1 00:00:04,110 --> 00:00:06,750 Sean Aylmer: Welcome to the Fear and Greed daily interview. I'm Sean 2 00:00:06,750 --> 00:00:10,649 Sean Aylmer: Aylmer. As we settle back into normal routines for 2023, 3 00:00:10,650 --> 00:00:13,800 Sean Aylmer: the kids are back at school. It's worth taking stock 4 00:00:13,800 --> 00:00:16,590 Sean Aylmer: of where markets are right now. This year so far 5 00:00:16,590 --> 00:00:20,730 Sean Aylmer: has been a much better story than 2022 with equities 6 00:00:20,910 --> 00:00:25,110 Sean Aylmer: broadly performing pretty well, especially in Australia. But can it 7 00:00:25,110 --> 00:00:28,200 Sean Aylmer: last? Remember, this is general information only and you should 8 00:00:28,200 --> 00:00:32,070 Sean Aylmer: seek professional advice before making any investment decisions. Chris Brycki 9 00:00:32,070 --> 00:00:36,510 Sean Aylmer: is the CEO of online investment advisor Stockspot. Chris, I'd 10 00:00:36,510 --> 00:00:38,640 Sean Aylmer: say you are almost a regular on Fear and Greed. 11 00:00:38,640 --> 00:00:39,630 Sean Aylmer: Well, you were last year. 12 00:00:39,630 --> 00:00:42,300 Chris Brycki: Yeah, I was on a few times and we talked 13 00:00:42,300 --> 00:00:44,580 Chris Brycki: on a whole range of different topics. So good to 14 00:00:44,580 --> 00:00:45,450 Chris Brycki: get back on this year. 15 00:00:45,600 --> 00:00:48,330 Sean Aylmer: Yes, it's because you're worth listening to. Now let's jump 16 00:00:48,330 --> 00:00:52,620 Sean Aylmer: into equities first. The ASX particularly. Been a great January, 17 00:00:52,620 --> 00:00:54,030 Sean Aylmer: great first month of the year. 18 00:00:54,480 --> 00:00:56,940 Chris Brycki: It has been. I mean, while everyone's been on holidays 19 00:00:56,940 --> 00:01:00,390 Chris Brycki: there's been a rocket under all markets and locally here 20 00:01:00,390 --> 00:01:03,840 Chris Brycki: the Aussie market's up about 5% in January. The US 21 00:01:03,840 --> 00:01:06,959 Chris Brycki: market, around the same. And actually the technology index in 22 00:01:06,959 --> 00:01:08,850 Chris Brycki: the US, which was really the one that got hammered 23 00:01:08,850 --> 00:01:11,520 Chris Brycki: the most last year, is up 9% in the month. 24 00:01:11,520 --> 00:01:14,790 Chris Brycki: So big market across all of the different share markets 25 00:01:14,790 --> 00:01:15,750 Chris Brycki: around the world really. 26 00:01:16,080 --> 00:01:17,190 Sean Aylmer: Okay, so why? 27 00:01:17,880 --> 00:01:20,040 Chris Brycki: Well, I think the main reason is that people are 28 00:01:20,040 --> 00:01:23,940 Chris Brycki: starting to feel that inflation is slowing around the world 29 00:01:23,940 --> 00:01:25,740 Chris Brycki: and starting to also see a bit of a cooling 30 00:01:25,740 --> 00:01:28,020 Chris Brycki: in the jobs market. And they're hopeful that this will 31 00:01:28,020 --> 00:01:30,630 Chris Brycki: mean that central banks can adopt a bit more of 32 00:01:30,630 --> 00:01:34,290 Chris Brycki: a relaxed approach to raising interest rates compared to last 33 00:01:34,290 --> 00:01:37,050 Chris Brycki: year where they were ratcheted up very quickly. And if 34 00:01:37,050 --> 00:01:39,090 Chris Brycki: they do that, then that would be positive for the 35 00:01:39,090 --> 00:01:42,270 Chris Brycki: economy. So people are betting that central banks won't keep 36 00:01:42,270 --> 00:01:44,790 Chris Brycki: on increasing interest rates at the same rate that they 37 00:01:44,790 --> 00:01:45,301 Chris Brycki: did last year. 38 00:01:45,301 --> 00:01:48,690 Sean Aylmer: I mean, I went away for three weeks over Christmas and 39 00:01:48,690 --> 00:01:50,610 Sean Aylmer: didn't follow the news at all and I came back, 40 00:01:50,610 --> 00:01:53,430 Sean Aylmer: Chris, and what surprised me somewhat was that everyone was saying, " 41 00:01:53,430 --> 00:01:55,800 Sean Aylmer: Well, Europe's not going into recession and the US might 42 00:01:55,800 --> 00:01:59,280 Sean Aylmer: go into the recession but it'll be mild." There seemed to 43 00:01:59,280 --> 00:02:02,460 Sean Aylmer: be real change in view on economic growth as well. 44 00:02:03,270 --> 00:02:05,250 Chris Brycki: There has been. And I think, I mean, people really 45 00:02:05,250 --> 00:02:07,830 Chris Brycki: probably put I think too much emphasis on whether an 46 00:02:07,830 --> 00:02:10,830 Chris Brycki: economy goes into recession or not. Historically, it doesn't have 47 00:02:10,830 --> 00:02:15,090 Chris Brycki: a huge impact on the share market. But actually, a 48 00:02:15,090 --> 00:02:17,880 Chris Brycki: bit counterintuitively, I think a lot of investors are actually 49 00:02:17,880 --> 00:02:21,150 Chris Brycki: hoping that things tip over and head towards a recession 50 00:02:21,150 --> 00:02:23,970 Chris Brycki: because if that does happen, it makes it more likely 51 00:02:23,970 --> 00:02:27,690 Chris Brycki: that central banks won't raise interest rates. And really asset 52 00:02:27,690 --> 00:02:31,440 Chris Brycki: prices more than anything are driven by the alternative option, 53 00:02:31,440 --> 00:02:33,180 Chris Brycki: which is just leaving your money in the bank or 54 00:02:33,180 --> 00:02:36,419 Chris Brycki: in cash or in safe options. So the higher interest 55 00:02:36,419 --> 00:02:39,419 Chris Brycki: rates are, the worst shares look as an investment. So 56 00:02:39,419 --> 00:02:43,020 Chris Brycki: people really hope that markets don't keep on roaring ahead 57 00:02:43,020 --> 00:02:45,210 Chris Brycki: or the economy doesn't keep on roaring ahead because that's 58 00:02:45,360 --> 00:02:46,769 Chris Brycki: actually better for investors. 59 00:02:46,919 --> 00:02:49,350 Sean Aylmer: Actually yesterday I think we got those retail sales figures 60 00:02:49,350 --> 00:02:52,799 Sean Aylmer: out for December, they were down 3. 9%. They'd fell 61 00:02:53,130 --> 00:02:55,860 Sean Aylmer: hugely compared to what people thought and the share market 62 00:02:55,860 --> 00:02:58,530 Sean Aylmer: actually jumped on the back of exactly what you are 63 00:02:58,530 --> 00:02:59,220 Sean Aylmer: talking about. 64 00:02:59,550 --> 00:03:02,639 Chris Brycki: Yeah, it's this weird phenomenon where sometimes people are actually 65 00:03:02,639 --> 00:03:06,179 Chris Brycki: cheering for bad news. And particularly because the big market 66 00:03:06,180 --> 00:03:09,929 Chris Brycki: falls last year were largely driven by those inflationary impacts 67 00:03:09,930 --> 00:03:12,210 Chris Brycki: we've been seeing. And then the need for central banks 68 00:03:12,210 --> 00:03:15,300 Chris Brycki: to raise interest rates, anything that's going to give people 69 00:03:15,300 --> 00:03:17,940 Chris Brycki: more confidence that those rates are going to plateau. And 70 00:03:18,210 --> 00:03:19,889 Chris Brycki: that's what you've also seen since the start of the 71 00:03:19,889 --> 00:03:22,649 Chris Brycki: year is the bond markets have done very well. Bonds 72 00:03:22,650 --> 00:03:25,050 Chris Brycki: in Australia are up about 3% since the start of 73 00:03:25,050 --> 00:03:28,320 Chris Brycki: the year on bets that actually the RBA will continue 74 00:03:28,320 --> 00:03:31,800 Chris Brycki: to slow rate increases. Now that's still very much up 75 00:03:31,800 --> 00:03:34,350 Chris Brycki: in the air. I saw Deutsche Bank yesterday actually put 76 00:03:34,350 --> 00:03:36,960 Chris Brycki: out a prediction that there's still another 1% to go, 77 00:03:37,140 --> 00:03:40,350 Chris Brycki: from 3. 1 to 4.1, so that's higher than a 78 00:03:40,350 --> 00:03:42,930 Chris Brycki: lot of the other economic forecasters are predicting. 79 00:03:43,140 --> 00:03:46,080 Sean Aylmer: Yeah. So just explain that to retail investors in terms 80 00:03:46,080 --> 00:03:48,600 Sean Aylmer: of bonds. The whole idea is if the reserve bank 81 00:03:48,600 --> 00:03:52,800 Sean Aylmer: keeps pushing interest rates up, that's not good for bonds 82 00:03:52,920 --> 00:03:55,350 Sean Aylmer: or to purchase bonds today, if rates in the future 83 00:03:55,350 --> 00:03:56,130 Sean Aylmer: are going to be higher. 84 00:03:56,370 --> 00:03:59,820 Chris Brycki: Correct. If you own a bond, then you are basically, 85 00:03:59,820 --> 00:04:01,800 Chris Brycki: and if it's a fixed rate bond, you've locked in 86 00:04:01,800 --> 00:04:03,930 Chris Brycki: the interest that you're receiving on that. So the more 87 00:04:03,930 --> 00:04:06,630 Chris Brycki: that interest rates in the open market go up, the 88 00:04:06,630 --> 00:04:08,520 Chris Brycki: worse your bonds are going to perform because on a 89 00:04:08,520 --> 00:04:11,550 Chris Brycki: relative basis the interest doesn't look very good. So you 90 00:04:11,550 --> 00:04:14,160 Chris Brycki: actually want interest rates to fall if you own bonds. 91 00:04:14,430 --> 00:04:16,979 Chris Brycki: And actually a lot of the share market falls last 92 00:04:16,980 --> 00:04:19,589 Chris Brycki: year I think were driven by big falls in the 93 00:04:19,589 --> 00:04:22,770 Chris Brycki: bond market. So I don't think anyone was anticipating in 94 00:04:22,770 --> 00:04:25,950 Chris Brycki: 2022 how quickly interest rates needed to go up and 95 00:04:25,950 --> 00:04:29,100 Chris Brycki: that caused bonds to get slammed around the world and 96 00:04:29,279 --> 00:04:31,679 Chris Brycki: the prices fell. But what it meant was actually the 97 00:04:31,680 --> 00:04:33,990 Chris Brycki: yield or what you could earn by owning those bonds 98 00:04:33,990 --> 00:04:37,950 Chris Brycki: actually rose quite substantially and suddenly bonds looked a lot 99 00:04:37,950 --> 00:04:41,430 Chris Brycki: more attractive than shares and then that cascades into leading 100 00:04:41,430 --> 00:04:42,270 Chris Brycki: shares to fall. 101 00:04:42,480 --> 00:04:43,770 Sean Aylmer: So I'm going to stick with bonds, we'll come back 102 00:04:43,770 --> 00:04:46,109 Sean Aylmer: to equities and whether it's going to last, but just 103 00:04:46,110 --> 00:04:49,410 Sean Aylmer: sticking with bonds for the moment. So is a bond 104 00:04:49,410 --> 00:04:52,710 Sean Aylmer: or a bond fund or an ETF, a bond ETF, suddenly ... Well, not 105 00:04:52,710 --> 00:04:55,500 Sean Aylmer: suddenly. Is it now more attractive perhaps than it was? 106 00:04:56,310 --> 00:04:59,250 Chris Brycki: It's definitely more attractive. So the yield that you can 107 00:04:59,250 --> 00:05:02,490 Chris Brycki: earn on ... And in our portfolios we have a high 108 00:05:02,490 --> 00:05:05,849 Chris Brycki: quality government and corporate bond ETF that invests in a 109 00:05:05,850 --> 00:05:09,060 Chris Brycki: bunch of different bonds. You can currently earn about 3. 110 00:05:09,390 --> 00:05:11,910 Chris Brycki: 8% per year on that compared to a bit less 111 00:05:11,910 --> 00:05:14,220 Chris Brycki: than that just in the cash rate. And that's a 112 00:05:14,220 --> 00:05:16,320 Chris Brycki: lot better than a few years ago. When interest rates 113 00:05:16,320 --> 00:05:19,229 Chris Brycki: were zero in Australia, you could barely earn anything on 114 00:05:19,230 --> 00:05:22,410 Chris Brycki: a bond. So the rates do look better. The problem 115 00:05:22,410 --> 00:05:25,529 Chris Brycki: is that in most markets, bonds and shares move in 116 00:05:25,529 --> 00:05:28,680 Chris Brycki: opposite directions and so bonds provide a good cushion for 117 00:05:28,680 --> 00:05:31,890 Chris Brycki: your portfolio. We didn't see that last year because we're 118 00:05:31,890 --> 00:05:34,620 Chris Brycki: in more of an ... I would call it an inflationary 119 00:05:34,620 --> 00:05:38,789 Chris Brycki: bear market where bonds are actually driving shares to fall 120 00:05:38,790 --> 00:05:41,489 Chris Brycki: and they're falling together and we haven't seen those two 121 00:05:41,490 --> 00:05:45,000 Chris Brycki: asset classes move in tandem to the same extent that 122 00:05:45,000 --> 00:05:47,100 Chris Brycki: they are at the moment for many decades. 123 00:05:47,520 --> 00:05:49,320 Sean Aylmer: Stay with me Chris, we'll be back in a minute. 124 00:05:55,440 --> 00:05:58,320 Sean Aylmer: My guest this morning is Chris Brycki, CEO of online 125 00:05:58,320 --> 00:06:01,920 Sean Aylmer: investment advisor Stockspot. So let's just jump back to equities. 126 00:06:01,920 --> 00:06:06,540 Sean Aylmer: We talked about what's happened, why it's happened. Can it last? 127 00:06:07,830 --> 00:06:10,020 Chris Brycki: Look, I think there's obviously a lot of hope at 128 00:06:10,020 --> 00:06:11,790 Chris Brycki: the start of the year and that's why everyone's been 129 00:06:11,820 --> 00:06:16,349 Chris Brycki: jumping back into shares. I'm not entirely solved that it's 130 00:06:16,350 --> 00:06:18,210 Chris Brycki: going to last and we're going to continue to see 131 00:06:18,210 --> 00:06:20,670 Chris Brycki: them move up in a straight line this year. And 132 00:06:20,850 --> 00:06:23,370 Chris Brycki: I mean, I remember back in my early trading days 133 00:06:23,370 --> 00:06:26,820 Chris Brycki: in the early 2000s, the original tech wreck and how 134 00:06:26,820 --> 00:06:31,410 Chris Brycki: hard it was to predict markets in 2001 and 2002. Because in 135 00:06:31,410 --> 00:06:34,440 Chris Brycki: those two years there were three different rallies where the 136 00:06:34,440 --> 00:06:37,260 Chris Brycki: US share market went up by 20% and a lot 137 00:06:37,260 --> 00:06:39,270 Chris Brycki: of people suddenly got a lot of hope back. And 138 00:06:39,270 --> 00:06:41,970 Chris Brycki: then those big rallies were quickly reversed and the market 139 00:06:41,970 --> 00:06:45,240 Chris Brycki: made new lows. And so I think I would caution 140 00:06:45,240 --> 00:06:48,450 Chris Brycki: people around getting too excited and suddenly deploying all of 141 00:06:48,450 --> 00:06:51,029 Chris Brycki: their capital all at once. I mean, I'd certainly recommend 142 00:06:51,029 --> 00:06:54,120 Chris Brycki: dollar cost averaging over a period. There's a few warning 143 00:06:54,120 --> 00:06:56,700 Chris Brycki: signs that make me a little bit less excited about 144 00:06:56,700 --> 00:06:59,160 Chris Brycki: markets at the moment. One is that if you have 145 00:06:59,160 --> 00:07:00,960 Chris Brycki: a look at what's gone up the most this year, 146 00:07:00,960 --> 00:07:03,210 Chris Brycki: it's been a lot of the, I would say, higher 147 00:07:03,210 --> 00:07:05,700 Chris Brycki: growth and lower quality shares, the ones that really got 148 00:07:05,700 --> 00:07:09,810 Chris Brycki: pummeled last year, like technology. Now historically when you enter 149 00:07:09,810 --> 00:07:13,050 Chris Brycki: a new bull market, it's not the same sector that 150 00:07:13,050 --> 00:07:15,570 Chris Brycki: led the bear market down that leads the market out 151 00:07:15,570 --> 00:07:18,480 Chris Brycki: of that bear market. And so it's unusual to see 152 00:07:18,750 --> 00:07:21,150 Chris Brycki: technology, which has been the worst sector in this bear 153 00:07:21,150 --> 00:07:24,270 Chris Brycki: market, be the one to lead us out. So having 154 00:07:24,270 --> 00:07:26,310 Chris Brycki: a look at which sectors lead the market up is 155 00:07:26,310 --> 00:07:28,680 Chris Brycki: an interesting signal. At the moment it's not giving me 156 00:07:28,680 --> 00:07:31,470 Chris Brycki: a lot of confidence that we'll see this rally continue. 157 00:07:31,770 --> 00:07:34,560 Chris Brycki: The other one is that I think people's tempered expectation 158 00:07:34,560 --> 00:07:37,890 Chris Brycki: around interest rate rises may be a bit premature and 159 00:07:37,890 --> 00:07:41,550 Chris Brycki: actually central banks, now that markets are rallied, are probably 160 00:07:41,550 --> 00:07:44,760 Chris Brycki: more likely to raise interest rates rather than less likely. 161 00:07:45,060 --> 00:07:48,150 Chris Brycki: And that I think is underpinned by the history that 162 00:07:48,180 --> 00:07:53,580 Chris Brycki: actually central banks, once inflation rises above 5% in an economy, 163 00:07:53,910 --> 00:07:56,760 Chris Brycki: every single time that's happened in history, central banks have 164 00:07:56,760 --> 00:08:00,270 Chris Brycki: needed to raise interest rates above the inflation rate to 165 00:08:00,270 --> 00:08:02,880 Chris Brycki: get it under control. And in Australia at the moment, 166 00:08:02,880 --> 00:08:06,000 Chris Brycki: we know the inflation rate's just under 8%, it's 7. 167 00:08:06,300 --> 00:08:10,200 Chris Brycki: 8%. But our interest rates are only 3.1%. So there's 168 00:08:10,200 --> 00:08:13,050 Chris Brycki: a big gap between those numbers and I think that 169 00:08:13,110 --> 00:08:16,020 Chris Brycki: people probably aren't anticipating that needs to close, but I 170 00:08:16,020 --> 00:08:17,550 Chris Brycki: think it probably does need to. 171 00:08:18,300 --> 00:08:23,400 Sean Aylmer: Okay. How does Australia, the local market, compare to overseas 172 00:08:23,400 --> 00:08:25,140 Sean Aylmer: markets? And I suppose I'm going to clump those into 173 00:08:25,140 --> 00:08:29,190 Sean Aylmer: two groups. Developed markets, so Wall Street, Europe, UK, and 174 00:08:29,190 --> 00:08:33,600 Sean Aylmer: then emerging markets, Korea, China, Mexico, Brazil, those sorts of markets. 175 00:08:34,110 --> 00:08:37,199 Chris Brycki: So our market, funnily enough, fits almost between the two. 176 00:08:37,200 --> 00:08:39,960 Chris Brycki: And I would explain it like this. In the last 177 00:08:39,960 --> 00:08:42,570 Chris Brycki: year, our market in Australia did much better than the 178 00:08:42,600 --> 00:08:46,230 Chris Brycki: US and many European markets. And that's mainly because of 179 00:08:46,230 --> 00:08:49,470 Chris Brycki: the sectors that are much larger in our market. So in the 180 00:08:49,470 --> 00:08:52,140 Chris Brycki: Aussie share market, banks and resources make up a big 181 00:08:52,140 --> 00:08:55,349 Chris Brycki: proportion of the overall market and they were two sectors 182 00:08:55,350 --> 00:08:59,340 Chris Brycki: that actually benefited from higher commodity prices, which came from 183 00:08:59,340 --> 00:09:03,240 Chris Brycki: that higher inflation and also higher interest rates because banks 184 00:09:03,240 --> 00:09:06,060 Chris Brycki: can earn better margins when interest rates are higher. So 185 00:09:06,270 --> 00:09:09,960 Chris Brycki: actually last year banks and resources really supported our market. And 186 00:09:10,440 --> 00:09:12,569 Chris Brycki: the reason our market fell by a lot less than 187 00:09:12,570 --> 00:09:15,870 Chris Brycki: other markets, like the US and Europe, were technology and 188 00:09:15,870 --> 00:09:19,410 Chris Brycki: healthcare and some of these high growth sectors were punished 189 00:09:19,410 --> 00:09:22,260 Chris Brycki: by the higher interest rates. So compared to the US 190 00:09:22,260 --> 00:09:24,540 Chris Brycki: and Europe, we did well. And if you believe that 191 00:09:24,540 --> 00:09:27,000 Chris Brycki: interest rates are going to continue to stay high and 192 00:09:27,000 --> 00:09:30,359 Chris Brycki: inflation high, you would expect our market to continue to 193 00:09:30,360 --> 00:09:34,589 Chris Brycki: relatively do better than those markets. And that did happen. 194 00:09:34,830 --> 00:09:40,319 Chris Brycki: From around 2001 to 2010, our market outperformed the US 195 00:09:40,320 --> 00:09:43,080 Chris Brycki: market so we could be in for a similar period 196 00:09:43,080 --> 00:09:47,579 Chris Brycki: to that. Compared to emerging markets, emerging markets tend to 197 00:09:47,580 --> 00:09:50,520 Chris Brycki: do even better than our market when there's higher inflation 198 00:09:50,790 --> 00:09:54,690 Chris Brycki: because they're usually even more exposed to commodity markets than 199 00:09:54,690 --> 00:09:58,559 Chris Brycki: we are. And yeah, historically that's been the group of 200 00:09:58,559 --> 00:09:59,850 Chris Brycki: markets that's done the best. 201 00:10:00,360 --> 00:10:02,130 Sean Aylmer: I just want to take you back to something. You 202 00:10:02,130 --> 00:10:05,069 Sean Aylmer: mentioned dollar cost averaging. Just explain what that is. Because 203 00:10:05,070 --> 00:10:07,710 Sean Aylmer: I think it's one of the most important parts of investing. 204 00:10:08,490 --> 00:10:09,660 Chris Brycki: Well, I think for a lot of people it can 205 00:10:09,660 --> 00:10:12,360 Chris Brycki: be very tempting when you think the market's bottomed, or 206 00:10:12,360 --> 00:10:14,070 Chris Brycki: when you think it's going to go up further, to 207 00:10:14,070 --> 00:10:15,809 Chris Brycki: put all of your money to work in the market 208 00:10:15,809 --> 00:10:19,800 Chris Brycki: straight away. And if you're right, that's fantastic, you've done 209 00:10:19,800 --> 00:10:21,660 Chris Brycki: well. But in a lot of cases you can feel 210 00:10:21,660 --> 00:10:23,670 Chris Brycki: a lot of regret if you're too early and the 211 00:10:23,670 --> 00:10:26,850 Chris Brycki: market keeps on falling. So a strategy we recommend to 212 00:10:26,850 --> 00:10:29,309 Chris Brycki: all of our Stockspot clients when they're starting to invest, 213 00:10:29,309 --> 00:10:32,069 Chris Brycki: and particularly if they're a bit nervous about markets, is 214 00:10:32,070 --> 00:10:34,740 Chris Brycki: not putting all of your money to work immediately, but 215 00:10:34,740 --> 00:10:38,010 Chris Brycki: actually setting up a plan. So you might space out 216 00:10:38,010 --> 00:10:40,949 Chris Brycki: your investing over the next 12 months and divide up 217 00:10:40,950 --> 00:10:44,040 Chris Brycki: that money so every month you're investing a smaller amount 218 00:10:44,370 --> 00:10:46,470 Chris Brycki: and it allows you to capture any dips that happen 219 00:10:46,470 --> 00:10:48,870 Chris Brycki: along the way. So if the market falls, you feel 220 00:10:48,870 --> 00:10:50,580 Chris Brycki: a bit of relief that you've been able to buy 221 00:10:50,580 --> 00:10:53,010 Chris Brycki: at those lower prices. And if markets go up, at 222 00:10:53,010 --> 00:10:55,350 Chris Brycki: least you feel happy that you bought some before the 223 00:10:55,350 --> 00:10:58,290 Chris Brycki: market went up. So for me, dollar cost averaging is 224 00:10:58,290 --> 00:11:01,230 Chris Brycki: about reducing the amount of regret you feel in the future. 225 00:11:01,620 --> 00:11:06,179 Sean Aylmer: Okay, one final question. Cash on hand, just judging from 226 00:11:06,179 --> 00:11:08,520 Sean Aylmer: what you said a moment ago, not a hundred percent 227 00:11:08,520 --> 00:11:10,079 Sean Aylmer: sure ... I mean, you're never going to be a hundred 228 00:11:10,080 --> 00:11:13,050 Sean Aylmer: percent sure, but you just ... There are signs that this 229 00:11:13,380 --> 00:11:17,219 Sean Aylmer: equity rally may not last. Having money on hand, good 230 00:11:17,220 --> 00:11:19,890 Sean Aylmer: idea is it to take advantage of those opportunities, or 231 00:11:19,890 --> 00:11:21,120 Sean Aylmer: should you be fully invested? 232 00:11:21,960 --> 00:11:24,960 Chris Brycki: Well, the strategy we recommend to clients is, for everyone, 233 00:11:24,960 --> 00:11:27,210 Chris Brycki: you should be always having some cash set aside for 234 00:11:27,210 --> 00:11:29,670 Chris Brycki: short term expenses and as a bit of an emergency 235 00:11:29,670 --> 00:11:31,410 Chris Brycki: fund because you don't want to be dipping into your 236 00:11:31,410 --> 00:11:33,900 Chris Brycki: investments if you lose your job and you need a 237 00:11:33,900 --> 00:11:35,970 Chris Brycki: bit of extra cash to support the family or if 238 00:11:35,970 --> 00:11:37,559 Chris Brycki: you want to go on a holiday or something like 239 00:11:37,559 --> 00:11:40,530 Chris Brycki: that. So typically I would suggest three to six months 240 00:11:40,530 --> 00:11:43,440 Chris Brycki: worth of expenses you should be keeping in cash or 241 00:11:43,470 --> 00:11:46,860 Chris Brycki: in something that's easily accessible. Potentially at the moment that 242 00:11:46,860 --> 00:11:49,470 Chris Brycki: could be a little bit more. Because the economy is 243 00:11:49,470 --> 00:11:52,710 Chris Brycki: pretty volatile, we don't know what the employment situation will 244 00:11:52,710 --> 00:11:55,199 Chris Brycki: look like in a year or two and inflation's quite 245 00:11:55,200 --> 00:11:58,020 Chris Brycki: high. It might justify having a little bit more. So 246 00:11:58,020 --> 00:11:59,760 Chris Brycki: you've got a bit of a war chest ready to 247 00:11:59,760 --> 00:12:02,790 Chris Brycki: deploy if things get really bad because there'll be a 248 00:12:02,790 --> 00:12:05,369 Chris Brycki: time in every cycle where a lot of people are 249 00:12:05,370 --> 00:12:07,020 Chris Brycki: panicking and if you are the person that has a 250 00:12:07,020 --> 00:12:09,450 Chris Brycki: bit of cash set aside and that is able to 251 00:12:09,450 --> 00:12:12,150 Chris Brycki: actually deploy that, you could really set yourself and your 252 00:12:12,150 --> 00:12:14,580 Chris Brycki: family up well for the future because you've been able 253 00:12:14,580 --> 00:12:15,839 Chris Brycki: to buy at great prices. 254 00:12:16,140 --> 00:12:17,970 Sean Aylmer: Chris, thank you for talking to Fear and Greed. 255 00:12:18,210 --> 00:12:19,679 Chris Brycki: My pleasure. Thanks for having me back. 256 00:12:20,160 --> 00:12:23,820 Sean Aylmer: That was Chris Brycki, CEO of online investment advisor Stockspot. 257 00:12:24,030 --> 00:12:26,250 Sean Aylmer: This is the Fear and Greed daily interview. Remember, this 258 00:12:26,250 --> 00:12:29,010 Sean Aylmer: is general information only and doesn't take into account your 259 00:12:29,010 --> 00:12:33,089 Sean Aylmer: personal circumstances. You should seek professional advice before making investment 260 00:12:33,090 --> 00:12:35,610 Sean Aylmer: decisions. Join us every morning for the full episode of 261 00:12:35,610 --> 00:12:38,700 Sean Aylmer: Fear and Greed, Australia's most popular business podcast. I'm Sean 262 00:12:38,790 --> 00:12:39,990 Sean Aylmer: Aylmer. Enjoy your day.