April 29, 2025 • 19 mins
The current stock market is turbulent – what's the smartest way to safeguard your investments?
In this week's episode of the Friends With Money Podcast, Money Magazine's Michelle Baltazar chats with Juliana Rajkovic, investment advisor at Escala Partners, about managing investment portfolios during these uncertain times.
They explore the market shocks sparked by U.S. tariffs, the crucial practice of stress-testing and rebalancing, and strategies for incorporating defensive assets such as fixed income and gold. They also delve into how economic changes are influencing various asset classes, including global and Australian shares, property, and private debt.
00:00 Friends with Money podcast open
00:20 Meet Juliana Rajkovic, investment advisor at Escala Partners
01:23 Market uncertainty and volatility
02:15 Recession forecasts and portfolio rebalancing
06:37 Defensive assets and fixed income
09:37 Exploring private debt and credit strategies
11:04 Australian equities and property investments
14:47 Currency considerations and final advice
17:45 Recap and closing remarks
#friendswithmoney #michellebaltazar #julianarajkovic #stockmarket
Email Us: podcast@moneymag.com.au
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Welcome to the Friends with Money podcast, brought to you
by Money Magazine, creating financial freedom for Australians since nineteen
ninety nine.
Speaker 2 (00:12):
Hello, you're listening to Friends with Money. I'm Michelle Baltazar,
editor in chief at Money Magazine. Thank you for joining us.
Our guest today is Juliana Raykovic, partner and investment advisor
at Escalap Partners. Prior to joining Escala, Juliana has also
worked at an investment bank and a leading stockbroker before
finding her new home at this leading financial advisory firm.
(00:36):
A bit of background on Escalap Partners to provide context
on our chat. Escala offers financial advice and investment management
services to ultra high net worth individuals, families and family offices,
and charitable foundations. Their client portfolios ranged from five million
to one hundred and fifty million in assets in short,
(00:58):
high stakes all around. So I appreciate Juliana hopping onto
our podcast today to provide her insights on what to
make of the extraordinary time we find ourselves today. Juliana,
thank you for joining us.
Speaker 3 (01:10):
Thanks so much for having me, Michelle. I'm really excited
to be here now. Excited also a little bit For
me personally, I'm a little bit panicky. I just feel
like the world has turned upside down in the last week.
Speaker 4 (01:23):
So tell us, how have you been.
Speaker 2 (01:26):
Have you been working over the weekend, you know, working
twenty four hours?
Speaker 4 (01:31):
What has it been like. Oh, it's a.
Speaker 3 (01:33):
Really fascinating time in the market, isn't it. And it's
absolutely I think quite a historic time as well, and
I think conversations like this are really important for hopefully
helping people cut through some of the noise. So market
uncertainty and volatility is certainly up following the recent tariff
announcements that we had on the US Liberation Day, and
(01:56):
we've seen some huge moves across all equity markets, not
just the US even though we've seen this before. These
are the times where our clients really do count on us.
So a lot of times been spent talking to the tame,
but obviously reaching out to our clients as well well.
Speaker 2 (02:15):
Some people are describing the US President Donald Trump as
a shock agent. So for example, on the fifth of April,
Investment Bank JP Morgan predicted a sixty percent chance of
the global economy entering a recession by the year end.
So that's up from forty percent previously. Let's start with that.
(02:37):
Surely it's not every day that recession forecasts moves so dramatically.
Is it a case of reassessing your portfolio and making
decisions in the next month, in the next three months,
a little bit now and a little more later.
Speaker 4 (02:52):
How does that look like? In practical terms, it's.
Speaker 3 (02:56):
Really important to stress test your portfolio on an ongoing
basis and do it periodically, so not just in times
of market stress, even in times where we have strong
market gains like last year where equity markets are up
twenty nine percent. So rebalancing should be done when required,
(03:17):
and should be done substantially if and when your goals change.
But I'd also let investors know to not be too reactive.
Speaker 4 (03:25):
To markets as well. There is a fine line.
Speaker 2 (03:28):
So you talked about rebalancing, and I'm trying to think
about if you have a financial advisor, that would happen automatically,
for example. But what if you don't have a financial advisor,
you have a let's say, a portfolio that's maybe a
million dollars or less, how do you rebalance or a
(03:50):
stress test?
Speaker 3 (03:52):
You can still develop some of those healthy habits and
really sit down on a periodic basis with yourself, whether
that be quarterly, whether it be semi annually, and really
sit down and look at your portfolio in terms of
how it's performed versus your expectations, your long term investment objectives.
(04:14):
What's the volatility like in that portfolio? Is it something
that you're going to be comfortable with? You know, if
the portfolio does decrease by ten percent or twenty percent,
if we do enter a recession, like you mentioned, how
much volatility can you withstand? How much illiquidity can you withstand?
So they're the sorts of questions that we would encourage
(04:36):
all investors to ask themselves on a periodic basis.
Speaker 2 (04:40):
So I'm now imagining our listeners listening to us right now,
and there'll be two types of investors. Those who are
prepared for this unlikely scenario, so they stress tested, they're
well diversified, and perhaps they're ready to kind of adjust
their portfolio after what's happened, and no one could have
(05:01):
predicted that there would be this sweeping tariff cuts and
what it means for the markets. Then we have another
group of investors who are like probably listening to us
right now and going Okay, Michelle, fine, I should have
done that a year ago or two years ago. But
now I'm sitting at a portfolio that is overweight in
(05:22):
US equities, or I've got international ETFs and I'm down
ten percent or fifteen percent. I've learned my lesson. Now
where do we go from here? It's a really good question.
Speaker 3 (05:37):
So the first thing that I would be saying, if
you are overweight US equities, you've probably done quite well
over the last couple of years. Remember, you've probably done
about we should have been doing close to thirty percent
in twenty twenty four, about twenty four to twenty five
percent over the last two years as an annualized figure.
Speaker 4 (05:57):
So that's a really good result.
Speaker 3 (06:00):
Now, like to remind investors that those time tested principles
do work, and those are diversification, remaining disciplined, and really
maintaining a long term view. So there's a real balance
between staying calm, being consistent, and not letting your emotions
drive the decisions, which is really important when it feels
(06:21):
like there's a lot of uncertainty in the world, when
there are media headlines that like to do a lot
of fear mongering. This is a period of repricing, and
it's potentially a regime shift. However, it's not the end
of the world.
Speaker 2 (06:37):
Let's move on to talking about defensive assets. So, now
that we've got recession forecasts going up, how can an
investor introduce more defensiveness into their portfolio.
Speaker 3 (06:51):
So we've always had a belief that asset allocation is key,
and our investment strategies for our clients are very much
based on their long term goals and objectives, and our
clients typically have very diversified portfolios, so they are invested
in cash, fixed income, equities, alternatives such as private equity,
(07:15):
private debt, venture capital, and even gold. So gold typically
is something that has been in the headlines recently, and
for those who aren't familiar with gold as an investment,
it typically acts as a hedge in uncertain markets, both
against inflation and geopolitical risk. And with gold, it's not
(07:38):
necessarily about time and goals, but about having a select
strategic allocation in your portfolio to cushion against market volatility
such as what we're seeing now.
Speaker 2 (07:50):
So now we've talked about global equities, we've talked about gold,
we haven't talked about fixed income. So what is the
state of right now for those who hold government bonds,
perhaps corporate bonds, and other types of fixed income products.
Speaker 3 (08:08):
Fixed income is an interesting one because six or seven
years ago, when rates were pretty much at zero, it
didn't really have much of a role to play in portfolios,
and if anything, it was dragging on returns. We didn't
get much from cash or term deposits, and even our
fixed income funds were offering four to five percent if
(08:31):
we were lucky. Obviously, since rates increased a couple of
years ago, fixed income as an asset class has now
become attractive all of a sudden, and it's back in play.
Many of our fixed income funds that we look at,
for instance, last year returned in the high single digits,
so between seven and a half to nine percent, which
(08:55):
is a seriously fantastic return if we compare it to
what equities have done historically. The ASEX two hundred, for instance,
has done about eight eight and a half percent historically
over the last forty years, so to be getting a
similar return from fixed income is very, very attractive from
a risk return perspective, fixed income provides stability in a
(09:17):
client's portfolio and in volatile times like this, when we're
seeing markets down ten fifteen percent in a matter of days.
Fixed income provides that stability, but it also provides clients
with that liquidity as well if they do need it.
Speaker 2 (09:37):
Now. In the broader theme of alternatives, let's talk about
private debt and private credits strategies. How will they perform
in this new world. Private debt is also a relatively
new asset class that's gained in popularity, of course over
the last couple of decades, and there is strong appeal.
(09:58):
While we're still in very much a low yield, high
volatile environment, private debt can buffer some of that volatility
in a client's portfolio while also assisting with their income
requirements due to the high yields offered through private debt funds.
It offers diversification, offers income, and it's very lowly correlated
(10:19):
with public markets as well. The one thing that I
would stress to investors is that liquidity and access are
key considerations, and certainly diversification and the manager that you're
using to access these private debt instruments is key. You
want a manager that is experienced and also a manager
(10:40):
that is highly diversified when it comes to the underlying loans.
In their portfolios. Now, I'm very aware that we've probably
done a tour around all the acid classes, and if
you're still listening up to this point, congratulations you We've
probably covered above four or five different asset classes there.
(11:02):
So let's bring it home. Firstly, let's talk about Australian equities.
How should they be adjusted or we assessed after Trump's
massive tariff plan announcement.
Speaker 3 (11:15):
Of course, so Australian equities over the last couple of
years have actually lagged global equities, and we've had quite
an overweight to global equities up until now, and that's
certainly been the right move given the outperformance of global
equities versus domestic but we are seeing that now change,
and certainly with the recent announcements, the tariffs to Australia
(11:37):
were almost on the friendlier side versus some of the
other countries that were hit, so that could certainly be
a positive for Australian equities, but that of course will
change if we do see a global recession and the
situation developing further as well. So it's still a little
bit too early to tell, but one of the things
(11:59):
I would also in courage investors to have a look
at is their Australian equity allocation overall? How much do
they have invested in Australian equities and is there a
home buyas there because ultimately Australia still is only three
percent of the global market and there are other places
to invest Japan, Europe and so on.
Speaker 2 (12:21):
And that proportion of the world markets hasn't changed in
the last three decades or so, it's been static between
three and five percent. Now, my favorite topic, let's talk
about property. Now, this is a massive part of any
typical portfolio. The research out there is that a typical
(12:42):
Australian family will own their own home and have one
or two investment properties. Should we start piling our money
on property now?
Speaker 4 (12:51):
With this big scare in the US.
Speaker 3 (12:54):
Property is always a tricky on and Ossie's to have
their love affair with property. That's or I wouldn't be
making any strong decisions or major decisions based on what
we've seen over the last couple of days, because that's
what it's been it's been over the last couple of days.
I think ultimately it's about reviewing what's right for you
(13:15):
and your long term objectives and goals, and if owning
a lifestyle property or another investment property is something that's
part of that, then sure, absolutely. I would also highlight
some of the regulatory changes that we've seen in some
of the states in Australia, which in fact have made
(13:36):
it far more onerous to own an investment property than
ever before. It's ownerus as a landlord, it's ownerus, even
if it's a lifestyle.
Speaker 4 (13:46):
Property as well.
Speaker 3 (13:47):
So I think that's just something investors really need to
weigh up when looking at property as an investment, how
much time it's going to take, and certainly the underlying
costs and the net return that they're going to get
for that property. After all the taxes have been paid,
after all the fees have been paid, after all the
maintenance costs have been paid, do you think that you'll
(14:08):
be getting a better return on that property versus cash?
That's equity's longer term And then if you think you do,
absolutely go for it. But I do think that should
be part of the conversation as well. Michelle Well said,
I don't think you're impressed about property, Joyanna. You've just
mentioned all the fees and also the heartache. But I
(14:30):
second your views there about regulation. So many changes happening,
even some general sweeping comments about don't invest in Victoria
because of the new rules there for holiday homes for example.
So now, finally, on a personal note, a couple of
(14:52):
my friends are going on a holiday and they ask me, Michelle,
what do I do with my money? It doesn't feel
like I'm going going to have us as enjoyable as
a holiday like when the Australian dollar was stronger two
months ago.
Speaker 2 (15:07):
So what is your takeaway message here? How will the
Australian currency perform versus the US currency and why is
the US currency strong at the moment despite the markets
going down.
Speaker 3 (15:23):
Currency is always a tricky one to pick, and certainly
over the last couple of years it hasn't really been
fun to travel overseas, has it with the dollar where
it's been.
Speaker 4 (15:33):
So i'd say, firstly, choose where.
Speaker 3 (15:35):
You're going to holiday based on the currency, and you
might have a better time. But on a more serious note,
currency is cyclical and we would deter clients from making
any major decisions solely based on currency and short term movements.
(15:56):
The Aussie dollar typically has a long term average of
about seventy cents.
Speaker 4 (16:02):
And I would be remiss if I was to make a.
Speaker 3 (16:05):
Call on where the Aussie dollar ends up by the
end of the week, let alone by the end of
the year. But I do think it should stabilize and
it will ultimately stabilize. I think, if anything, we should
use this currency weakness that we've seen as a real
reminder that you do need to diversify globally and not
just by geography but by asset class and your underlying
(16:28):
currency exposures. And I think that might be a nice
way of, you know, also talking about what we should
be leaving with investors with. And I think it's really
about staying calm, being consistent, and not letting your emotions
drive these decisions, because this is a period of repricing
(16:48):
and it is potentially a regime shift.
Speaker 4 (16:50):
But it's not the end of the world. So for
people that have got.
Speaker 3 (16:55):
Longer term time horizons, remember the power of compounding. It
needs time. Don't try to interrupt this by timing the
market or panic selling. It's about time in the market,
not timing the market, which we've all heard before.
Speaker 4 (17:11):
And sometimes what can.
Speaker 3 (17:14):
Actually happen is really significant outcomes, both positive and negative,
often come from rare events and in markets quite often
some of the biggest down days are followed by the
biggest up days, So keep that in mind when making
some of those decisions, and don't base your strategy on
(17:34):
today's headlines. Based it on what you're looking for longer term,
base it on your objectives, your tolerance to some of
the risk, and what you're ultimately trying to achieve.
Speaker 2 (17:45):
Well said Juliana, We've covered a lot of ground there,
and I like what you've said about staying calm, staying
true to your long term objectives. So to recap us,
secuits are down, but don't forget we've made some money
out of them in the last two three years at
two Local equities. Definitely have your local equities exposure or
(18:08):
your investments in ozsy stocks, but they are only three
percent of the global market. Now we move on to
a property. It sounds like it's more of a lifestyle
choice once you've weigh in all the fees and everything
else that you have to consider when investing in property,
and then finally, alternatives is a powerful tool to diversify. Juliana,
(18:31):
We appreciate you coming to the episode today, Thanks for
your time, Thanks for having me Michelle. Until next I'm
Michelle Baltaza, Bye for now.
Speaker 1 (18:42):
Thanks for listening to the Friends with Money podcast. For credible,
independent and easy to understand financial commentary, visit moneymag dot
com dot a. You Please remember that the views and
opinions expressed in this podcast are general in nature and further,
independent advice and recent search based on your personal circumstances
(19:02):
should be sought before making an investment decision
Welcome to the Friends with Money podcast, brought to you
by Money Magazine, creating financial freedom for Australians since nineteen
ninety nine.
Speaker 2 (00:12):
Hello, you're listening to Friends with Money. I'm Michelle Baltazar,
editor in chief at Money Magazine. Thank you for joining us.
Our guest today is Juliana Raykovic, partner and investment advisor
at Escalap Partners. Prior to joining Escala, Juliana has also
worked at an investment bank and a leading stockbroker before
finding her new home at this leading financial advisory firm.
(00:36):
A bit of background on Escalap Partners to provide context
on our chat. Escala offers financial advice and investment management
services to ultra high net worth individuals, families and family offices,
and charitable foundations. Their client portfolios ranged from five million
to one hundred and fifty million in assets in short,
(00:58):
high stakes all around. So I appreciate Juliana hopping onto
our podcast today to provide her insights on what to
make of the extraordinary time we find ourselves today. Juliana,
thank you for joining us.
Speaker 3 (01:10):
Thanks so much for having me, Michelle. I'm really excited
to be here now. Excited also a little bit For
me personally, I'm a little bit panicky. I just feel
like the world has turned upside down in the last week.
Speaker 4 (01:23):
So tell us, how have you been.
Speaker 2 (01:26):
Have you been working over the weekend, you know, working
twenty four hours?
Speaker 4 (01:31):
What has it been like. Oh, it's a.
Speaker 3 (01:33):
Really fascinating time in the market, isn't it. And it's
absolutely I think quite a historic time as well, and
I think conversations like this are really important for hopefully
helping people cut through some of the noise. So market
uncertainty and volatility is certainly up following the recent tariff
announcements that we had on the US Liberation Day, and
(01:56):
we've seen some huge moves across all equity markets, not
just the US even though we've seen this before. These
are the times where our clients really do count on us.
So a lot of times been spent talking to the tame,
but obviously reaching out to our clients as well well.
Speaker 2 (02:15):
Some people are describing the US President Donald Trump as
a shock agent. So for example, on the fifth of April,
Investment Bank JP Morgan predicted a sixty percent chance of
the global economy entering a recession by the year end.
So that's up from forty percent previously. Let's start with that.
(02:37):
Surely it's not every day that recession forecasts moves so dramatically.
Is it a case of reassessing your portfolio and making
decisions in the next month, in the next three months,
a little bit now and a little more later.
Speaker 4 (02:52):
How does that look like? In practical terms, it's.
Speaker 3 (02:56):
Really important to stress test your portfolio on an ongoing
basis and do it periodically, so not just in times
of market stress, even in times where we have strong
market gains like last year where equity markets are up
twenty nine percent. So rebalancing should be done when required,
(03:17):
and should be done substantially if and when your goals change.
But I'd also let investors know to not be too reactive.
Speaker 4 (03:25):
To markets as well. There is a fine line.
Speaker 2 (03:28):
So you talked about rebalancing, and I'm trying to think
about if you have a financial advisor, that would happen automatically,
for example. But what if you don't have a financial advisor,
you have a let's say, a portfolio that's maybe a
million dollars or less, how do you rebalance or a
(03:50):
stress test?
Speaker 3 (03:52):
You can still develop some of those healthy habits and
really sit down on a periodic basis with yourself, whether
that be quarterly, whether it be semi annually, and really
sit down and look at your portfolio in terms of
how it's performed versus your expectations, your long term investment objectives.
(04:14):
What's the volatility like in that portfolio? Is it something
that you're going to be comfortable with? You know, if
the portfolio does decrease by ten percent or twenty percent,
if we do enter a recession, like you mentioned, how
much volatility can you withstand? How much illiquidity can you withstand?
So they're the sorts of questions that we would encourage
(04:36):
all investors to ask themselves on a periodic basis.
Speaker 2 (04:40):
So I'm now imagining our listeners listening to us right now,
and there'll be two types of investors. Those who are
prepared for this unlikely scenario, so they stress tested, they're
well diversified, and perhaps they're ready to kind of adjust
their portfolio after what's happened, and no one could have
(05:01):
predicted that there would be this sweeping tariff cuts and
what it means for the markets. Then we have another
group of investors who are like probably listening to us
right now and going Okay, Michelle, fine, I should have
done that a year ago or two years ago. But
now I'm sitting at a portfolio that is overweight in
(05:22):
US equities, or I've got international ETFs and I'm down
ten percent or fifteen percent. I've learned my lesson. Now
where do we go from here? It's a really good question.
Speaker 3 (05:37):
So the first thing that I would be saying, if
you are overweight US equities, you've probably done quite well
over the last couple of years. Remember, you've probably done
about we should have been doing close to thirty percent
in twenty twenty four, about twenty four to twenty five
percent over the last two years as an annualized figure.
Speaker 4 (05:57):
So that's a really good result.
Speaker 3 (06:00):
Now, like to remind investors that those time tested principles
do work, and those are diversification, remaining disciplined, and really
maintaining a long term view. So there's a real balance
between staying calm, being consistent, and not letting your emotions
drive the decisions, which is really important when it feels
(06:21):
like there's a lot of uncertainty in the world, when
there are media headlines that like to do a lot
of fear mongering. This is a period of repricing, and
it's potentially a regime shift. However, it's not the end
of the world.
Speaker 2 (06:37):
Let's move on to talking about defensive assets. So, now
that we've got recession forecasts going up, how can an
investor introduce more defensiveness into their portfolio.
Speaker 3 (06:51):
So we've always had a belief that asset allocation is key,
and our investment strategies for our clients are very much
based on their long term goals and objectives, and our
clients typically have very diversified portfolios, so they are invested
in cash, fixed income, equities, alternatives such as private equity,
(07:15):
private debt, venture capital, and even gold. So gold typically
is something that has been in the headlines recently, and
for those who aren't familiar with gold as an investment,
it typically acts as a hedge in uncertain markets, both
against inflation and geopolitical risk. And with gold, it's not
(07:38):
necessarily about time and goals, but about having a select
strategic allocation in your portfolio to cushion against market volatility
such as what we're seeing now.
Speaker 2 (07:50):
So now we've talked about global equities, we've talked about gold,
we haven't talked about fixed income. So what is the
state of right now for those who hold government bonds,
perhaps corporate bonds, and other types of fixed income products.
Speaker 3 (08:08):
Fixed income is an interesting one because six or seven
years ago, when rates were pretty much at zero, it
didn't really have much of a role to play in portfolios,
and if anything, it was dragging on returns. We didn't
get much from cash or term deposits, and even our
fixed income funds were offering four to five percent if
(08:31):
we were lucky. Obviously, since rates increased a couple of
years ago, fixed income as an asset class has now
become attractive all of a sudden, and it's back in play.
Many of our fixed income funds that we look at,
for instance, last year returned in the high single digits,
so between seven and a half to nine percent, which
(08:55):
is a seriously fantastic return if we compare it to
what equities have done historically. The ASEX two hundred, for instance,
has done about eight eight and a half percent historically
over the last forty years, so to be getting a
similar return from fixed income is very, very attractive from
a risk return perspective, fixed income provides stability in a
(09:17):
client's portfolio and in volatile times like this, when we're
seeing markets down ten fifteen percent in a matter of days.
Fixed income provides that stability, but it also provides clients
with that liquidity as well if they do need it.
Speaker 2 (09:37):
Now. In the broader theme of alternatives, let's talk about
private debt and private credits strategies. How will they perform
in this new world. Private debt is also a relatively
new asset class that's gained in popularity, of course over
the last couple of decades, and there is strong appeal.
(09:58):
While we're still in very much a low yield, high
volatile environment, private debt can buffer some of that volatility
in a client's portfolio while also assisting with their income
requirements due to the high yields offered through private debt funds.
It offers diversification, offers income, and it's very lowly correlated
(10:19):
with public markets as well. The one thing that I
would stress to investors is that liquidity and access are
key considerations, and certainly diversification and the manager that you're
using to access these private debt instruments is key. You
want a manager that is experienced and also a manager
(10:40):
that is highly diversified when it comes to the underlying loans.
In their portfolios. Now, I'm very aware that we've probably
done a tour around all the acid classes, and if
you're still listening up to this point, congratulations you We've
probably covered above four or five different asset classes there.
(11:02):
So let's bring it home. Firstly, let's talk about Australian equities.
How should they be adjusted or we assessed after Trump's
massive tariff plan announcement.
Speaker 3 (11:15):
Of course, so Australian equities over the last couple of
years have actually lagged global equities, and we've had quite
an overweight to global equities up until now, and that's
certainly been the right move given the outperformance of global
equities versus domestic but we are seeing that now change,
and certainly with the recent announcements, the tariffs to Australia
(11:37):
were almost on the friendlier side versus some of the
other countries that were hit, so that could certainly be
a positive for Australian equities, but that of course will
change if we do see a global recession and the
situation developing further as well. So it's still a little
bit too early to tell, but one of the things
(11:59):
I would also in courage investors to have a look
at is their Australian equity allocation overall? How much do
they have invested in Australian equities and is there a
home buyas there because ultimately Australia still is only three
percent of the global market and there are other places
to invest Japan, Europe and so on.
Speaker 2 (12:21):
And that proportion of the world markets hasn't changed in
the last three decades or so, it's been static between
three and five percent. Now, my favorite topic, let's talk
about property. Now, this is a massive part of any
typical portfolio. The research out there is that a typical
(12:42):
Australian family will own their own home and have one
or two investment properties. Should we start piling our money
on property now?
Speaker 4 (12:51):
With this big scare in the US.
Speaker 3 (12:54):
Property is always a tricky on and Ossie's to have
their love affair with property. That's or I wouldn't be
making any strong decisions or major decisions based on what
we've seen over the last couple of days, because that's
what it's been it's been over the last couple of days.
I think ultimately it's about reviewing what's right for you
(13:15):
and your long term objectives and goals, and if owning
a lifestyle property or another investment property is something that's
part of that, then sure, absolutely. I would also highlight
some of the regulatory changes that we've seen in some
of the states in Australia, which in fact have made
(13:36):
it far more onerous to own an investment property than
ever before. It's ownerus as a landlord, it's ownerus, even
if it's a lifestyle.
Speaker 4 (13:46):
Property as well.
Speaker 3 (13:47):
So I think that's just something investors really need to
weigh up when looking at property as an investment, how
much time it's going to take, and certainly the underlying
costs and the net return that they're going to get
for that property. After all the taxes have been paid,
after all the fees have been paid, after all the
maintenance costs have been paid, do you think that you'll
(14:08):
be getting a better return on that property versus cash?
That's equity's longer term And then if you think you do,
absolutely go for it. But I do think that should
be part of the conversation as well. Michelle Well said,
I don't think you're impressed about property, Joyanna. You've just
mentioned all the fees and also the heartache. But I
(14:30):
second your views there about regulation. So many changes happening,
even some general sweeping comments about don't invest in Victoria
because of the new rules there for holiday homes for example.
So now, finally, on a personal note, a couple of
(14:52):
my friends are going on a holiday and they ask me, Michelle,
what do I do with my money? It doesn't feel
like I'm going going to have us as enjoyable as
a holiday like when the Australian dollar was stronger two
months ago.
Speaker 2 (15:07):
So what is your takeaway message here? How will the
Australian currency perform versus the US currency and why is
the US currency strong at the moment despite the markets
going down.
Speaker 3 (15:23):
Currency is always a tricky one to pick, and certainly
over the last couple of years it hasn't really been
fun to travel overseas, has it with the dollar where
it's been.
Speaker 4 (15:33):
So i'd say, firstly, choose where.
Speaker 3 (15:35):
You're going to holiday based on the currency, and you
might have a better time. But on a more serious note,
currency is cyclical and we would deter clients from making
any major decisions solely based on currency and short term movements.
(15:56):
The Aussie dollar typically has a long term average of
about seventy cents.
Speaker 4 (16:02):
And I would be remiss if I was to make a.
Speaker 3 (16:05):
Call on where the Aussie dollar ends up by the
end of the week, let alone by the end of
the year. But I do think it should stabilize and
it will ultimately stabilize. I think, if anything, we should
use this currency weakness that we've seen as a real
reminder that you do need to diversify globally and not
just by geography but by asset class and your underlying
(16:28):
currency exposures. And I think that might be a nice
way of, you know, also talking about what we should
be leaving with investors with. And I think it's really
about staying calm, being consistent, and not letting your emotions
drive these decisions, because this is a period of repricing
(16:48):
and it is potentially a regime shift.
Speaker 4 (16:50):
But it's not the end of the world. So for
people that have got.
Speaker 3 (16:55):
Longer term time horizons, remember the power of compounding. It
needs time. Don't try to interrupt this by timing the
market or panic selling. It's about time in the market,
not timing the market, which we've all heard before.
Speaker 4 (17:11):
And sometimes what can.
Speaker 3 (17:14):
Actually happen is really significant outcomes, both positive and negative,
often come from rare events and in markets quite often
some of the biggest down days are followed by the
biggest up days, So keep that in mind when making
some of those decisions, and don't base your strategy on
(17:34):
today's headlines. Based it on what you're looking for longer term,
base it on your objectives, your tolerance to some of
the risk, and what you're ultimately trying to achieve.
Speaker 2 (17:45):
Well said Juliana, We've covered a lot of ground there,
and I like what you've said about staying calm, staying
true to your long term objectives. So to recap us,
secuits are down, but don't forget we've made some money
out of them in the last two three years at
two Local equities. Definitely have your local equities exposure or
(18:08):
your investments in ozsy stocks, but they are only three
percent of the global market. Now we move on to
a property. It sounds like it's more of a lifestyle
choice once you've weigh in all the fees and everything
else that you have to consider when investing in property,
and then finally, alternatives is a powerful tool to diversify. Juliana,
(18:31):
We appreciate you coming to the episode today, Thanks for
your time, Thanks for having me Michelle. Until next I'm
Michelle Baltaza, Bye for now.
Speaker 1 (18:42):
Thanks for listening to the Friends with Money podcast. For credible,
independent and easy to understand financial commentary, visit moneymag dot
com dot a. You Please remember that the views and
opinions expressed in this podcast are general in nature and further,
independent advice and recent search based on your personal circumstances
(19:02):
should be sought before making an investment decision
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