Trump, Greenland and your KiwiSaver: The price we’ll pay if the US does something ‘truly nuts’
Thursday, 8 January 2026
The Trump administration’s military operation in Venezuela hardly elicited a blink from international financial markets, but the Greenland situation poses a different kind of threat.
In the aftermath of the capture of Venezuelan leader Nicolas Maduro, both the price of gold and the sharemarket rose.
This was to be expected for the yellow metal, given its function as a safe-haven investment stockpiled during periods of uncertainty.
However, the rise in the sharemarket showed investors weren’t quite as concerned as the political gravity of this incident might initially suggest.
“This was likely a case of investors saying: 'Yes, this looks a bit messy, but President Trump will get his way and will impose order on Venezuela and get the US oil companies in there without too much mess,’” Pathfinder chief executive John Berry tells me.
Berry believes this might be an optimistic view, but the possibility of the Venezuela issue having a wider market impact remains limited at the time of writing.
Two other factors contributing to the optimism are that Trump has long been critical of drawn-out conflicts in other regions and the fact that markets continue to prioritise 2025 themes such as artificial intelligence and the trajectory of interest rates. The situation in Venezuela has not been able to shift the focus from those core themes.
The same cannot be said for Greenland.
Trump’s next move regarding this autonomous territory within the Kingdom of Denmark could have major repercussions for both international markets and our KiwiSaver balances.
Through this geopolitical chaos, it’s important to remember that KiwiSaver is long-term investment best served by not giving in to panic – which is why it pays to stay informed and remain aware of how shocks could reverberate through the market.
The political message of Denmark
Dr Murat Ungor, a senior lecturer in the University of Otago’s department of economics, says a Greenland move could trigger significantly more market turbulence for several key reasons.
“Denmark is a NATO member, meaning Greenland would be subject to NATO defence under Article 5, the promise that an attack on one ally is treated as an attack on all,” Ungor explains.
“This introduces alliance fracture risks that Venezuela simply didn’t have. European leaders, including France’s Macron, Germany’s Merz, and the UK’s Starmer, have already issued a joint statement defending Greenland’s sovereignty, signalling unified opposition.”
Denmark Prime Minister Mette Frederiksen has not minced her words, warning that an attack on Greenland would signify the end of NATO.
“This would create profound uncertainty about global stability and security guarantees, exactly the kind of systemic risk that markets fear,” says Ungor.
“Such a move could fracture US-European relations at a time when unity is already strained, potentially impacting trade relationships, defence cooperation, and diplomatic coordination across numerous issues.”
The Kiwisaver impact
To understand the impact this could have on KiwiSaver and our retirement requires a look at the composition of our funds.
“About 70% of KiwiSaver assets are invested offshore and about 70% of that will be in the US, so up to 50% of KiwiSaver assets could be invested in the US,” says Kōura Wealth managing director Rupert Carlyon.
This fundamentally implies that a hit on the US market is a hit on our retirement savings.
“If [Trump makes a move to annex Greenland], then that will definitely rattle the markets,” says Carlyon.
One thing to note is that Trump’s actions don’t always align perfectly with his initial remarks.
“Trump is volatile and all over the place,” says Carlyon.
“He throws things out into the ether and waits to see what the reaction is before deciding a path forward. Markets have taken a while to learn that the initial announcement is not the policy that will land.”
The best example of this can be seen in the way he backed down from his tariff policy the moment the market reacted poorly.
“Trump firmly believes his presidency will be judged on the strength of the economy and also the strength of the stock markets,” says Carlyon.
At the moment, there’s a significant level of hope riding on the notion that Trump’s love for seeing stocks in the green will be enough to keep him from making an unprecedented land-grab for NATO territory.
“Markets currently believe Donald Trump will hold back from the truly nuts things,” says Carlyon.
“The question is whether he slowly moved further and further towards these out there ideas as he gets away with more and more.”
How to defend your KiwiSaver balance
Should the Greenland situation escalate further, we will likely see some significant market moves.
“A Greenland crisis would likely create sustained market volatility as investors grapple with unprecedented questions about NATO’s future, European security, and the stability of international norms,” says Ungor.
“As a small market at the bottom of the world, New Zealand’s local market performance is often impacted by external global factors.”
Ungor says your level of exposure will largely depend on the fund that you’ve chosen for your KiwiSaver.
“Growth funds with a 20/80 split of income/growth assets are most exposed to international equities and volatility, while conservative funds would be more insulated,” he says.
Despite the brewing risks in geopolitics, Ungor warns against the temptation to switch in a moment of panic.
“During Covid volatility in February-March 2020, many investors moved to lower-risk funds, but research from the FMA suggests this had a detrimental long-term effect as they missed the recovery,” he says.
He says a far better approach is to match your fund to your time horizon and align your level of risk with your comfort levels, and also how many years you have left before retirement.
“That said, a Greenland scenario would represent genuinely novel geopolitical territory, so staying informed and perhaps having a conversation with a KiwiSaver adviser wouldn’t hurt.”
The rise of strongmen
Donald Trump, Russia’s Vladimir Putin and China’s Xi Jinping symbolise the growing emergence of strongmen looking to increase their influence around the world.
“That's leading to polarisation, a lack of trust and higher unpredictability,” says Pathfinder’s Berry.
“It doesn't make the world safer, that's for sure.'
As these individuals push into different spaces to achieve their objectives, it drives the type of volatility and uncertainty that spooks markets.
If a country feels afraid that a supposed ally might attempt to annex part of its land, then it becomes more difficult for trade and business to operate freely. This, in turn, hurts the growth prospects that so many globally listed companies are reliant on.
The decisions made by these three individuals – and their supporters around the world – will undoubtedly have sweeping effects on the market over the course of 2026.
But it pays to remind ourselves of the words of famed financial analyst Benjamin Graham: “The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap).'
And that pendulum isn’t going to stop swinging with Trump, Putin and Xi pulling the strings.