Why sharemarket investors who’ve seen it all refuse to panic in sell-off

Nothing unites fund managers like a market storm and the worst sell-off since 2020 has the bulls running to the history books.

Sandon Capital founder Gabriel Radzyminski.

It might not be the first investment tome at hand when global share markets go into a trillion dollar meltdown, but for a funds manager who has seen it all, the novels of 19th century English writer Jane Austen offer some sage words of wisdom when others are losing their heads.

Sandon Capital managing director Gabriel Radzyminski is reminded of Austen’s take on wealth, which in her time wasn’t represented by the value of one’s assets, but the income they generated. This, he says, is key amid share price pain.

“You don’t want to panic because you want to see what the businesses will do in response to this. Times of turmoil and times of panic are typically where good companies show their true colours,” Mr Radzyminski told The Australian.

“And those that have got good dividends to fall back on … real cash in hand … help insulate from the share price fluctuations.

“If you go back to literature in Jane Austen’s books, wealth in England in those days was never measured in capital, it was measured in income. And that is dividends. So if you are an investor relying on your portfolio you should focus on the income you are generating from your portfolio and not always the capital value.

“Because you don’t eat out on capital value, you eat out on dividends,” Mr Radzyminski said.

Sandon Capital founder and CEO Gabriel Radzyminski.

The funds manager, who looks after more than $200m in client’s funds, is keeping a cool head as share prices dive.

“We don’t know right now how these tariffs will be actually implemented. Like so many things the devil will be in the detail, and there are also enormous other markets Australia can look to do trade deals with like Europe.”

He added it was “too soon” to understand the full impact of the new tariffs announced by President Trump, and his investment team was patiently waiting on the sidelines before buying the dips. But investors shouldn’t get too caught up in picking the trough in any bear market.

“They never announce the exact bottom point of the market and if you are able to buy something on the lowest day of this rout it will be just sheer dumb luck. We are not looking to time the market, but we are just looking for what we consider good investment opportunities given the circumstances.”

Rob Millner, the patriarch and chairman of the $12.4bn Washington H Soul Pattinson investment company, has seen this type of market panic before, and he is neither dumping stock nor buying. But he is waiting for the right time to strike, and reminds investors watching their portfolios wilt that they aren’t actually poorer unless they exit their holdings.

“Just be patient. You are no poorer until you sell,” said Mr Millner, reflecting on world wars, plagues and the Great Depression. In that time Soul Patts has never missed a dividend payment (it listed in 1903) and has increased its dividend in each of the past 24 years.

“Just be patient. You are no poorer until you sell,” says billionaire investor Robert Millner. Picture: Adam Yip

“You have got to remember not many people have gotten rich overnight. Most of us here have been through this a few times now.”

Soul Patts is patiently waiting for the time to start buying. It hasn’t arrived, yet.

“It is very difficult to gauge at this time, and there could be more (falls) to come, with Trump so inconsistent in what he says. But we do have a nice little war chest as this happens, a good nest egg, if something happens and we buy.

“But we will just have to wait and see. We did the same through the GFC, although I don’t think it will be as bad as that. But I think it was all due for a shake out, and something always comes out of left field with these shake outs.”

Mr Millner said Soul Patts will continue to favour strong companies that have good cashflows and dividend profiles.

“We have always tried to follow where we can make the most cash and which is why we can continue to pay dividends as we have.”

Originally published as Why sharemarket investors who’ve seen it all refuse to panic in sell-off