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Speaker 1: Navigating market corrections with a long term game plan for

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Speaker 1: your financial goals and dreams. Welcome back to Sugar Mamma's fireplay.

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Speaker 1: I am Financial Planner, Canna Campbell, and today we're diving

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Speaker 1: into a topic that's been on the minds of many

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Speaker 1: investors lately, that is market corrections and the importance of

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Speaker 1: sticking to a long term game plan. With rising fears

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Speaker 1: of recession, falling share markets and commodity prices, is easy

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Speaker 1: to feel unsettled right now. However, as an investor just

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Speaker 1: like you, it is crucial that you stay calm, rational

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Speaker 1: and focus on the bigger picture, which is of course

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Speaker 1: building long term, growing passive income streams for that financial

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Speaker 1: independence and to be able to retire early. In fact,

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Speaker 1: let's be honest, market corrections actually present opportunities, sometimes once

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Speaker 1: in lifetime opportunities. So together, let's explore what is happening

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Speaker 1: in the economy right now and how you and I

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Speaker 1: can together navigate these uncertain times with confidence, information, and

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Speaker 1: of course always backed by fact, figures and recent insights.

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Speaker 1: Welcome back to Sugar Mamma's fireplay. I am Financial Planner,

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Speaker 1: Canna Campbell, and today we're diving into a topic that

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Speaker 1: has been on the minds of many investors lately, that

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Speaker 1: is market corrections and the importance of sticking to a

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Speaker 1: long term game plan. With rising fears of recession, falling

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Speaker 1: share markets, and commodity prices, it is very easy to

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Speaker 1: feel unsettled right now. However, as an investor just like you,

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Speaker 1: it is absolutely crucial that we stay calm, rational and

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Speaker 1: focused on the bigger picture that is building up our

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Speaker 1: long term growing passive income streams, which will in turn

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Speaker 1: give us that financial independence and an early retirement. And

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Speaker 1: let's be honest, market corrections quite often present opportunities, sometimes

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Speaker 1: once in a lifetime opportunities, so we need to have

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Speaker 1: our eyes wide open here. So right now we're going

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Speaker 1: to explore what is happening in the economy right now

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Speaker 1: and how you and I can both navigate these uncertain

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Speaker 1: times with confidence, of course, always supported by facts and

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Speaker 1: figures from recent economic insights. Now, as always, all of

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Speaker 1: my content is general in nature and educationally based. It

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Speaker 1: is never personal advice, which is why you should always

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Speaker 1: speak to a financial planner and ask them for personal

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Speaker 1: advice when it comes to your investing worth creation and

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Speaker 1: strategic needs. But in the meantime, let's focus on what

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Speaker 1: is happening in our economy right now, so we are

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Speaker 1: informed and educated, all right, So number one, it is

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Speaker 1: so important that we understand the current economic climate. Recent

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Speaker 1: e share markets have been hit really hard, particularly in

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Speaker 1: the US where we've seen a significant drop of around

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Speaker 1: about eight point five percent from record highs. Global shares

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Speaker 1: are also down by about eight point nine percent, and

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Speaker 1: as you probably know, the Australian market has taken a

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Speaker 1: five point seven percent for bond yields, Commodity prices and

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Speaker 1: even the Australian dollar have dipped reflecting concerns over economic growth.

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Speaker 1: And this is felt worldwide. Now why is this happening, Well,

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Speaker 1: recession fears are back and they are pretty loud right now.

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Speaker 1: And these are not just speculative opinions. Several key indicators

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Speaker 1: are flashing red, particularly in the US, where the inverted

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Speaker 1: yield curve, which is a classic recession warning, has been

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Speaker 1: signaling trouble since about two thy twenty too. Historically, this

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Speaker 1: particular indicator, that is the inverted yield curve, has predicted

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Speaker 1: every US recession over the last sixty years. So while

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Speaker 1: the US economy has shown resilience until now. Risk of

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Speaker 1: recession remains realistically high, and this uncertainty is naturally driving

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Speaker 1: market volatility with so many investor emotions running high. But

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Speaker 1: hopefully after listening to this episode, your emotions will be

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Speaker 1: calm and rational. All right. So, how does the US

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Speaker 1: market and what is going on around the world with

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Speaker 1: these fears affect Australia so closer to home, Australia has

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Speaker 1: not been immune to what is going on right now.

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Speaker 1: Household debt servicing costs are at record highs, real households

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Speaker 1: spending has slowed yep, we're all tightening our belts, and

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Speaker 1: unemployment is starting to creep up, with it now sitting

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Speaker 1: around about four point one percent from a low of

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Speaker 1: three point five percent. While the risk of a recession

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Speaker 1: here is estimated to be about fifty percent, Australi could

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Speaker 1: follow the US into a downturn, which could affect both

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Speaker 1: our economy and the global demand for our exports. Central banks,

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Speaker 1: including our own RBA, are in a very tricky position.

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Speaker 1: You see, interest rates have been raised aggressively over the

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Speaker 1: last two years to help control inflation, but now there's

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Speaker 1: a risk that they've actually gone too far and if

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Speaker 1: inflation falls below target. We could in fact see some

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Speaker 1: rate cuts which may help the economy, but this is

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Speaker 1: going to be a long term process and I really

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Speaker 1: don't think the RBA are going to have any knee

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Speaker 1: jerk reaction to what is going on in the US.

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Speaker 1: In fact, my biggest worries that the RBA may in

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Speaker 1: fact be too slow to react and make those interest

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Speaker 1: rate cuts a little bit too late. But that's just

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Speaker 1: my personal opinion. As you know, in the meantime, so

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Speaker 1: many households are really suffering with so much financial stress

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Speaker 1: and anxiety. So what do we need to do and

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Speaker 1: what do we need to understand about what is happening

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Speaker 1: right now? Well, there are two things that you need

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Speaker 1: to know and understand to help make sure that you

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Speaker 1: are making smart, intelligent decisions with your money and not

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Speaker 1: necessarily part of the herd mentality. So number one is

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Speaker 1: you've got to understand the importance of sticking to a

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Speaker 1: long term game plan. So, with all this uncertainty, it

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Speaker 1: is completely normal and natural to be feeling anxious right now,

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Speaker 1: but it is important you've got to remember that long

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Speaker 1: term investing is about weathering these storms. Shane Oliver, who's

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Speaker 1: one of my favorite economists to follow points out that

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Speaker 1: market corrections like the ones we're experiencing right now are stressful,

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Speaker 1: but they are also a very natural part of the

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Speaker 1: investment cycle. So please don't think this is abnormal. It

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Speaker 1: is healthy. It is just part and parcel. It is

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Speaker 1: just part of the game that is investing. And you see,

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Speaker 1: for long term investors, hopefully like yourself and of course

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Speaker 1: definitely me, I'm a long term investor, these dips are

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Speaker 1: actually opportunities, blessings in disguise. You see, Historically markets have

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Speaker 1: always bounced back from corrections and even recessions, rewarding those

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Speaker 1: investors who stayed the course, even if it meant just

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Speaker 1: sitting on their hands and doing nothing. It is incredibly

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Speaker 1: difficult to try and time the market, but sticking to

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Speaker 1: a well thought out strategy iteaally backed and created by

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Speaker 1: a financial planner can most definitely help payoff in the

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Speaker 1: long run. So please don't forget and of course let's

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Speaker 1: not forget that superination account so also designed with this

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Speaker 1: long term view in mind. Think about it, have you

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Speaker 1: ever really worried dramatically about your superannuation when there is

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Speaker 1: being a market correctional pullback? You probably haven't even got

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Speaker 1: a looked at your superannuation. So this is a long

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Speaker 1: term investment plan like super, So why are you treating

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Speaker 1: them differently? Think about them in the same category. And

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Speaker 1: in times of market volatility, it is essential that you

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Speaker 1: focus on your broader investment goals, whether it be building

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Speaker 1: up passive income like myself or just focusing on capital growth.

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Speaker 1: The most successful investors are the ones who stay patient

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Speaker 1: and don't react impulsively to these short term swings. As

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Speaker 1: the quote by Warren Buffett goes, the stock market is

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Speaker 1: the device of transferring money from the impatient to the impatient.

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Speaker 1: I want you to be the patient people with me,

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Speaker 1: and don't be afraid. The second important thing that you

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Speaker 1: need to understand about the market right now so that

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Speaker 1: this actually in turn benefits your financial situation and of

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Speaker 1: course your wealth goals. And that is the opportunity that

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Speaker 1: lies in these market corrections. That is the blessing in disguise.

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Speaker 1: Recessions and market corrections often present buying opportunities. So many

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Speaker 1: times when you look at a chart of the market

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Speaker 1: and what it's done over the last twenty thirty forty years,

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Speaker 1: and you look at the wars, the terrorist attacks, the

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Speaker 1: healthcare crisises, they've actually presented incredible opportunities, that is, opportunities

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Speaker 1: to buy the same quality assets at a significant discount

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Speaker 1: and make some wealth even dare I say over the

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Speaker 1: medium term. So for example, when share prices fall, oh

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Speaker 1: do the valuations that are valuations on a surface level.

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Speaker 1: It doesn't mean the value of the company has necessarily fallen.

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Speaker 1: So what this then means is you can sometimes buy

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Speaker 1: these high quality companies at a significant discount. Think about

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Speaker 1: the companies with strong fundamentals and a history of weathering

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Speaker 1: economic downturns, for example, supermarkets during an economic crisis or recession.

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Speaker 1: Do we still go to the supermarket? Do we still

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Speaker 1: bry bread? Do we still buy milk? Yes we do?

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Speaker 1: Do we still put petrol in our cars? Do we

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Speaker 1: still use electricity? Yes? These were the companies that I'm

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Speaker 1: talking about, strong fundamentals that are almost immune to these

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Speaker 1: economic downturns. Of course, they're not going to be perfect

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Speaker 1: at all times, but this is why it's so important

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Speaker 1: that you have a diversified investment portfolio. And as I said,

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Speaker 1: these are the ones that tend to bounce back stronger

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Speaker 1: once the storm has passed. Another thing to consider is

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Speaker 1: of course your dividend strategy. With Australian shares offering relatively

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Speaker 1: high yields in comparison to say international investments and shares,

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Speaker 1: investors still continue to earn income off their share portfolios

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Speaker 1: even if the capital value of their share portfolios has

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Speaker 1: dramatically fluctuated and is down in the short term. So

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Speaker 1: whilst your say supermarket stock is down, say five percent

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Speaker 1: or even ten percent, you're still getting the same amount

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Speaker 1: approximately in dividends each year. So what's the difference really?

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Speaker 1: And it is so important to remember that downturns can

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Speaker 1: help cool off inflation, which we all know is a

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Speaker 1: problem right now, which then means lower costs of living

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Speaker 1: and potential interest rate cuts can now come back on

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Speaker 1: the table to be considered, which then of course help

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Speaker 1: ease the financial pressure on so many households and businesses

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Speaker 1: right now, eventually then in turn boosting the economic activity

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Speaker 1: that we all need. So you can see now the

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Speaker 1: importance of thinking about your long term goals, which is

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Speaker 1: building up your passive income, whether every fifty thousand dollars

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Speaker 1: a year, eighty thousand dollars a year, one hundred thousand

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Speaker 1: dollars or two hundred thousand dollars a year, Focus on

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Speaker 1: what your goals are, turn down the volume, forget about

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Speaker 1: the white noise around you, and if you are feeling resilient,

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Speaker 1: brave and educated enough, look at the blessings in disguise.

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Speaker 1: Are you going to look back at this time right

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Speaker 1: now and think, Gosh, I wish I invested more than

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Speaker 1: or I wish I had stayed and just sat on

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Speaker 1: my hands and let my portfolio do its thing. You

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Speaker 1: want to look at this as an opportunity. Is there

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Speaker 1: spare money potentially you can add to your portfolio or

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Speaker 1: even to your superhotion right now, if that's appropriate. So

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Speaker 1: whilst the economic environment might seem really frightening right now,

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Speaker 1: the best course of action for most investors like us

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Speaker 1: is to stay focused on the long term horizon mark

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Speaker 1: A volatility whilst incredibly unsettling, it's an inherent part of

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Speaker 1: the investing journey. By staying calm and sticking to a

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Speaker 1: well structured getting plan, you will be well positioned to

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Speaker 1: take advantage of all these opportunities that arise around us.

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Speaker 1: And remember, successful investing isn't about avoiding or trying to

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Speaker 1: avoid downturns. Altogether. That's in fact possible. It's about how

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Speaker 1: you respond to them. Keep your eye on the future,

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Speaker 1: trust your strategy, invest time exploring what additional things you

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Speaker 1: can do for your strategy to make the most of

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Speaker 1: loopholes and opportunities, and do not let short term market

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Speaker 1: noise derail your long term financial goals. So today's episode

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Speaker 1: is just a short but sweet one. Thank you so

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Speaker 1: much for tuning in. If you've found this episode helpful,

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Speaker 1: please don't forget to subscribe to Sugar Mama's fireplay and

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Speaker 1: make sure you share your thoughts with me on social media.

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Speaker 1: And in the meantime, I'll see you next Monday morning,

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Speaker 1: where we will continue on exploring how you can take

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Speaker 1: control of your financial future, one smart investment at a time,

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Speaker 1: And never forget, investing is a marathon, not a sprint.

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Speaker 1: If you need to take a break, slow down, walk

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Speaker 1: a little bit, jog a little slower, take a sip

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Speaker 1: of water, stretch your muscles, that is perfectly fine. Just

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Speaker 1: keep going. All about sustainability, endurance, and perseverance. Trust me,

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Speaker 1: it is always worth it. In the meantime, stay informed,

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Speaker 1: stay calm, and most importantly, stay the course. As you

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Speaker 1: keep that financial fire burning