/h on a luge, which has echoes (admittedly very faint) from childhood of sliding down a snowy bank on a rubbish-tin lid. The figure skaters and speed skaters are daring, too, though in different ways.
What impresses me about the Winter Olympics is the sheer bravery of the competitors, yet I imagine they do not think of themselves as brave, having long ago accepted that risk is part of their chosen sport. Their interest is in winning. I, sitting on the couch, do not especially care who wins, but I need courage to watch.
When the sharemarket falls, which is at some point inevitable, it will be interesting to see the tone of the reporting in New Zealand. When I was a young reporter – which is now some time ago – falls in the sharemarket were greeted in the newsrooms I worked in with considerable excitement. Mostly, that is because bad news makes good stories, but also because reporters themselves were notoriously impecunious. To judge by our collegial chatter, few of us had direct investments in stocks. After the 1987 sharemarket crash, which caused widespread devastation, I remember a fellow reporter announcing, “Well, it hasn’t cost me a cent.”
Many of us were in the same position and patted ourselves on the back at how clever we were to have no investments. There was also an undeniable sense of glee that “the rich” had just copped it.
These days, I imagine, few workers in any New Zealand workplace, including newsrooms, do not have a KiwiSaver account. Anyone who does not shouldn’t feel smug about it. When the Government is giving away up to $521.43 a year to everyone enrolled, most workers would need a good reason not to belong. But being part of it means your KiwiSaver account will be invested, at least in part, in the sharemarket. A sustained fall means individual account balances fall, too.
Sharemarkets go up; they go down. Sometimes a little; occasionally a lot. A few commentators pronounced the global financial crisis to be the end of capitalism. It wasn’t. But if you find a big fall, like an Olympic ski jump, is too scary for you, then it might be best not to look.