April 8, 2025 • 37 mins
Your portfolio’s down, and the news is throwing around words like “correction” and “crash.” So... should you be worried? In this episode, Victoria breaks down what’s actually happening in the share market. What’s behind the dip, how global headlines (looking at you, Trump and your tariffs) rattle investor confidence, and why it messes with your decision-making.
We're covering:
📉 What’s actually driving the current market dip and why it’s not a sign to panic
📉 Why your brain reacts so strongly to red numbers (and how to stop it messing with your decisions)
📉 What history tells us about dips and what will likely happen next
📉 What long-term investors (including Victoria) stay steady when the market gets dramatic
Press play to feel less panicked, more informed, and genuinely better equipped to ride this one out.
Listen to our last ep on the share market, Everyone’s Panicking About the Market... Here’s Why I’m Not (and You Shouldn't Either).
Join our 300K+ She's on the Money community in our Facebook Group and on Instagram.
Acknowledgement of Country By Natarsha Bamblett aka Queen Acknowledgements.
The advice shared on She's On The Money is general in nature and does not consider your individual circumstances. She's On The Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. If you do choose to buy a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards your needs. Victoria Devine and She's On The Money are authorised representatives of Money Sherpa PTY LTD ABN - 321649 27708, AFSL - 451289.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Hello.
Speaker 2 (00:01):
My name is Satasha Nabananga Bamblet. I'm a proud or
the Order Kerni Whaltbury and a waddery woman. And before
we get started on She's on the Money podcast, I
would like to acknowledge the traditional custodians of the land
of which this podcast is recorded on a wondery country,
acknowledging the elders, the ancestors and the next generation coming
(00:22):
through as this podcast is about connecting, empowering, knowledge sharing
and the storytelling of you to make a difference for
today and lasting impact for tomorrow.
Speaker 1 (00:33):
Let's get into it. She's on the Money, She's on
the Money.
Speaker 3 (00:57):
Hello, and welcome to She's on the Money, the podcast
that keeps your investments growing and your stress levels low
even when your portfolio is more red than your ex's flags.
Speaker 1 (01:06):
I'm beck you'r is it in investing?
Speaker 3 (01:07):
Newbie who's got a bunch of questions and a lot
of feelings about what the market's doing right now? You're
probably the same, I imagine. So I just sit down with
the woman who has seen it all before and live
to tell the tale. Victory Divine retired financial advisor, long
time investor and someone who doesn't panic when the market dips.
Speaker 1 (01:25):
I'm feel sick when the market dips, though I'm not
gonna feel sick, a little bit sick. I don't think
anybody likes seeing that the quote lost some money, right,
and I know that that's not the case. But like,
find me someone who logs into their investment platform and goes, oh,
it's in the red perfect great, Well, actually this like
what I mean, I do reframe it. I'm like, okay,
(01:46):
well that is actually an opportunity. Maybe I'll tip some
more money. Yes, I get it, but even I have
to check myself.
Speaker 3 (01:51):
And be like ill, And then I'm like, oh, right,
Like at what point do we stop tipping money into it?
Speaker 1 (01:57):
Because I was doing the same.
Speaker 3 (01:58):
I was like, oh, it's gone down, maybe i'll But
then I don't know where it's coming from because I've
got so many things and I don't.
Speaker 1 (02:02):
Know how to read my portfolio. But true, it's true.
Well we're going to talk about it today, but before
we get into it, I do want to like, is
it called time stamping or you tell people the day
that you're recording this. Oh yeah, so we're going to
timestamp this episode because we are recording this on the
eve of what Trump has dramatically dubbed Liberation Day. Wow.
(02:23):
So he is making in the next twenty four hours
from when we're recording this a very big announcement where
he's going to potentially announce a whole heap of like
a new round of tariff information and so that will
actually significantly impact the economy. So right now we're talking
about what has happened, and you know, I'm going to
(02:44):
talk about Trump's new tariffs when they come in, but
we don't have that information right now. But I didn't
want to like hold off on this episode to wait
for more information. So we'll talk about it and then
we'll probably talk about it again. But I don't want
you to think, oh, VS not taking into consideration X,
Y and Z babies because I don't live in the future.
I would love that, but it's so fair. Yeah, So
(03:05):
some of what I'm about to say might actually already
be playing out. And if so, guys, I am the oracle,
Like you can refer to me as the oracle. If
it's not playing out, pretend you never heard this, Like,
we are not living in the in between. So Trump
might have actually changed his mind entirely and just called
the whole thing off because that's actually an option for him,
(03:28):
and it wouldn't be the first time. It wouldn't shock
me because remember when he was like, oh, TikTok ban whatever,
We'll just not do that anymore. Yeah, just his rogue. Honestly,
there's something about American politics that just cheeks me hooked.
It's like watching reality TV. For me is like I'm obsessed,
(03:48):
it is. But I think it's really important that at
the time of recording, there has been over the last
few weeks a lot of global uncertainty swirling around and
it's hitting investor confidence, like I'm seeing it in our
community a lot a lot of people are asking, what's
going on? Why are the market's down, Victoria, how does
(04:09):
this work? So Wall Street, which is the American ASX,
has been sliding for weeks, and the ripple effect has
definitely already made its way to Australia, and so we
are starting to see that the changes in Australia are
not nearly as dramatic as America, but that is usually
what happens. So something big will happen in the US,
(04:30):
their share market plummets, ours will dip, so like we
are often replicating the American markets, but in a softer way,
I would say, And that usually happens because the Australian
economy is held up in a different way than the American.
But when it comes to confidence, Beck, if you see
your American friend going through something, you're probably going to
(04:51):
get a bit worried too, right, or I've always been
confused by this because I know people do say that,
like it's like the American I didn't really understand it.
So forgive me if I'm but the American dollars week
so the Australian dollar, Like I've just never understood the
link there because there's trade agreements between the countries I see.
And ultimately, when we're talking about investor sentiment, we are
(05:14):
talking about how confident someone is in something. Right, So
if you're seeing your friends and right now, we are
seeing a lot of what is happening in America translating
to Australia much quicker than it has historically because of
social media, because you're able to learn much quicker what's
going on in the US and get really worried about
(05:34):
it like historically, Beck, I'm just going to make a
broad brush stereotypical statement. I'm pretty sure you're not sitting
down every morning with the newspaper reading through all of
the information about the economy. That's correct. No, so you're
not doing that, But historically that's how you would have
gained your information on what's going on economically. Now you
(05:56):
jump on TikTok and people are like, what the hell
Trump's tear marfs are crazy, and you're like, oh, wow,
that is crazy. I wonder how that impacts me, and
your confidence is going to be knocked. So Australia is
responding a lot quicker to what's going on in the
US because our confidence gets knocked whenever we think that
there's something negative going on with money. Sure, so it's
(06:17):
not to say that that means that we are significantly impacted.
I don't know what these tariffs are going to mean
for US, but it does mean that, you know, I
get a bit worried when I see what's going on
in the US. I go, oh, well, what does that
mean for me? What does that mean for my investment portfolio?
I own international shares, my international company is okay, and
(06:40):
you know when that happens, I go, oh, maybe I'll
just hold off and investing for a little while, and
if lots of people do that, the market goes down. Yes,
So that's kind of like I'm not saying that that's
the only way they're linked, but in the way that
you're talking, that is how they're linked. Okay, But ultimately,
investors are worried that Trump is going to spark a
(07:02):
trade war, which is terrifying, and that typically means slower
global growth. It means that there are going to be
higher costs and more pressure on company earnings. And when
the US is a little bit wobbly on its feet,
especially inspectors lack tech and manufacturing and commodities. Australia tends
(07:23):
to feel that too because we trade with them on
those things and also Beck to put into the middle
of this. Yesterday, the RBA has decided to hold interest rates,
which I wasn't surprised about. A lot of people were
asking MeV do you think that they are going to
drop interest rates again or do you think that they
are going to increase them. No, I just thought that
(07:43):
they were going to hold because we just want to
see what's going on with the economy for a little
bit longer. The RBA are being quite cautious, and they've
only just started cutting rates, right, they can't just set
the expectation that they'll do this every month because the
economy might get too confident that we need to just
slow and steady wins the race, and they don't want
(08:04):
to jump the gun with another move until there's a
little bit more clarity on what this means for inflation
and spending and the Australian's economy in a broader sense.
So right now, I would say, and I feel like
I'm just waffling. I hope it's interesting, but right now
I would say the market is a little bit on edge.
We're not panicked, but we're definitely a little bit nervous,
(08:26):
like we're being a little bit more cautious. And as always,
whenever anybody is uncertain, that actually leads to volatility in
the market. So volatility is I feel like it's a
very fancy word for just saying that the market goes
up and down, Like volatility is how quickly it ebbs
and it flows. But in saying that, at the time
(08:47):
of recording, investors are we're just waiting to see what
Liberation Day brings. Okay, I'm just so interested to know
what they hell Trump? Like, why why does that have
to be called Liberation Day? Trump?
Speaker 3 (08:59):
It's very It's so, I know it does sound very,
very scary. So I've been hearing the word correction thrown around,
yes lately, and I think I know what it means,
but also like, I don't really at all. That's okay,
it's just a fancy way of saying the market's crashing.
Speaker 1 (09:16):
No, a market correction is not necessarily a crash, but
a market correction happens when the share market drops by
ten to twenty percent from its most recent peak, so
not from what it is today, from what its most
recent peak is, and we know that it's already heading
downwards at the moment, and to contextualize that a little
(09:38):
bit more, the market's going down, Yes, but in your lifetime, Beck,
this is going to happen seven times. And if we
look back at history and go, well, what happened in
previous market crashes, we know that the market has gone
down and then it's gone back up and some so
we do not have experience where the market has crashed
(10:00):
and it stays crashed, right, And I think that that's
good to understand here, because I think a lot of
the time we go, well, what does it mean if
the market crashes, are not going to lose all my money? Yes,
you will lose all your money if you take it
out of your investment portfolio and accept the lower amount
that your portfolio is currently valued at. But if you
stayed invested and waited until it crept back up, long
(10:21):
term investors are winners. So back to correction. A correction
is or it's called a correction because it's basically the
market giving itself like a little bit of a reset.
I would say, it's kind of like, well, maybe we
got a little bit of ahead of ourselves, Like maybe
we got a little bit too confident. We're going to
peg ourselves back a little bit. And that's not necessarily
(10:44):
a bad thing. So both the SMP five hundred in
the US, which is essentially the top five hundred companies
in the US, and the ASX here in Australia have
dropped into correction territory this month. So if you're seeing
that on the news and people are talking about a
market correction, that's essentially what's happened. There has been a
peak and it's a minimum of ten percent down. That's
(11:04):
all that means, so what does that mean? At the moment,
we're seeing hopeful his short term volatility play out across
global markets corrections. I think that they feel very uncomfortable
because you've logged into your investment portfolio, Like Beck, if
you logged into Charesis right now, I can always guarantee yeap,
she's gone down. She's gone down. Does that feel good? No,
(11:24):
it's scary. I've been. I think it's really comforting to know.
It's really comforting to talk about how these things actually
happen quite often. And like, yes, your portfolio right now, Beck,
it's valued at less. That doesn't feel good only if
you yes, exactly. I have taught you everything. But at
the moment, it doesn't feel good. But it means that
(11:45):
we can ride it out and it's going to come
back up. How good is that to know? Because you're
not accepting a loss, and so many of us, if
we don't have that level of education or that level
of confidence in understanding investing, we kind of week out
and go, I'm just going to take my money out.
I feel like I've lost enough. I don't want to
lose more. But you're accepting less. In this house, Beck,
(12:08):
we don't accept less in any part of our life,
do we know, especially when it comes to investing. Yeah, so,
on average, sorry to tell you this, a correction is
going to happen on average about every two years. Okay, well, David,
it's not a sign that something in our system is broken,
but rather the market's just do and what the market does,
(12:28):
And that doesn't mean it's always exciting.
Speaker 3 (12:30):
It's just moving in cycles, absolutely, and she's free to
go up and down exactly.
Speaker 1 (12:35):
Bet. Corrections are part of how market cycles work. I
think they're uncomfortable, yes, but they are totally normal. And look,
after the break, we're going to talk about some of
the biggest market dips in history, and what happened next
might actually surprise you a little bit, Beck, So stick around, guys,
(12:56):
welcome back. We are talking share market dips. But I
promise we are here to stress you out. In fact,
history gives us a lot of reasons to stay calm
when the market actually gets a little bit scary. So
I'm hearing a lot of terms.
Speaker 3 (13:09):
Yes, they're actually familiar to me in my community, but
for different reasons.
Speaker 1 (13:13):
Right bear, oh market, Yeah, we've really we've reframed that.
I don't say peg before too. Bear market is nothing
like what it is to you, Okay, yeah, and I
mean they're exciting. Yeah, like that's all good, that's all
good for you. It's exciting. I mean a bear market
in terms of the investment world is not. I mean
(13:34):
it maybe is just like hibernating, like big, warm, hug
maybe gorgeous. Yeah, okay, Like let's try and reframe that.
Speaker 2 (13:41):
Right.
Speaker 1 (13:42):
So there's a bear market and there's a bull market. Right,
So a bull market, if you think of the characteristics
of a bull, A bull is an aggressive animal. It
charges it a red flag. It's going up. A bear market,
it's like hibernation. Sleep here, we're going We're going to
go backwards. Yeah, so that we can come out of
(14:03):
this well rested. Right, So, a bear market is definitely
the more dramatic cousin of a correction, you could say,
so like you have a correction before you have a
bear market. Essentially, a bear market is when the market
falls by twenty percent or more from a recent high
and it tends to stick around for a while. We're
(14:25):
talking months. It can even stick around for years or
even a couple of years, depending on what's driving it.
Like the global financial crisis, bear market COVID bit of
a bear market. Bear markets usually come with what do
you say, like broader economic issues, things like rising unemployment,
slower growth, or bigger global shocks. So they're more than
(14:48):
just like a bit of volatility or like a little
bit of a dip. They're actually a deeper downturn that
takes much longer to recover from. So slight. Yeah, And
I like to think of the bear as kind of
like the market's going into hibernation mode because that feels
much more comfortable than saying it's dropped to pick. So
I'm like, all right, yeah, it's red, but it's in hibernation.
(15:09):
Now's the time. What do you do in hibernation? You stockpile,
you save all your nuts. Get cozy. Yeah, you get cozy,
You get comfy, You do what you need to do
because you're going to come out of hibernation at some point,
right like some's coming baby.
Speaker 3 (15:22):
Oh yeah, you're going to come out fresh as a daisy,
ready to tackle the world.
Speaker 1 (15:26):
So very different to what it means in your community. Yes,
so the ASX has dropped, but at this point in time,
not enough for us to say that we're currently in
a bear market. Okay, okay, got you, but I'll let
you know if we are in a bear market, thank you.
We'll be making a lot of bear content, but apparently
not the type of bear content you're into. A haha.
Speaker 4 (15:45):
We could do both. I'm sure we could try and collab.
We could collab. I think we'd be good at this.
You let me know how you think that's going to work. Yes,
I'll do, or I'll come to you with some draft ideas.
So I get the sense of the media's kind of
like just to be safe, being maybe.
Speaker 1 (15:59):
A little bit dream Oh, they're so dramatic. When media dramatic,
it's truebody cares when your share portfolios just bopping along? Yeah,
were you going to put that on the front page
of the newspaper? Share portfolio performance expected, Like, oh great,
no worries. Financial advisor was correct, Like how they are
(16:21):
at least at the time of US recording. And honestly,
they love to cause a little bit of panic. I've
spoken to you guys about the emotional journey of investing
before at the peak, like when people are like, it's
like Bitcoin, My favorite example is Bitcoin. Remember when people
were like, if you're not investing in bitcoin, you're an idiot, like,
and every man in his dog was like investing in bitcoin,
(16:44):
and then you had fomo oh yeah, because everyone was
doing it but you and you thought you were going
to miss out. But that's actually the point in time
that is maximum risk. And then on the opposite of that,
when people are being really dramatic and they're like, the
stock market sucks, great, that might actually be an opportunity
for me to invest, because you're trying to knock my confidence.
(17:04):
And when you're trying to knock my confidence, you are
being successful with a number of people, which means they're
not investing, which means maybe I've got an opportunity to
buy some discount shares right, love to see it. Yeah,
keep on being dramatic market, and keep on being dramatic media,
because I actually love when my shares are undervalued because
(17:25):
I'm stocking up for winter baby. Oh yeah, we're reaping
the rule war exactly. So this is where if we
look at history we can kind of like help calm
the panic. Because every bear market we've ever been through, Yeah,
twenty percent drop sounds like it sucks, but we've always recovered.
There's not been one time in history where a bear
market hasn't come back to be a bull market. And
(17:47):
if we look at the last one hundred and twenty
four years here in Australia, which is exactly how long
the Australian share market has existed, the market has ended
the year down just twenty four times. Out of one
hundred and twenty four times that the market has ended
in Australia, just twenty four times, it's ended down a
(18:09):
one hundred times it has ended up, and that's only
nineteen percent of the time, which is not that bad.
So that means that more than eighty percent of the
time it's ended up. Even when we've had some psychotic
wild years including wars and financial crisis and pandemics, like,
we've only ended down a few times. Right, Oh, that's
(18:31):
not that bad, that's pretty good. That's boring for the
front of a newspaper. That's so boring, Beck And some
of the best years, honestly came after the worst years.
And I'm not saying it just recovered and got back
to where it was and we're going to take credit
for that. But like in two thousand and eight is
when the global financial crisis happened, and I think that's
(18:51):
you know, if you're listening to this podcast, you have
an idea of that, but you're very likely to have
not experienced that individually, because in two thousand and eight,
a lot of you were in school, or you were
just coming out of school, or you weren't investing at
that point in time. But in two thousand and eight,
beck the market dropped by forty percent. That would have
(19:11):
made anybody run for the hills. That's scary as the
scary number. In two thousand and nine, it bounced back
with a thirty nine zero point six percent game. Okay,
when all the way back and then came all the
way forward and now it's grown and some. And then
after COVID, so remember the COVID crash, everyone was absolutely
spitting it like unemployment was at its peak because obviously
(19:33):
everyone was working from home. Every man and his dog
was being made redundant. The market then returned by seventeen
point one percent in twenty twenty one. She thrivees so
like she comes back. She's a redemption queen. She's always
trying to reinvent herself and it's worked every single time.
And then if we go back to a time when
you and I weren't alive Beck in nineteen eighty three,
(19:56):
right after the recession. I remember, yeah you do, I
have heard of it. I've told you about the recession
before I was probably like twenty twenty eight. Yeah, yeah, yeah,
I think so. Yeah, yeah, the market actually surged by
sixty six point eight percent. WHOA like imagine those returns? Like,
imagine during the recession, obviously, lots of people were struggling.
Please don't get me wrong, it's not what we're talking about.
(20:18):
We're here to talk about investment. But imagine during the
recession if you saw the markets dropping and you bought
a whole heap of shares because you were like, this
is an opportunity, and then the market the year after
surged by sixty six point eight percent. We love laugh baby,
you would be cheering exactly. So, while history doesn't repeat
itself exactly, I think these examples show that what recovery
(20:42):
periods can be incredibly strong. Yeah, and that happens even
after significant dips. And like, my job is to help
you feel confident about your investing journey, because lots of
you are freaking out right now, being like what the heck?
They like my investment portfolio is down, so I think
that makes me feel confident. And when I'm looking at
my investment portfolio and I'm like, oh my goodness, this
(21:05):
feels like trash. Reframing it and being like, well, actually,
this is what history has said. Yep, maybe I should
be investing more. And you're doing a great job, because
this is very, very comforting.
Speaker 3 (21:17):
So if the market has historically always recovered, yeah, as
we know, why does everyone freak out the second.
Speaker 1 (21:24):
We see it?
Speaker 3 (21:24):
Oh?
Speaker 1 (21:25):
Baby? We are inherently emotional, yeah, Like have you met
a human that is not inherently emotional? And also, I
guess we're thinking what if this time it doesn't come
back exactly because we are, if not anything super dramatic,
ourselves like unfortunately, the market when it comes to investing
might be very logical, but people are deeply emotional and
(21:46):
at a very primal level, we are hunter gatherers and
we are anxious about these things, and we want to
stockpile our resources to make sure we don't have a
time where we don't have enough. Makes sense, And then
overlaying our money story. If you've been through you know,
financial hardship that is going to hit even harder. We
(22:06):
are emotional like, and that is okay, But our brains
they're not built for the share market. Our brains are
built in a very linear way, and the share market
works in a very compounding way. And that is actually
I'm not saying the concept is hard to comprehend, but
actually making that happen is very hard for our brains
(22:27):
to wrap it around. Like, at the end of the day,
we are wired for survival. So when we see our
investments drop, our brain just goes threat. That is a
threat that is very scary, and we go into fight
or flight. It's just going to happen the same way
that if you heard like a smoke alarm or something
go off at two am. It kicks off a fear
(22:47):
response that tell us to do something, do anything, beck,
do anything you need to stop the perceived loss. I
don't want my house burning down. Like that is exactly
what is happening. And because of something called loss aversion,
psychologists have actually found that a loss feels twice as
painful as anything good we gained. Huh, how annoying that sucks.
(23:09):
So a ten percent drop to your portfolio feels much
more dramatic than if you've got a ten percent game.
If you got a ten percent game, you're like, yeah, cool,
you got a ten percent loss. You're like, what the heck,
I didn't sign up for this?
Speaker 3 (23:22):
Oh man, So it is true, right, yeah, that makes sense,
that makes sense.
Speaker 1 (23:26):
And then what do we do. I'm good at this,
I'm extra actually good at this at three am. Oh yeah, tastrophizing.
So this is the way your brain jumps to the
worst case scenario every single time, Like the market drops
a little and then suddenly, Beck, you did it before,
it's all over. The market's never going to recover. What
(23:46):
if it just doesn't recover this time, she's never coming back.
I should actually just sell everything and I should hide
and I'm just going to keep my money under my mattress.
Live love, laugh, Like that is going to work for me.
It's actually your brain trying to protect you. And that's
so nice. That's thanks your brain. Yeah, turn off. Yes,
that's cute, but you can chill out. Yeah, just stop,
just stop. You are being overprotective right now, and that
(24:09):
often leads to the exact kind of decisions that hurt
your long term performance. One out of ten, don't do
that to me, Like we need to be able to
reframe it and be like, thanks for you actually being
a little bit overbearing right now, and I don't align
with that as an investor.
Speaker 3 (24:25):
Appreciate your concerns, but nothing to worry about exactly, exactly,
and at three am.
Speaker 1 (24:31):
That's very hard to negotiate.
Speaker 3 (24:33):
Hard.
Speaker 1 (24:33):
And it's not that people are irrational, it's that money
is deeply emotional, and emotional decisions beck can never make
for the best investment strategy. Oh, I cane. Like I
was talking to someone the other day about their hex
stet and they're like, yeah, but if I just paid
off And I was like, cool, So if you paid
off your entire hex stet, what's that indexing at. It's
(24:55):
indexing at like, let's just say four percent. What's the
share market return at like, oh, nine and a half
percent on average? Like okay, cool, So if we had
a return of four percent or nine and a half percent,
which is better. Oh, that's a good way to look
at where are you putting your money? Ah in the
share market?
Speaker 3 (25:12):
Yeah?
Speaker 1 (25:12):
Okay? Why? Oh well, I don't like debt. I'm deeply
emotional about this. It makes me feel like trash. I
get it, but we need to reframe these things so
that our investment strategy is not just emotional. It's not
just going well that would feel good. I get it,
I really do. And I won't keep talking about Hex
because I could. We should do another episode on Hex.
(25:32):
We should, we should?
Speaker 3 (25:34):
So what should we be doing to beat our emotional brains?
Beat them, get in the bin.
Speaker 1 (25:39):
Like our emotional brain can be really helpful, but like
we're switching to our logical brain, and we have to
remember that our brain is actually reacting to fear, it's
not reacting to facts. But you can actually work around
it because sometimes facts come into it and they give
us that stability. Right the second I go, okay, back,
but like, let's look at the bigger picture ABCD, and
you go, that actually makes me feel better because now
(26:01):
I'm being a bit more logical about it. So first
thing we're going to do. You're not going to be
surprised here, baby, when in down zoom out, Yeah, long
term charts show that recovery is normal and today's drop
is just it's just one part of the story. There's
a whole other story. Zoom out, baby, yep, stop refreshing.
Maybe let's not check our portfolio every single day that's
(26:23):
maybe just a reminder for me, not necessarily for everybody else.
But if you're doing what I'm doing, cut it out.
It is not helpful unless you're logging in to invest more.
We don't need to be checking our portfolio consistently because
you know what that does, fuels anxiety. We don't need
that in our lives. We're going to stick to the plan.
(26:43):
So you know how I hop on and on about
having an investment strategy and having a plan. This is why,
because we need to stick to that plan right now
to make sure that future us isn't impacted. So we're
going to remind ourselves of our goals. If you're investing
for the future, you're not investing for this weekend and
be so don't let short term fear change the strategy
that you've set up for future success. And then, honestly,
(27:08):
paper losses aren't real. Like this is probably silly but
makes sense to me. You log into your investing app
and it says you've lost money. You haven't lost money. Yeah,
you actually haven't lost a bloody thing, just numbers on
a screen. You still have the same amount of shares, right,
did you lose any shares? Right? Did you lose actually
any assets? No? No, But what does that number say?
(27:31):
That number says that if you sold your assets today
and you still have those same ten assets that you
had yesterday, they're just going to pay you less. Like
if I came to you and beck you owned a
house and you said my house is worth five hundred
thousand dollars, and I knock on your door and say, hey,
beck On to buy your house and you go, great,
I'm on the market anyway, I go four hundred thousand dollars.
(27:52):
What are you going to do? I want to say, no, no,
it's worth more. That's me. Yeah, that's nasty. You are
undervaluing me. I'm not accepting that loss. So I'm not
going to be accepting that. Thank you. I'm going to
wait for a better buyer. That is such a good
way to I'm going to wait for someone else, and
I'm going to wait until they're confident that this is
(28:13):
as sexy a our set as I think it is.
I'm going to wait for my five hundred thousand dollars value. Right,
such a great paper. Losses are not real. You only
lose money if you sell your assets and then lock
in those losses. Which to be a little bit fancy.
In investment world, that's called crystallizing a loss. So if
we crystallize a loss, we've accepted less for something that
(28:35):
is worth more. Yeah, okay, that's not that she's on
the money vibe. No, that's not how we ask spirit.
So that's exactly why I literally say, don't invest money
that you're going to need in the next couple of years,
because you know, if you're like, well, be I need it, well,
you're going to have to accept some losses to get
that money back. Yeah, that's not the life we want
to live, which is why we always have to have
(28:56):
an emergency fund to access some cash. So we're never
selling our portfolio at a less than good time. So yes,
for example, if you're like thinking of investing your house deposit,
which a lot of people in our community are, like,
I'm saving up for my first home, you're thinking, oh
my gosh, I'm just gonna pop it in the share
market because love me some sexy returns and I'm going
to try and get a little bit of a boost
(29:17):
that could backfire. Like imagine if you've done that at
the start of this year. Yeah, and then you're planning
on buying in like June, Are you pulling your money
out now at a loss? Like unless you're planning on
riding the wave and you're like very happy to go, Okay,
well the market's down, I'm going to put off buying
for another year. Yeah, Like I would never be investing
that amount of money because investing only works when you
(29:39):
give it time. It's a long term game, not a
quick term win. Yeah, that's a great I could harp
on and on about that. I mean, I'm happy to listen,
but I do you want to buckle in?
Speaker 3 (29:50):
No? No, No, we're trying to wrap this episode. I
do want to know, like what about individual stocks? Like
how do I know if something I own is just
dipping with the market or actually tanking? Yeah, look, at
the end of the day, it is a very good question,
and there's actually no perfect way to.
Speaker 1 (30:06):
Know in the moment. Sure, but there are a few
signs that could help you get a better sense of
what's going on. And I teach this in a lot
more depth in my investing masterclass. But like, it might
be a dip if I guess the broader market or
the sector is down. So like if you've got a
tech stock, and you're worried about it, Like, look at
the tech sector, is that down in general? Right? There's
(30:27):
no major company specific drama in the headlines. So remember
when After Pay was going through all of that, like
it was all in the media, made sense that it
might be down. The business still seems strong overall, So
if they still have like solid leadership or decent revenue
or product people are still using, it's probably just part
of the dip. Or if it has a history of
(30:47):
bouncing back from past volatility, I would say that it's
just part of the dip, but it might be more
dramatic or like something that's maybe not a good investment,
if it's like falling real hard when the rest of
the market is not falling, or if there's like lots
of media about it and every man in his dog
has an opinion on them, like there's profit warnings or
(31:08):
there's a big scandal, or like the executives are walking out,
or it's part of a trend, so like maybe it's
been sliding for a little while and this is just
speeding it up, or it was driven more by hype
than fundamentals. So we see this a lot in bitcoin
and cryptocurrencies, where people got so excited and bought heaps
(31:29):
of it, but it wasn't actually a valuable asset. It
was just more expensive because of the hype around it.
And now people have gotten board of it and they're like, oh,
this isn't actually all it piped out to be, right,
So that's probably what I would be thinking.
Speaker 3 (31:43):
Okay, okay, So what if I'm like I just don't
have the brain for deep diving into company reports, Like
I'm not a finance because you've hired me to be
your analysts, right, yeah, but how am I supposed to
keep up with all of it? If you can listen
to my podcast, I can just move in with you,
do you want to. I've got a spare room.
Speaker 1 (32:01):
Your podcast, You got a podcast? No? No, But I'm
a full finance nerd, right. I went to the budget
last week, and I don't think I've ever found Golds
so hard about saying the Minister for Finance and Women
do be for God's work. Well, I don't know if
it's God's work, but it's definitely some nerdy work. But like,
(32:22):
I don't even have time for that at this point.
And that's why personally, most of my investing portfolio is
made up of ETFs. When you invest in an ETF,
and this isn't a recommendation, this is just like my
investment strategy. You're essentially buying like a tiny slice of
a really big basket of companies and assets. And behind
that basket is a team of very intelligent professionals who
(32:45):
are watching it like hawks. And I kind of like
the idea of that, because I used to be someone
who had a maximum of I think at one point
I had twelve different individual shares and I was checking
that every week and revaluing things and rebalancing and you know,
making lots of changes and tweaks and having to deep
(33:05):
dive on every single individual company. I just don't have
time for that. Like, the performance on an ETF was
literally comparable, if not better, and I was like, I'm
just trying to be a fancy here. I'm going to
go back to ETFs. I still play with individual shares
because I love the idea of a company that I
believe in, and like, I do want a deep dive
(33:25):
into your annual reports. I do want to read your
CEO report, like, but more on an interest level than
my future wealth is dependent on this level so I
think you know, at the end of the day, if
a stock within an ETF starts slipping, somebody else is
like checking in on it. And if it's not part
of a wider dip, a fund manager is literally going
(33:48):
to go in and evaluate if that share needs to
get kicked out of your portfolio or not. And they're
going to do it for you. You don't have to
lift a finger. And I like, if you buy an
ETF and then it has a crappy share in it,
they're going to get rid of it beck and replace
it with something that does perform. And I love that
for me. Yeah, okay, So I like having a team
of money nerds doing the work for you. Yeah, that's
(34:08):
really sweet. And even this money nerd has that in place. Well,
every money nerd needs the money nerd exactly, so I
don't have to obsess over every company in my atmory,
that's not your responsibility. If you're buying an ETF, it
is no longer your responsibility, And like that's the whole point.
You're not expected to be a stock picker at that point.
You're leveraging the expertise of these fund managers who are
(34:29):
working like dogs behind the scene because they always, like
fund managers are inherently competitive. I've never met a fund
manager who is not deeply in competition with every single
other fund manager on LinkedIn. Yeah, like they want to
be the best fund manager ever, So they're always looking
at other ETFs and trying to outperform those and looking
at what their strategy like their nerds. I love it. Yeah,
(34:52):
I don't have the capacity for that. Taking my money,
please manage it. It's like having a team of money
nerds who are like doing the work for you. And
of course I think it's always good to understand what
you're investing in. But the beauty of ETFs is that
they can help you stay diversified and take some pressure
off managing every single detail yourself. God, that's good. I
want to go out for my oatla Tebek. Yeah, for sure.
Speaker 3 (35:15):
And you don't have time if you're managing your own
funt exactly.
Speaker 1 (35:19):
So I guess everyone just chill. We feel better, Okay,
we feel better about this. I don't know. I do
feel a lot better.
Speaker 3 (35:26):
I feel a lot better, but I guess I like, well,
this entire podcast was for you, so yeah, and it's fine.
Speaker 1 (35:31):
It doesn't actually matter that it doesn't. I do feel better.
Speaker 3 (35:35):
Thank you.
Speaker 1 (35:35):
V Well. I think we'll wrap there then, because honestly
I need another coffee. But if you still want to
know more about why I believe you shouldn't panic about
the markets, we did actually do another episode a couple
of weeks ago, and I'm going to link that in
the show notes if you don't want to click the link.
It was called Everyone's Panicking about the Market b Here
is why I am not. And it's a really good
one to come back to when the headlines are just
(35:58):
getting a little bit loud. We all get anxious. We
are deeply emotional as human beings, and you know what,
that can be a value, just not when it comes
to our share PORTFOLIOO. And if this episode Beck has
helped you feel a little bit calmer about everything that's
going on, I want you to send it to a
friend who's currently freaking out about their portfolio right now.
(36:18):
And you know what, every single one of us who
is employed in Australia has a superannuation fund. You all
have portfolios. You all need to be caring about that,
and we need a friend to tell us don't hit
the panic button, girlfriend, do not change your risk profile
just because you're worried. Yes, anyway, I'm done here.
Speaker 3 (36:36):
Great Core VD, and don't forget to like and subscribe
while you're here. It really helps us keep bringing these
episodes to you so you can understand what's going on
in the world and stay on track with your investing journey. Baby,
I've got your back, and we will see you for
a little lighter of an episode on Friday.
Speaker 1 (36:51):
You'll see you, hi, guys. Did by shared on Cheese
on the Money is general in nature and does not
consider your individual circumstances. She's on the Money exists purely
for educational purposes and should not be relied upon to
make an investment or financial decision. If you do choose
(37:13):
to buy a financial product, read the PDS TMD and
obtain appropriate financial advice tailored towards your needs. Victoria Divine
and She's on the Money are authorized representatives of Money
Shoper Pty Ltd ABN three two one six four nine
two seven seven zero eight AFSL four five one two
eight nine
Hello.
Speaker 2 (00:01):
My name is Satasha Nabananga Bamblet. I'm a proud or
the Order Kerni Whaltbury and a waddery woman. And before
we get started on She's on the Money podcast, I
would like to acknowledge the traditional custodians of the land
of which this podcast is recorded on a wondery country,
acknowledging the elders, the ancestors and the next generation coming
(00:22):
through as this podcast is about connecting, empowering, knowledge sharing
and the storytelling of you to make a difference for
today and lasting impact for tomorrow.
Speaker 1 (00:33):
Let's get into it. She's on the Money, She's on
the Money.
Speaker 3 (00:57):
Hello, and welcome to She's on the Money, the podcast
that keeps your investments growing and your stress levels low
even when your portfolio is more red than your ex's flags.
Speaker 1 (01:06):
I'm beck you'r is it in investing?
Speaker 3 (01:07):
Newbie who's got a bunch of questions and a lot
of feelings about what the market's doing right now? You're
probably the same, I imagine. So I just sit down with
the woman who has seen it all before and live
to tell the tale. Victory Divine retired financial advisor, long
time investor and someone who doesn't panic when the market dips.
Speaker 1 (01:25):
I'm feel sick when the market dips, though I'm not
gonna feel sick, a little bit sick. I don't think
anybody likes seeing that the quote lost some money, right,
and I know that that's not the case. But like,
find me someone who logs into their investment platform and goes, oh,
it's in the red perfect great, Well, actually this like
what I mean, I do reframe it. I'm like, okay,
(01:46):
well that is actually an opportunity. Maybe I'll tip some
more money. Yes, I get it, but even I have
to check myself.
Speaker 3 (01:51):
And be like ill, And then I'm like, oh, right,
Like at what point do we stop tipping money into it?
Speaker 1 (01:57):
Because I was doing the same.
Speaker 3 (01:58):
I was like, oh, it's gone down, maybe i'll But
then I don't know where it's coming from because I've
got so many things and I don't.
Speaker 1 (02:02):
Know how to read my portfolio. But true, it's true.
Well we're going to talk about it today, but before
we get into it, I do want to like, is
it called time stamping or you tell people the day
that you're recording this. Oh yeah, so we're going to
timestamp this episode because we are recording this on the
eve of what Trump has dramatically dubbed Liberation Day. Wow.
(02:23):
So he is making in the next twenty four hours
from when we're recording this a very big announcement where
he's going to potentially announce a whole heap of like
a new round of tariff information and so that will
actually significantly impact the economy. So right now we're talking
about what has happened, and you know, I'm going to
(02:44):
talk about Trump's new tariffs when they come in, but
we don't have that information right now. But I didn't
want to like hold off on this episode to wait
for more information. So we'll talk about it and then
we'll probably talk about it again. But I don't want
you to think, oh, VS not taking into consideration X,
Y and Z babies because I don't live in the future.
I would love that, but it's so fair. Yeah, So
(03:05):
some of what I'm about to say might actually already
be playing out. And if so, guys, I am the oracle,
Like you can refer to me as the oracle. If
it's not playing out, pretend you never heard this, Like,
we are not living in the in between. So Trump
might have actually changed his mind entirely and just called
the whole thing off because that's actually an option for him,
(03:28):
and it wouldn't be the first time. It wouldn't shock
me because remember when he was like, oh, TikTok ban whatever,
We'll just not do that anymore. Yeah, just his rogue. Honestly,
there's something about American politics that just cheeks me hooked.
It's like watching reality TV. For me is like I'm obsessed,
(03:48):
it is. But I think it's really important that at
the time of recording, there has been over the last
few weeks a lot of global uncertainty swirling around and
it's hitting investor confidence, like I'm seeing it in our
community a lot a lot of people are asking, what's
going on? Why are the market's down, Victoria, how does
(04:09):
this work? So Wall Street, which is the American ASX,
has been sliding for weeks, and the ripple effect has
definitely already made its way to Australia, and so we
are starting to see that the changes in Australia are
not nearly as dramatic as America, but that is usually
what happens. So something big will happen in the US,
(04:30):
their share market plummets, ours will dip, so like we
are often replicating the American markets, but in a softer way,
I would say, And that usually happens because the Australian
economy is held up in a different way than the American.
But when it comes to confidence, Beck, if you see
your American friend going through something, you're probably going to
(04:51):
get a bit worried too, right, or I've always been
confused by this because I know people do say that,
like it's like the American I didn't really understand it.
So forgive me if I'm but the American dollars week
so the Australian dollar, Like I've just never understood the
link there because there's trade agreements between the countries I see.
And ultimately, when we're talking about investor sentiment, we are
(05:14):
talking about how confident someone is in something. Right, So
if you're seeing your friends and right now, we are
seeing a lot of what is happening in America translating
to Australia much quicker than it has historically because of
social media, because you're able to learn much quicker what's
going on in the US and get really worried about
(05:34):
it like historically, Beck, I'm just going to make a
broad brush stereotypical statement. I'm pretty sure you're not sitting
down every morning with the newspaper reading through all of
the information about the economy. That's correct. No, so you're
not doing that, But historically that's how you would have
gained your information on what's going on economically. Now you
(05:56):
jump on TikTok and people are like, what the hell
Trump's tear marfs are crazy, and you're like, oh, wow,
that is crazy. I wonder how that impacts me, and
your confidence is going to be knocked. So Australia is
responding a lot quicker to what's going on in the
US because our confidence gets knocked whenever we think that
there's something negative going on with money. Sure, so it's
(06:17):
not to say that that means that we are significantly impacted.
I don't know what these tariffs are going to mean
for US, but it does mean that, you know, I
get a bit worried when I see what's going on
in the US. I go, oh, well, what does that
mean for me? What does that mean for my investment portfolio?
I own international shares, my international company is okay, and
(06:40):
you know when that happens, I go, oh, maybe I'll
just hold off and investing for a little while, and
if lots of people do that, the market goes down. Yes,
So that's kind of like I'm not saying that that's
the only way they're linked, but in the way that
you're talking, that is how they're linked. Okay, But ultimately,
investors are worried that Trump is going to spark a
(07:02):
trade war, which is terrifying, and that typically means slower
global growth. It means that there are going to be
higher costs and more pressure on company earnings. And when
the US is a little bit wobbly on its feet,
especially inspectors lack tech and manufacturing and commodities. Australia tends
(07:23):
to feel that too because we trade with them on
those things and also Beck to put into the middle
of this. Yesterday, the RBA has decided to hold interest rates,
which I wasn't surprised about. A lot of people were
asking MeV do you think that they are going to
drop interest rates again or do you think that they
are going to increase them. No, I just thought that
(07:43):
they were going to hold because we just want to
see what's going on with the economy for a little
bit longer. The RBA are being quite cautious, and they've
only just started cutting rates, right, they can't just set
the expectation that they'll do this every month because the
economy might get too confident that we need to just
slow and steady wins the race, and they don't want
(08:04):
to jump the gun with another move until there's a
little bit more clarity on what this means for inflation
and spending and the Australian's economy in a broader sense.
So right now, I would say, and I feel like
I'm just waffling. I hope it's interesting, but right now
I would say the market is a little bit on edge.
We're not panicked, but we're definitely a little bit nervous,
(08:26):
like we're being a little bit more cautious. And as always,
whenever anybody is uncertain, that actually leads to volatility in
the market. So volatility is I feel like it's a
very fancy word for just saying that the market goes
up and down, Like volatility is how quickly it ebbs
and it flows. But in saying that, at the time
(08:47):
of recording, investors are we're just waiting to see what
Liberation Day brings. Okay, I'm just so interested to know
what they hell Trump? Like, why why does that have
to be called Liberation Day? Trump?
Speaker 3 (08:59):
It's very It's so, I know it does sound very,
very scary. So I've been hearing the word correction thrown around,
yes lately, and I think I know what it means,
but also like, I don't really at all. That's okay,
it's just a fancy way of saying the market's crashing.
Speaker 1 (09:16):
No, a market correction is not necessarily a crash, but
a market correction happens when the share market drops by
ten to twenty percent from its most recent peak, so
not from what it is today, from what its most
recent peak is, and we know that it's already heading
downwards at the moment, and to contextualize that a little
(09:38):
bit more, the market's going down, Yes, but in your lifetime, Beck,
this is going to happen seven times. And if we
look back at history and go, well, what happened in
previous market crashes, we know that the market has gone
down and then it's gone back up and some so
we do not have experience where the market has crashed
(10:00):
and it stays crashed, right, And I think that that's
good to understand here, because I think a lot of
the time we go, well, what does it mean if
the market crashes, are not going to lose all my money? Yes,
you will lose all your money if you take it
out of your investment portfolio and accept the lower amount
that your portfolio is currently valued at. But if you
stayed invested and waited until it crept back up, long
(10:21):
term investors are winners. So back to correction. A correction
is or it's called a correction because it's basically the
market giving itself like a little bit of a reset.
I would say, it's kind of like, well, maybe we
got a little bit of ahead of ourselves, Like maybe
we got a little bit too confident. We're going to
peg ourselves back a little bit. And that's not necessarily
(10:44):
a bad thing. So both the SMP five hundred in
the US, which is essentially the top five hundred companies
in the US, and the ASX here in Australia have
dropped into correction territory this month. So if you're seeing
that on the news and people are talking about a
market correction, that's essentially what's happened. There has been a
peak and it's a minimum of ten percent down. That's
(11:04):
all that means, so what does that mean? At the moment,
we're seeing hopeful his short term volatility play out across
global markets corrections. I think that they feel very uncomfortable
because you've logged into your investment portfolio, Like Beck, if
you logged into Charesis right now, I can always guarantee yeap,
she's gone down. She's gone down. Does that feel good? No,
(11:24):
it's scary. I've been. I think it's really comforting to know.
It's really comforting to talk about how these things actually
happen quite often. And like, yes, your portfolio right now, Beck,
it's valued at less. That doesn't feel good only if
you yes, exactly. I have taught you everything. But at
the moment, it doesn't feel good. But it means that
(11:45):
we can ride it out and it's going to come
back up. How good is that to know? Because you're
not accepting a loss, and so many of us, if
we don't have that level of education or that level
of confidence in understanding investing, we kind of week out
and go, I'm just going to take my money out.
I feel like I've lost enough. I don't want to
lose more. But you're accepting less. In this house, Beck,
(12:08):
we don't accept less in any part of our life,
do we know, especially when it comes to investing. Yeah, so,
on average, sorry to tell you this, a correction is
going to happen on average about every two years. Okay, well, David,
it's not a sign that something in our system is broken,
but rather the market's just do and what the market does,
(12:28):
And that doesn't mean it's always exciting.
Speaker 3 (12:30):
It's just moving in cycles, absolutely, and she's free to
go up and down exactly.
Speaker 1 (12:35):
Bet. Corrections are part of how market cycles work. I
think they're uncomfortable, yes, but they are totally normal. And look,
after the break, we're going to talk about some of
the biggest market dips in history, and what happened next
might actually surprise you a little bit, Beck, So stick around, guys,
(12:56):
welcome back. We are talking share market dips. But I
promise we are here to stress you out. In fact,
history gives us a lot of reasons to stay calm
when the market actually gets a little bit scary. So
I'm hearing a lot of terms.
Speaker 3 (13:09):
Yes, they're actually familiar to me in my community, but
for different reasons.
Speaker 1 (13:13):
Right bear, oh market, Yeah, we've really we've reframed that.
I don't say peg before too. Bear market is nothing
like what it is to you, Okay, yeah, and I
mean they're exciting. Yeah, like that's all good, that's all
good for you. It's exciting. I mean a bear market
in terms of the investment world is not. I mean
(13:34):
it maybe is just like hibernating, like big, warm, hug
maybe gorgeous. Yeah, okay, Like let's try and reframe that.
Speaker 2 (13:41):
Right.
Speaker 1 (13:42):
So there's a bear market and there's a bull market. Right,
So a bull market, if you think of the characteristics
of a bull, A bull is an aggressive animal. It
charges it a red flag. It's going up. A bear market,
it's like hibernation. Sleep here, we're going We're going to
go backwards. Yeah, so that we can come out of
(14:03):
this well rested. Right, So, a bear market is definitely
the more dramatic cousin of a correction, you could say,
so like you have a correction before you have a
bear market. Essentially, a bear market is when the market
falls by twenty percent or more from a recent high
and it tends to stick around for a while. We're
(14:25):
talking months. It can even stick around for years or
even a couple of years, depending on what's driving it.
Like the global financial crisis, bear market COVID bit of
a bear market. Bear markets usually come with what do
you say, like broader economic issues, things like rising unemployment,
slower growth, or bigger global shocks. So they're more than
(14:48):
just like a bit of volatility or like a little
bit of a dip. They're actually a deeper downturn that
takes much longer to recover from. So slight. Yeah, And
I like to think of the bear as kind of
like the market's going into hibernation mode because that feels
much more comfortable than saying it's dropped to pick. So
I'm like, all right, yeah, it's red, but it's in hibernation.
(15:09):
Now's the time. What do you do in hibernation? You stockpile,
you save all your nuts. Get cozy. Yeah, you get cozy,
You get comfy, You do what you need to do
because you're going to come out of hibernation at some point,
right like some's coming baby.
Speaker 3 (15:22):
Oh yeah, you're going to come out fresh as a daisy,
ready to tackle the world.
Speaker 1 (15:26):
So very different to what it means in your community. Yes,
so the ASX has dropped, but at this point in time,
not enough for us to say that we're currently in
a bear market. Okay, okay, got you, but I'll let
you know if we are in a bear market, thank you.
We'll be making a lot of bear content, but apparently
not the type of bear content you're into. A haha.
Speaker 4 (15:45):
We could do both. I'm sure we could try and collab.
We could collab. I think we'd be good at this.
You let me know how you think that's going to work. Yes,
I'll do, or I'll come to you with some draft ideas.
So I get the sense of the media's kind of
like just to be safe, being maybe.
Speaker 1 (15:59):
A little bit dream Oh, they're so dramatic. When media dramatic,
it's truebody cares when your share portfolios just bopping along? Yeah,
were you going to put that on the front page
of the newspaper? Share portfolio performance expected, Like, oh great,
no worries. Financial advisor was correct, Like how they are
(16:21):
at least at the time of US recording. And honestly,
they love to cause a little bit of panic. I've
spoken to you guys about the emotional journey of investing
before at the peak, like when people are like, it's
like Bitcoin, My favorite example is Bitcoin. Remember when people
were like, if you're not investing in bitcoin, you're an idiot, like,
and every man in his dog was like investing in bitcoin,
(16:44):
and then you had fomo oh yeah, because everyone was
doing it but you and you thought you were going
to miss out. But that's actually the point in time
that is maximum risk. And then on the opposite of that,
when people are being really dramatic and they're like, the
stock market sucks, great, that might actually be an opportunity
for me to invest, because you're trying to knock my confidence.
(17:04):
And when you're trying to knock my confidence, you are
being successful with a number of people, which means they're
not investing, which means maybe I've got an opportunity to
buy some discount shares right, love to see it. Yeah,
keep on being dramatic market, and keep on being dramatic media,
because I actually love when my shares are undervalued because
(17:25):
I'm stocking up for winter baby. Oh yeah, we're reaping
the rule war exactly. So this is where if we
look at history we can kind of like help calm
the panic. Because every bear market we've ever been through, Yeah,
twenty percent drop sounds like it sucks, but we've always recovered.
There's not been one time in history where a bear
market hasn't come back to be a bull market. And
(17:47):
if we look at the last one hundred and twenty
four years here in Australia, which is exactly how long
the Australian share market has existed, the market has ended
the year down just twenty four times. Out of one
hundred and twenty four times that the market has ended
in Australia, just twenty four times, it's ended down a
(18:09):
one hundred times it has ended up, and that's only
nineteen percent of the time, which is not that bad.
So that means that more than eighty percent of the
time it's ended up. Even when we've had some psychotic
wild years including wars and financial crisis and pandemics, like,
we've only ended down a few times. Right, Oh, that's
(18:31):
not that bad, that's pretty good. That's boring for the
front of a newspaper. That's so boring, Beck And some
of the best years, honestly came after the worst years.
And I'm not saying it just recovered and got back
to where it was and we're going to take credit
for that. But like in two thousand and eight is
when the global financial crisis happened, and I think that's
(18:51):
you know, if you're listening to this podcast, you have
an idea of that, but you're very likely to have
not experienced that individually, because in two thousand and eight,
a lot of you were in school, or you were
just coming out of school, or you weren't investing at
that point in time. But in two thousand and eight,
beck the market dropped by forty percent. That would have
(19:11):
made anybody run for the hills. That's scary as the
scary number. In two thousand and nine, it bounced back
with a thirty nine zero point six percent game. Okay,
when all the way back and then came all the
way forward and now it's grown and some. And then
after COVID, so remember the COVID crash, everyone was absolutely
spitting it like unemployment was at its peak because obviously
(19:33):
everyone was working from home. Every man and his dog
was being made redundant. The market then returned by seventeen
point one percent in twenty twenty one. She thrivees so
like she comes back. She's a redemption queen. She's always
trying to reinvent herself and it's worked every single time.
And then if we go back to a time when
you and I weren't alive Beck in nineteen eighty three,
(19:56):
right after the recession. I remember, yeah you do, I
have heard of it. I've told you about the recession
before I was probably like twenty twenty eight. Yeah, yeah, yeah,
I think so. Yeah, yeah, the market actually surged by
sixty six point eight percent. WHOA like imagine those returns? Like,
imagine during the recession, obviously, lots of people were struggling.
Please don't get me wrong, it's not what we're talking about.
(20:18):
We're here to talk about investment. But imagine during the
recession if you saw the markets dropping and you bought
a whole heap of shares because you were like, this
is an opportunity, and then the market the year after
surged by sixty six point eight percent. We love laugh baby,
you would be cheering exactly. So, while history doesn't repeat
itself exactly, I think these examples show that what recovery
(20:42):
periods can be incredibly strong. Yeah, and that happens even
after significant dips. And like, my job is to help
you feel confident about your investing journey, because lots of
you are freaking out right now, being like what the heck?
They like my investment portfolio is down, so I think
that makes me feel confident. And when I'm looking at
my investment portfolio and I'm like, oh my goodness, this
(21:05):
feels like trash. Reframing it and being like, well, actually,
this is what history has said. Yep, maybe I should
be investing more. And you're doing a great job, because
this is very, very comforting.
Speaker 3 (21:17):
So if the market has historically always recovered, yeah, as
we know, why does everyone freak out the second.
Speaker 1 (21:24):
We see it?
Speaker 3 (21:24):
Oh?
Speaker 1 (21:25):
Baby? We are inherently emotional, yeah, Like have you met
a human that is not inherently emotional? And also, I
guess we're thinking what if this time it doesn't come
back exactly because we are, if not anything super dramatic,
ourselves like unfortunately, the market when it comes to investing
might be very logical, but people are deeply emotional and
(21:46):
at a very primal level, we are hunter gatherers and
we are anxious about these things, and we want to
stockpile our resources to make sure we don't have a
time where we don't have enough. Makes sense, And then
overlaying our money story. If you've been through you know,
financial hardship that is going to hit even harder. We
(22:06):
are emotional like, and that is okay, But our brains
they're not built for the share market. Our brains are
built in a very linear way, and the share market
works in a very compounding way. And that is actually
I'm not saying the concept is hard to comprehend, but
actually making that happen is very hard for our brains
(22:27):
to wrap it around. Like, at the end of the day,
we are wired for survival. So when we see our
investments drop, our brain just goes threat. That is a
threat that is very scary, and we go into fight
or flight. It's just going to happen the same way
that if you heard like a smoke alarm or something
go off at two am. It kicks off a fear
(22:47):
response that tell us to do something, do anything, beck,
do anything you need to stop the perceived loss. I
don't want my house burning down. Like that is exactly
what is happening. And because of something called loss aversion,
psychologists have actually found that a loss feels twice as
painful as anything good we gained. Huh, how annoying that sucks.
(23:09):
So a ten percent drop to your portfolio feels much
more dramatic than if you've got a ten percent game.
If you got a ten percent game, you're like, yeah, cool,
you got a ten percent loss. You're like, what the heck,
I didn't sign up for this?
Speaker 3 (23:22):
Oh man, So it is true, right, yeah, that makes sense,
that makes sense.
Speaker 1 (23:26):
And then what do we do. I'm good at this,
I'm extra actually good at this at three am. Oh yeah, tastrophizing.
So this is the way your brain jumps to the
worst case scenario every single time, Like the market drops
a little and then suddenly, Beck, you did it before,
it's all over. The market's never going to recover. What
(23:46):
if it just doesn't recover this time, she's never coming back.
I should actually just sell everything and I should hide
and I'm just going to keep my money under my mattress.
Live love, laugh, Like that is going to work for me.
It's actually your brain trying to protect you. And that's
so nice. That's thanks your brain. Yeah, turn off. Yes,
that's cute, but you can chill out. Yeah, just stop,
just stop. You are being overprotective right now, and that
(24:09):
often leads to the exact kind of decisions that hurt
your long term performance. One out of ten, don't do
that to me, Like we need to be able to
reframe it and be like, thanks for you actually being
a little bit overbearing right now, and I don't align
with that as an investor.
Speaker 3 (24:25):
Appreciate your concerns, but nothing to worry about exactly, exactly,
and at three am.
Speaker 1 (24:31):
That's very hard to negotiate.
Speaker 3 (24:33):
Hard.
Speaker 1 (24:33):
And it's not that people are irrational, it's that money
is deeply emotional, and emotional decisions beck can never make
for the best investment strategy. Oh, I cane. Like I
was talking to someone the other day about their hex
stet and they're like, yeah, but if I just paid
off And I was like, cool, So if you paid
off your entire hex stet, what's that indexing at. It's
(24:55):
indexing at like, let's just say four percent. What's the
share market return at like, oh, nine and a half
percent on average? Like okay, cool, So if we had
a return of four percent or nine and a half percent,
which is better. Oh, that's a good way to look
at where are you putting your money? Ah in the
share market?
Speaker 3 (25:12):
Yeah?
Speaker 1 (25:12):
Okay? Why? Oh well, I don't like debt. I'm deeply
emotional about this. It makes me feel like trash. I
get it, but we need to reframe these things so
that our investment strategy is not just emotional. It's not
just going well that would feel good. I get it,
I really do. And I won't keep talking about Hex
because I could. We should do another episode on Hex.
(25:32):
We should, we should?
Speaker 3 (25:34):
So what should we be doing to beat our emotional brains?
Beat them, get in the bin.
Speaker 1 (25:39):
Like our emotional brain can be really helpful, but like
we're switching to our logical brain, and we have to
remember that our brain is actually reacting to fear, it's
not reacting to facts. But you can actually work around
it because sometimes facts come into it and they give
us that stability. Right the second I go, okay, back,
but like, let's look at the bigger picture ABCD, and
you go, that actually makes me feel better because now
(26:01):
I'm being a bit more logical about it. So first
thing we're going to do. You're not going to be
surprised here, baby, when in down zoom out, Yeah, long
term charts show that recovery is normal and today's drop
is just it's just one part of the story. There's
a whole other story. Zoom out, baby, yep, stop refreshing.
Maybe let's not check our portfolio every single day that's
(26:23):
maybe just a reminder for me, not necessarily for everybody else.
But if you're doing what I'm doing, cut it out.
It is not helpful unless you're logging in to invest more.
We don't need to be checking our portfolio consistently because
you know what that does, fuels anxiety. We don't need
that in our lives. We're going to stick to the plan.
(26:43):
So you know how I hop on and on about
having an investment strategy and having a plan. This is why,
because we need to stick to that plan right now
to make sure that future us isn't impacted. So we're
going to remind ourselves of our goals. If you're investing
for the future, you're not investing for this weekend and
be so don't let short term fear change the strategy
that you've set up for future success. And then, honestly,
(27:08):
paper losses aren't real. Like this is probably silly but
makes sense to me. You log into your investing app
and it says you've lost money. You haven't lost money. Yeah,
you actually haven't lost a bloody thing, just numbers on
a screen. You still have the same amount of shares, right,
did you lose any shares? Right? Did you lose actually
any assets? No? No, But what does that number say?
(27:31):
That number says that if you sold your assets today
and you still have those same ten assets that you
had yesterday, they're just going to pay you less. Like
if I came to you and beck you owned a
house and you said my house is worth five hundred
thousand dollars, and I knock on your door and say, hey,
beck On to buy your house and you go, great,
I'm on the market anyway, I go four hundred thousand dollars.
(27:52):
What are you going to do? I want to say, no, no,
it's worth more. That's me. Yeah, that's nasty. You are
undervaluing me. I'm not accepting that loss. So I'm not
going to be accepting that. Thank you. I'm going to
wait for a better buyer. That is such a good
way to I'm going to wait for someone else, and
I'm going to wait until they're confident that this is
(28:13):
as sexy a our set as I think it is.
I'm going to wait for my five hundred thousand dollars value. Right,
such a great paper. Losses are not real. You only
lose money if you sell your assets and then lock
in those losses. Which to be a little bit fancy.
In investment world, that's called crystallizing a loss. So if
we crystallize a loss, we've accepted less for something that
(28:35):
is worth more. Yeah, okay, that's not that she's on
the money vibe. No, that's not how we ask spirit.
So that's exactly why I literally say, don't invest money
that you're going to need in the next couple of years,
because you know, if you're like, well, be I need it, well,
you're going to have to accept some losses to get
that money back. Yeah, that's not the life we want
to live, which is why we always have to have
(28:56):
an emergency fund to access some cash. So we're never
selling our portfolio at a less than good time. So yes,
for example, if you're like thinking of investing your house deposit,
which a lot of people in our community are, like,
I'm saving up for my first home, you're thinking, oh
my gosh, I'm just gonna pop it in the share
market because love me some sexy returns and I'm going
to try and get a little bit of a boost
(29:17):
that could backfire. Like imagine if you've done that at
the start of this year. Yeah, and then you're planning
on buying in like June, Are you pulling your money
out now at a loss? Like unless you're planning on
riding the wave and you're like very happy to go, Okay,
well the market's down, I'm going to put off buying
for another year. Yeah, Like I would never be investing
that amount of money because investing only works when you
(29:39):
give it time. It's a long term game, not a
quick term win. Yeah, that's a great I could harp
on and on about that. I mean, I'm happy to listen,
but I do you want to buckle in?
Speaker 3 (29:50):
No? No, No, we're trying to wrap this episode. I
do want to know, like what about individual stocks? Like
how do I know if something I own is just
dipping with the market or actually tanking? Yeah, look, at
the end of the day, it is a very good question,
and there's actually no perfect way to.
Speaker 1 (30:06):
Know in the moment. Sure, but there are a few
signs that could help you get a better sense of
what's going on. And I teach this in a lot
more depth in my investing masterclass. But like, it might
be a dip if I guess the broader market or
the sector is down. So like if you've got a
tech stock, and you're worried about it, Like, look at
the tech sector, is that down in general? Right? There's
(30:27):
no major company specific drama in the headlines. So remember
when After Pay was going through all of that, like
it was all in the media, made sense that it
might be down. The business still seems strong overall, So
if they still have like solid leadership or decent revenue
or product people are still using, it's probably just part
of the dip. Or if it has a history of
(30:47):
bouncing back from past volatility, I would say that it's
just part of the dip, but it might be more
dramatic or like something that's maybe not a good investment,
if it's like falling real hard when the rest of
the market is not falling, or if there's like lots
of media about it and every man in his dog
has an opinion on them, like there's profit warnings or
(31:08):
there's a big scandal, or like the executives are walking out,
or it's part of a trend, so like maybe it's
been sliding for a little while and this is just
speeding it up, or it was driven more by hype
than fundamentals. So we see this a lot in bitcoin
and cryptocurrencies, where people got so excited and bought heaps
(31:29):
of it, but it wasn't actually a valuable asset. It
was just more expensive because of the hype around it.
And now people have gotten board of it and they're like, oh,
this isn't actually all it piped out to be, right,
So that's probably what I would be thinking.
Speaker 3 (31:43):
Okay, okay, So what if I'm like I just don't
have the brain for deep diving into company reports, Like
I'm not a finance because you've hired me to be
your analysts, right, yeah, but how am I supposed to
keep up with all of it? If you can listen
to my podcast, I can just move in with you,
do you want to. I've got a spare room.
Speaker 1 (32:01):
Your podcast, You got a podcast? No? No, But I'm
a full finance nerd, right. I went to the budget
last week, and I don't think I've ever found Golds
so hard about saying the Minister for Finance and Women
do be for God's work. Well, I don't know if
it's God's work, but it's definitely some nerdy work. But like,
(32:22):
I don't even have time for that at this point.
And that's why personally, most of my investing portfolio is
made up of ETFs. When you invest in an ETF,
and this isn't a recommendation, this is just like my
investment strategy. You're essentially buying like a tiny slice of
a really big basket of companies and assets. And behind
that basket is a team of very intelligent professionals who
(32:45):
are watching it like hawks. And I kind of like
the idea of that, because I used to be someone
who had a maximum of I think at one point
I had twelve different individual shares and I was checking
that every week and revaluing things and rebalancing and you know,
making lots of changes and tweaks and having to deep
(33:05):
dive on every single individual company. I just don't have
time for that. Like, the performance on an ETF was
literally comparable, if not better, and I was like, I'm
just trying to be a fancy here. I'm going to
go back to ETFs. I still play with individual shares
because I love the idea of a company that I
believe in, and like, I do want a deep dive
(33:25):
into your annual reports. I do want to read your
CEO report, like, but more on an interest level than
my future wealth is dependent on this level so I
think you know, at the end of the day, if
a stock within an ETF starts slipping, somebody else is
like checking in on it. And if it's not part
of a wider dip, a fund manager is literally going
(33:48):
to go in and evaluate if that share needs to
get kicked out of your portfolio or not. And they're
going to do it for you. You don't have to
lift a finger. And I like, if you buy an
ETF and then it has a crappy share in it,
they're going to get rid of it beck and replace
it with something that does perform. And I love that
for me. Yeah, okay, So I like having a team
of money nerds doing the work for you. Yeah, that's
(34:08):
really sweet. And even this money nerd has that in place. Well,
every money nerd needs the money nerd exactly, so I
don't have to obsess over every company in my atmory,
that's not your responsibility. If you're buying an ETF, it
is no longer your responsibility, And like that's the whole point.
You're not expected to be a stock picker at that point.
You're leveraging the expertise of these fund managers who are
(34:29):
working like dogs behind the scene because they always, like
fund managers are inherently competitive. I've never met a fund
manager who is not deeply in competition with every single
other fund manager on LinkedIn. Yeah, like they want to
be the best fund manager ever, So they're always looking
at other ETFs and trying to outperform those and looking
at what their strategy like their nerds. I love it. Yeah,
(34:52):
I don't have the capacity for that. Taking my money,
please manage it. It's like having a team of money
nerds who are like doing the work for you. And
of course I think it's always good to understand what
you're investing in. But the beauty of ETFs is that
they can help you stay diversified and take some pressure
off managing every single detail yourself. God, that's good. I
want to go out for my oatla Tebek. Yeah, for sure.
Speaker 3 (35:15):
And you don't have time if you're managing your own
funt exactly.
Speaker 1 (35:19):
So I guess everyone just chill. We feel better, Okay,
we feel better about this. I don't know. I do
feel a lot better.
Speaker 3 (35:26):
I feel a lot better, but I guess I like, well,
this entire podcast was for you, so yeah, and it's fine.
Speaker 1 (35:31):
It doesn't actually matter that it doesn't. I do feel better.
Speaker 3 (35:35):
Thank you.
Speaker 1 (35:35):
V Well. I think we'll wrap there then, because honestly
I need another coffee. But if you still want to
know more about why I believe you shouldn't panic about
the markets, we did actually do another episode a couple
of weeks ago, and I'm going to link that in
the show notes if you don't want to click the link.
It was called Everyone's Panicking about the Market b Here
is why I am not. And it's a really good
one to come back to when the headlines are just
(35:58):
getting a little bit loud. We all get anxious. We
are deeply emotional as human beings, and you know what,
that can be a value, just not when it comes
to our share PORTFOLIOO. And if this episode Beck has
helped you feel a little bit calmer about everything that's
going on, I want you to send it to a
friend who's currently freaking out about their portfolio right now.
(36:18):
And you know what, every single one of us who
is employed in Australia has a superannuation fund. You all
have portfolios. You all need to be caring about that,
and we need a friend to tell us don't hit
the panic button, girlfriend, do not change your risk profile
just because you're worried. Yes, anyway, I'm done here.
Speaker 3 (36:36):
Great Core VD, and don't forget to like and subscribe
while you're here. It really helps us keep bringing these
episodes to you so you can understand what's going on
in the world and stay on track with your investing journey. Baby,
I've got your back, and we will see you for
a little lighter of an episode on Friday.
Speaker 1 (36:51):
You'll see you, hi, guys. Did by shared on Cheese
on the Money is general in nature and does not
consider your individual circumstances. She's on the Money exists purely
for educational purposes and should not be relied upon to
make an investment or financial decision. If you do choose
(37:13):
to buy a financial product, read the PDS TMD and
obtain appropriate financial advice tailored towards your needs. Victoria Divine
and She's on the Money are authorized representatives of Money
Shoper Pty Ltd ABN three two one six four nine
two seven seven zero eight AFSL four five one two
eight nine
Popular Podcasts
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com