Last week Australia changed yet another Prime Minister. This marks the fifth Prime Minister in five years – Gillard, Rudd, Abbott, Turnbull and Morrison. This isn't a good record!
The Australian public and business world just want the politicians to get on with running the country. It's already bad enough that the election cycle is every three years. Planning for the long-term requires forward thinking of a decade or more, not just the next three years.
Some might say: Does it matter? Will Scott Morrison really be much different to Turnbull? – Probably not. The Australian dollar currency movements seem relieved that Morrison got the PM role.
Does it affect our portfolios? – Probably not.
I doubt it makes much difference to the operations of Commonwealth Bank of Australia (ASX: CBA) or Wesfarmers Ltd (ASX: WES) on a day to day, or year to year, level.
Australia's ASX businesses continue each year to strive to make the best profit they can, regardless of who's in charge. I'm sure we can point to different blue chips which each had their best year under a different PM over the past decade.
A lot of what politicians face is luck. The resources cycle has been kind to the Labor and Turnbull governments, yet Abbott was probably unlucky with his timing at the top role.
If the polls are to be believed, the whole kerfuffle has made it more likely that Labor will win the next election. That would probably have a much bigger effect on our portfolios. Who can say what will happen if Labor enacts the franking credits, negative gearing and capital gains changes? Arguably all of those changes are needed, and perhaps the current rules shouldn't have been implemented in the first place. However, a change of the rules will likely have flow-on effects.
As history has proven, nearly everything is just a short-term issue that will pass in time. Whoever is PM, you shouldn't change how you invest. Keep investing in quality shares for the long-term and remain patient – this will lead to simple and pleasing wealth.
