1 00:00:05,840 --> 00:00:08,680 Speaker 1: Welcome to the Fear and Greed Business Interview. I'm Sean Aylmer. 2 00:00:08,920 --> 00:00:14,240 Speaker 1: Despite all market volatility, inflation pressures and economic uncertainty, Australian 3 00:00:14,240 --> 00:00:18,400 Speaker 1: investors are showing remarkable resilience. A new survey from HSBC 4 00:00:18,920 --> 00:00:21,440 Speaker 1: has found that the majority of investors are keeping calm 5 00:00:21,840 --> 00:00:25,200 Speaker 1: and sticking to their long term strategies even as markets 6 00:00:25,200 --> 00:00:28,440 Speaker 1: head up every year. We speak to Donahue DESUSA, head 7 00:00:28,440 --> 00:00:32,800 Speaker 1: of Investments at HSBC, about the Investor Insights Survey and 8 00:00:32,840 --> 00:00:36,080 Speaker 1: what it means for investors as they deal with unpredictable markets. 9 00:00:36,120 --> 00:00:38,880 Speaker 1: Remember this is general information only. You should always seek 10 00:00:38,880 --> 00:00:42,879 Speaker 1: professional advice before making investment decisions. Don is Head of 11 00:00:42,920 --> 00:00:45,720 Speaker 1: Investments at HSBC. He joins me in the studio. Welcome 12 00:00:45,720 --> 00:00:46,560 Speaker 1: back to Fear and Greed. 13 00:00:47,120 --> 00:00:48,680 Speaker 2: Thanks very much Sean for having me. 14 00:00:49,000 --> 00:00:51,880 Speaker 1: That's quite exciting that people are actually quite sensible about 15 00:00:51,920 --> 00:00:53,000 Speaker 1: what's going on at the moment. 16 00:00:53,520 --> 00:00:58,480 Speaker 2: Yeah, it was certainly surprising and very encouraging to see 17 00:00:58,880 --> 00:01:02,480 Speaker 2: against a backdrop of cost of living pressures. But we 18 00:01:02,520 --> 00:01:06,080 Speaker 2: did have buoyant markets and that seemed to, I guess, 19 00:01:06,120 --> 00:01:10,840 Speaker 2: boost investor confidence on the back of seeing those stellar 20 00:01:10,880 --> 00:01:13,280 Speaker 2: returns that we did see in twenty twenty four, not 21 00:01:13,480 --> 00:01:16,399 Speaker 2: just in Australia. Of course, there were better returns in 22 00:01:16,440 --> 00:01:19,400 Speaker 2: the overseas markets and the results showed that. 23 00:01:19,920 --> 00:01:22,800 Speaker 1: Okay, so what were the key insights from this year's survey. 24 00:01:23,319 --> 00:01:28,240 Speaker 2: So the key insights we teased out that sixty four 25 00:01:28,680 --> 00:01:32,200 Speaker 2: percent of investors were more likely of the one thousand 26 00:01:32,280 --> 00:01:37,440 Speaker 2: respondents to diversify their portfolio over the next six months. Now, 27 00:01:38,040 --> 00:01:40,000 Speaker 2: this time last year when we took that, that was 28 00:01:40,040 --> 00:01:44,600 Speaker 2: like around the fifty percent mark. More importantly, we're seeing 29 00:01:44,640 --> 00:01:47,400 Speaker 2: this year more than ever, that fifty percent of the 30 00:01:47,480 --> 00:01:52,400 Speaker 2: respondents had recurring investments or were averaging down and investing 31 00:01:52,520 --> 00:01:55,520 Speaker 2: regularly over a period of time rather than trying to 32 00:01:55,600 --> 00:01:57,440 Speaker 2: time or pick the market. 33 00:01:57,680 --> 00:01:59,400 Speaker 1: So just so I'm going to Donald, going to ask 34 00:01:59,440 --> 00:02:01,760 Speaker 1: you to explain that you're talking about averaging down. The 35 00:02:01,800 --> 00:02:04,440 Speaker 1: whole idea is, rather than putting all your money in, 36 00:02:04,480 --> 00:02:06,480 Speaker 1: putting your thousand dollars in now, you might actually do 37 00:02:06,520 --> 00:02:09,040 Speaker 1: ten lots of one hundred dollars over time to sort 38 00:02:09,040 --> 00:02:11,280 Speaker 1: of sometimes you win, sometimes you lose, but you're spreading 39 00:02:11,280 --> 00:02:11,639 Speaker 1: your risk. 40 00:02:12,080 --> 00:02:14,359 Speaker 2: Yeah, absolutely right, And I think and I think that 41 00:02:14,600 --> 00:02:18,880 Speaker 2: that is a learned behavior that investors have accepted some 42 00:02:19,040 --> 00:02:23,320 Speaker 2: period of volatility rather than shying away and staying out 43 00:02:23,320 --> 00:02:27,919 Speaker 2: of the market. Is to that discipline that they've developed 44 00:02:27,960 --> 00:02:31,280 Speaker 2: over time of contributing regularly over a period of time. 45 00:02:31,639 --> 00:02:35,320 Speaker 2: Some call it dollar cost averaging, others just call it regular, 46 00:02:35,600 --> 00:02:39,200 Speaker 2: regular or recurring investment plans to increase every turn, of course, 47 00:02:39,680 --> 00:02:44,160 Speaker 2: and those who've invested over that period of time, particularly 48 00:02:44,160 --> 00:02:46,639 Speaker 2: in the dips, have probably had some really good returns 49 00:02:46,840 --> 00:02:48,600 Speaker 2: from that initial investment. 50 00:02:48,840 --> 00:02:50,360 Speaker 1: Okay, when was the survey taken? 51 00:02:50,960 --> 00:02:53,360 Speaker 2: So the survey was taken at the very start of 52 00:02:53,400 --> 00:02:57,639 Speaker 2: this year and effectively covers the period from October twenty 53 00:02:57,680 --> 00:03:01,000 Speaker 2: twenty four through to the start of March twenty five. 54 00:03:01,280 --> 00:03:03,239 Speaker 1: Okay, so I mean you've got some of the Trump 55 00:03:03,280 --> 00:03:07,960 Speaker 1: era in there. The point is, it's kind of encouraging 56 00:03:08,080 --> 00:03:12,639 Speaker 1: that people are behaving this way, particularly when you get 57 00:03:12,680 --> 00:03:15,600 Speaker 1: the sort of shock that we've had from tariffs, because 58 00:03:15,600 --> 00:03:18,160 Speaker 1: it actually means people are following a plan, and so 59 00:03:18,200 --> 00:03:20,920 Speaker 1: long as they don't panic, it will be Okay. 60 00:03:21,320 --> 00:03:24,720 Speaker 2: Yeah, we're seeing we're certainly seeing a more disciplined approach, 61 00:03:24,760 --> 00:03:28,080 Speaker 2: and you know, shocks to the market. I think I 62 00:03:28,080 --> 00:03:32,040 Speaker 2: think investors are anticipating those more more often than than not. 63 00:03:32,600 --> 00:03:34,600 Speaker 2: If we if we look at the actual poll, seventy 64 00:03:34,639 --> 00:03:37,760 Speaker 2: percent of the respondents have actually changed their approach in 65 00:03:37,840 --> 00:03:41,920 Speaker 2: the last six months, and forty percent of that seventy 66 00:03:41,960 --> 00:03:45,000 Speaker 2: six had actually adopted a more balanced approach. So you 67 00:03:45,040 --> 00:03:49,280 Speaker 2: could see that obviously on the back of strong international 68 00:03:49,320 --> 00:03:53,120 Speaker 2: market gains where you saw the NASDAC and the S 69 00:03:53,160 --> 00:03:56,720 Speaker 2: and P five hundred, you know, up towards twenty twenty nine, 70 00:03:56,840 --> 00:04:01,160 Speaker 2: twenty five percent, the Magnificent sevens somewhere around the sixty 71 00:04:01,200 --> 00:04:05,200 Speaker 2: percent mark. So it's not surprising that those investors, obviously 72 00:04:05,320 --> 00:04:08,080 Speaker 2: on the back of those gains maybe adopted a more 73 00:04:08,120 --> 00:04:12,400 Speaker 2: conservative approach and were probably well braced for this period 74 00:04:12,400 --> 00:04:13,480 Speaker 2: of volatility, and. 75 00:04:13,440 --> 00:04:14,920 Speaker 1: They were hooding more cash, is that right? 76 00:04:15,320 --> 00:04:19,120 Speaker 2: So they are well, I mean, depending on which investor group, 77 00:04:19,560 --> 00:04:22,479 Speaker 2: it looked like they were still more in equities and 78 00:04:22,560 --> 00:04:25,520 Speaker 2: some of the more fixed interest So it looked like 79 00:04:25,560 --> 00:04:30,400 Speaker 2: that thematic of diversification was definitely taking place. I don't 80 00:04:30,520 --> 00:04:33,680 Speaker 2: think we saw too much rotation. They did maintain their 81 00:04:33,720 --> 00:04:38,080 Speaker 2: exposure to equities, they probably diversified that exposure within those 82 00:04:38,160 --> 00:04:41,719 Speaker 2: equity classes. And what we saw was that you know, 83 00:04:42,240 --> 00:04:46,200 Speaker 2: financials and technology remained the key sectors to invest in, 84 00:04:46,240 --> 00:04:48,680 Speaker 2: obviously on the back of those returns as we saw 85 00:04:48,839 --> 00:04:52,600 Speaker 2: I mentioned earlier on the Nasdaq. Interestingly enough, that survey 86 00:04:52,640 --> 00:04:55,640 Speaker 2: did tease out that looking forward in the next six months, 87 00:04:55,960 --> 00:04:58,440 Speaker 2: financials appear to take a bit of a back seat, 88 00:04:59,000 --> 00:05:04,599 Speaker 2: with investors, unknowingly knowing that the current period of volatility, 89 00:05:04,640 --> 00:05:08,840 Speaker 2: were probably more inclined to invest in growth technology stocks. 90 00:05:09,000 --> 00:05:12,840 Speaker 2: I dare say, though, now that they've probably returned and 91 00:05:12,920 --> 00:05:15,719 Speaker 2: refreshed their view towards the more stable sectors. 92 00:05:16,080 --> 00:05:25,120 Speaker 1: Stay with me, Don, we'll be back in a minute. 93 00:05:25,600 --> 00:05:29,960 Speaker 1: I'm speaking to Donahue Desusa from HSBC. Now, just before 94 00:05:30,000 --> 00:05:32,120 Speaker 1: we went to the break, you were talking about the 95 00:05:32,160 --> 00:05:36,240 Speaker 1: behavior of these retail investors, a couple of people we've 96 00:05:36,240 --> 00:05:39,480 Speaker 1: spoken too recently. It seems to come through that retail 97 00:05:39,520 --> 00:05:44,360 Speaker 1: investors perhaps don't get the credit that they deserve, because 98 00:05:44,680 --> 00:05:48,880 Speaker 1: based on your survey, you have people taking defensive positions 99 00:05:48,880 --> 00:05:51,040 Speaker 1: ahead of what's happened in the last three or four weeks, 100 00:05:51,720 --> 00:05:55,279 Speaker 1: thinking about fixed income kind of understanding Magnificent seven US 101 00:05:55,400 --> 00:05:58,280 Speaker 1: Wall Street. There just seems to be a sense that 102 00:05:58,400 --> 00:06:00,960 Speaker 1: institutional investors now all I'm not sure that's the case. 103 00:06:01,040 --> 00:06:05,839 Speaker 2: Don no, I mean there's The survey also pointed out 104 00:06:05,920 --> 00:06:10,520 Speaker 2: that investors now are turning towards more credible sources of information. 105 00:06:10,960 --> 00:06:14,479 Speaker 2: They're not afraid to go out and seek financial advice 106 00:06:14,520 --> 00:06:17,599 Speaker 2: from a financial advisor. They're also turning to more trusted 107 00:06:17,720 --> 00:06:22,080 Speaker 2: sources of information, be it podcasts like this or the 108 00:06:22,120 --> 00:06:28,080 Speaker 2: financial institutions. So they're turning away from the influences, aren't. 109 00:06:29,160 --> 00:06:31,360 Speaker 2: I didn't. I didn't want to say that, but yeah, 110 00:06:31,360 --> 00:06:34,279 Speaker 2: I mean, look, you know, if you're getting the sources 111 00:06:34,320 --> 00:06:39,920 Speaker 2: of information and they are from credible resources, they're turning 112 00:06:39,960 --> 00:06:44,279 Speaker 2: towards education. They're more inclined to do research. The survey 113 00:06:44,400 --> 00:06:48,000 Speaker 2: show a very low percentage of investors who are not 114 00:06:48,200 --> 00:06:52,120 Speaker 2: monitoring their investments or who are not undertaking further research. 115 00:06:52,200 --> 00:06:55,280 Speaker 2: So all signs point to the fact that they're investing 116 00:06:55,400 --> 00:06:59,880 Speaker 2: in themselves, their own knowledge, and are adopting and embracing. 117 00:06:59,480 --> 00:07:03,040 Speaker 1: Those practic is the notabile generate. There is a notable 118 00:07:03,040 --> 00:07:07,120 Speaker 1: generation difference though, between baby boomers and Gen X versus 119 00:07:07,120 --> 00:07:10,200 Speaker 1: millennials Gen Z. What is that? 120 00:07:11,040 --> 00:07:15,640 Speaker 2: So depending on which part of that segment, Certainly in 121 00:07:15,720 --> 00:07:20,920 Speaker 2: terms of getting started, where we're starting to see probably 122 00:07:20,960 --> 00:07:24,920 Speaker 2: the millennial and the younger investors think that they need 123 00:07:25,040 --> 00:07:29,480 Speaker 2: a higher initial investment amount, closer to above twenty thousand. 124 00:07:30,880 --> 00:07:33,760 Speaker 2: I probably attribute that to a number of things. One 125 00:07:34,080 --> 00:07:36,280 Speaker 2: the fact that chair markets have done really well and 126 00:07:36,320 --> 00:07:39,600 Speaker 2: there's probably a concept there that they need to outlay 127 00:07:39,720 --> 00:07:43,880 Speaker 2: greater to get their foothold in that initial entry, but 128 00:07:45,000 --> 00:07:50,200 Speaker 2: also potentially because of currency movements, and the fact that 129 00:07:50,240 --> 00:07:53,360 Speaker 2: the survey also show that, you know, a third of 130 00:07:53,360 --> 00:07:58,320 Speaker 2: the respondents have their portfolio heavily invested in offshore, not local. 131 00:07:59,000 --> 00:08:01,120 Speaker 2: And if we break that down from that third that's 132 00:08:01,160 --> 00:08:04,800 Speaker 2: invested off shore, approximately forty five but just under fifty 133 00:08:04,840 --> 00:08:10,680 Speaker 2: percent is North America. So again there's there's probably that 134 00:08:10,960 --> 00:08:14,040 Speaker 2: gap there that they think that they need a larger 135 00:08:14,040 --> 00:08:17,960 Speaker 2: initial sum to get access to the to the US markets. 136 00:08:18,400 --> 00:08:20,880 Speaker 1: And when I was twenty five or thirty thinking about 137 00:08:20,880 --> 00:08:22,920 Speaker 1: this for the first time, it was really difficult to 138 00:08:22,960 --> 00:08:26,360 Speaker 1: access the US markets, whereas now my kids they're interested 139 00:08:26,400 --> 00:08:28,880 Speaker 1: in buying Tesla shares and they can. Yeah. 140 00:08:28,920 --> 00:08:34,200 Speaker 2: Absolutely, So it's it's just a credit to the industry 141 00:08:34,240 --> 00:08:37,320 Speaker 2: of how far the providers have come in terms of 142 00:08:37,360 --> 00:08:41,760 Speaker 2: providing credible sources of information, the education but also listening 143 00:08:41,800 --> 00:08:44,400 Speaker 2: to consumer demand and the way in which they interact 144 00:08:44,400 --> 00:08:47,840 Speaker 2: with technology and their own finances. You don't need a 145 00:08:47,840 --> 00:08:50,640 Speaker 2: lot of money. Now there's there's you know, platforms where 146 00:08:50,640 --> 00:08:53,520 Speaker 2: you can get access to fractional investing, so you can 147 00:08:53,520 --> 00:08:55,719 Speaker 2: buy a fifth of a Tesla share and when it 148 00:08:55,840 --> 00:08:58,920 Speaker 2: cost you all that much, recurring investment plans so you 149 00:08:58,920 --> 00:09:02,440 Speaker 2: can contribute, you know, like the old regular savings fans 150 00:09:02,640 --> 00:09:06,040 Speaker 2: and contribute that over a period of time, having their 151 00:09:06,080 --> 00:09:10,400 Speaker 2: dividends or any distributions reinvested into capital growth. 152 00:09:10,800 --> 00:09:14,160 Speaker 1: So the HSBC survey has been going for a few years. 153 00:09:14,200 --> 00:09:17,760 Speaker 1: Now what are the key takeouts from this year that 154 00:09:17,800 --> 00:09:20,000 Speaker 1: you find encouraging particularly. 155 00:09:20,160 --> 00:09:24,439 Speaker 2: So we're in our fourth iteration of this survey. Every 156 00:09:25,320 --> 00:09:30,000 Speaker 2: I guess aspect has shown positive results. As I said, 157 00:09:30,679 --> 00:09:35,000 Speaker 2: investors are monitoring, they're heavily engaged with their portfolios. About 158 00:09:35,000 --> 00:09:38,240 Speaker 2: seventy six percent of respondents said that they were monitoring 159 00:09:38,320 --> 00:09:41,720 Speaker 2: their portfolios at least on a monthly basis. The survey 160 00:09:41,800 --> 00:09:45,400 Speaker 2: also showed that sixty four percent of investors are likely 161 00:09:45,440 --> 00:09:49,440 Speaker 2: to further diversify their portfolio. That's up from fifty percent 162 00:09:50,240 --> 00:09:54,319 Speaker 2: last year, and more than half of the respondents are 163 00:09:54,520 --> 00:09:58,240 Speaker 2: continuing to invest regularly, either dollar cost averaging or they 164 00:09:58,280 --> 00:10:02,520 Speaker 2: have recurring investment plans, and in the lead up to 165 00:10:02,559 --> 00:10:06,600 Speaker 2: this period of volatility, seventy percent had already adopted a 166 00:10:06,640 --> 00:10:10,120 Speaker 2: more conservative approach, with forty percent of them adopting a 167 00:10:10,120 --> 00:10:13,440 Speaker 2: more balanced approach rather than a growth or a high growth. 168 00:10:13,600 --> 00:10:16,559 Speaker 1: Very promising. Before we go, anything that you're concerned about 169 00:10:16,559 --> 00:10:20,920 Speaker 1: from the survey that you would like to see change, no, 170 00:10:21,040 --> 00:10:21,720 Speaker 1: I think. 171 00:10:22,080 --> 00:10:25,520 Speaker 2: I think investors obviously, if they stick to the current 172 00:10:25,559 --> 00:10:28,800 Speaker 2: practices of what the survey teased out, we'll certainly see 173 00:10:28,840 --> 00:10:31,600 Speaker 2: themselves get through this period of volatility. I don't think 174 00:10:31,600 --> 00:10:34,160 Speaker 2: that there's going to be too much panic that is 175 00:10:34,200 --> 00:10:36,200 Speaker 2: going to sit in the dusty is going to settle 176 00:10:36,240 --> 00:10:38,480 Speaker 2: at the end of the day. They if they following 177 00:10:38,520 --> 00:10:42,600 Speaker 2: their discipline to again recheck what their financial goals and 178 00:10:42,640 --> 00:10:46,160 Speaker 2: objectives are, make sure that they are on track, diversify 179 00:10:46,280 --> 00:10:49,600 Speaker 2: further if required, seek professional help if they if they 180 00:10:49,640 --> 00:10:54,800 Speaker 2: do need advice, and potentially rebalance and shift away from 181 00:10:54,920 --> 00:10:56,439 Speaker 2: maybe the more volatile sectors. 182 00:10:56,600 --> 00:10:58,120 Speaker 1: Don thank you for talking to Fear and Greed. 183 00:10:58,320 --> 00:10:59,080 Speaker 2: Thanks very much. 184 00:10:59,240 --> 00:11:01,400 Speaker 1: That has done a huge sous a head of Investments 185 00:11:01,400 --> 00:11:04,280 Speaker 1: at HSBC, this is the Fear and Greed Business Interview. 186 00:11:04,320 --> 00:11:07,320 Speaker 1: Remember this is general information only. You should seek professional 187 00:11:07,320 --> 00:11:10,440 Speaker 1: advice before making investment decisions. Join us every morning for 188 00:11:10,480 --> 00:11:13,200 Speaker 1: the full episode of Fear and Greed, daily business news 189 00:11:13,240 --> 00:11:15,800 Speaker 1: for people who make their own decisions. I'm Seane Elmer. 190 00:11:16,200 --> 00:11:16,800 Speaker 1: Enjoy your day.