1 00:00:13,000 --> 00:00:15,960 Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. I'm 2 00:00:16,040 --> 00:00:19,360 Speaker 1: James Kirby, Well, the editor at The Australian. Now, folks, 3 00:00:19,400 --> 00:00:23,960 Speaker 1: we've had a few days to digest what it all 4 00:00:24,000 --> 00:00:29,880 Speaker 1: means about Donald Trump arriving rebounding back into the White House. 5 00:00:30,160 --> 00:00:32,479 Speaker 1: But what does it mean for investors? And this is 6 00:00:32,560 --> 00:00:37,159 Speaker 1: actually a very front end center and extremely important development 7 00:00:37,240 --> 00:00:40,200 Speaker 1: for investors. There are aspects to it about our market 8 00:00:40,240 --> 00:00:43,519 Speaker 1: that's going to matter straight away, for instance the big miners. 9 00:00:43,560 --> 00:00:45,680 Speaker 1: That's going to be tougher for them, for instance. But 10 00:00:45,880 --> 00:00:51,120 Speaker 1: more importantly really is that if you don't have global shares, 11 00:00:52,200 --> 00:00:55,760 Speaker 1: you should have and if you're not in you can't win. 12 00:00:56,400 --> 00:00:58,160 Speaker 1: It's as simple as that. Now, if you look at 13 00:00:58,200 --> 00:01:00,920 Speaker 1: our market over the last over the year to date, 14 00:01:01,200 --> 00:01:03,960 Speaker 1: over the last twelve months, we are up something in 15 00:01:04,000 --> 00:01:06,399 Speaker 1: the order of eight percent, Okay, and that sounds fine. 16 00:01:06,480 --> 00:01:09,720 Speaker 1: Here's the thing. The US market's already up twenty four percent, right, 17 00:01:09,880 --> 00:01:12,480 Speaker 1: three times more. You're making three times more money in 18 00:01:12,520 --> 00:01:15,440 Speaker 1: the US and no one knows the future. But does 19 00:01:15,480 --> 00:01:20,360 Speaker 1: every indication that this Trump bump as they called it 20 00:01:20,520 --> 00:01:23,640 Speaker 1: when he was in power the last time, will continue 21 00:01:24,080 --> 00:01:27,240 Speaker 1: this time? I would actually argue the conditions for shares. 22 00:01:27,400 --> 00:01:32,240 Speaker 1: US shares are better now than they were, particularly blue 23 00:01:32,360 --> 00:01:35,640 Speaker 1: chip US shares, not so much the tech leaders and 24 00:01:35,760 --> 00:01:40,399 Speaker 1: smaller and medium cap American shares. And just as the 25 00:01:40,440 --> 00:01:43,600 Speaker 1: week has passed, starting to see the shape of this 26 00:01:43,680 --> 00:01:47,320 Speaker 1: Trump financial administration, which is all the show is interested 27 00:01:47,360 --> 00:01:50,680 Speaker 1: about on this occasion. So we're getting people like Idan 28 00:01:50,800 --> 00:01:52,720 Speaker 1: musk Is going in as to what they called the 29 00:01:52,760 --> 00:01:55,760 Speaker 1: efficiencies are We'll see how that works. I imagine Ian 30 00:01:55,880 --> 00:01:58,080 Speaker 1: mrsk has about five hours a week to give to 31 00:01:58,120 --> 00:02:01,400 Speaker 1: that job. But importantly, probably more importantly, it's a man 32 00:02:01,480 --> 00:02:04,720 Speaker 1: called Scott Bessent, because in its Treasury secretary, that's an 33 00:02:04,720 --> 00:02:09,079 Speaker 1: extremely important job. He's a fund manager, billionaire fund manager. 34 00:02:09,560 --> 00:02:12,880 Speaker 1: So whatever else he is capable of, we'll assume that 35 00:02:12,919 --> 00:02:18,080 Speaker 1: he is a pretty capable investor. And you can see 36 00:02:18,080 --> 00:02:21,480 Speaker 1: straight away that the American share markets continues to rise, 37 00:02:21,520 --> 00:02:24,359 Speaker 1: and so does our market. Now, what I'm really interested 38 00:02:24,400 --> 00:02:30,959 Speaker 1: in is what have Australians actually been buying and investing 39 00:02:31,000 --> 00:02:34,320 Speaker 1: in up until now on the US markets and on 40 00:02:34,639 --> 00:02:36,840 Speaker 1: our own markets as well, where you can easily buy 41 00:02:37,880 --> 00:02:41,400 Speaker 1: ASX listed ETFs that are that are invested in the 42 00:02:41,480 --> 00:02:43,680 Speaker 1: US market, which is a very simple way in actually, 43 00:02:44,240 --> 00:02:47,359 Speaker 1: but also is it changing and how might it change? 44 00:02:47,480 --> 00:02:50,680 Speaker 1: I've got the ideal guests. She's been on the show before. 45 00:02:50,960 --> 00:02:54,600 Speaker 1: It's Jemma Dale, head of investor behavior at Naptrade, that 46 00:02:54,760 --> 00:02:57,440 Speaker 1: is the online broker. How are you, Jemmer, I'm well, thanks, 47 00:02:57,440 --> 00:02:59,480 Speaker 1: How are you good? Good to have you on the 48 00:02:59,480 --> 00:02:59,919 Speaker 1: show again. 49 00:03:00,919 --> 00:03:01,880 Speaker 2: Lovely to be here. 50 00:03:02,080 --> 00:03:06,280 Speaker 1: We have talked in the past about this whole area. 51 00:03:06,440 --> 00:03:08,800 Speaker 1: Before we start, just tell us give us a picture 52 00:03:08,800 --> 00:03:12,480 Speaker 1: of you would of what we might call the traditional 53 00:03:12,600 --> 00:03:16,640 Speaker 1: situation with Australia and the Wall Street share market. I 54 00:03:16,720 --> 00:03:19,760 Speaker 1: gather it was largely younger by that, I mean under 55 00:03:19,800 --> 00:03:23,480 Speaker 1: thirty five that were actively buying individual shares in the US, 56 00:03:23,480 --> 00:03:25,880 Speaker 1: and older investors were a bit slower, but occasionally they'd 57 00:03:25,880 --> 00:03:29,400 Speaker 1: buy ETFs. Is that still the case and what shares 58 00:03:29,440 --> 00:03:30,040 Speaker 1: do they like? 59 00:03:30,880 --> 00:03:31,120 Speaker 2: Yeah? 60 00:03:31,320 --> 00:03:35,880 Speaker 3: Such a good question because the demographic shifts, I think 61 00:03:35,920 --> 00:03:38,560 Speaker 3: how largely due to what was available at the time 62 00:03:38,560 --> 00:03:39,720 Speaker 3: people started investing. 63 00:03:39,880 --> 00:03:40,080 Speaker 2: Yeah. 64 00:03:40,120 --> 00:03:45,320 Speaker 3: Really, it's not that people are lacking in education or 65 00:03:45,360 --> 00:03:47,400 Speaker 3: even appetite for a lot of different things. It just 66 00:03:47,400 --> 00:03:49,640 Speaker 3: depends on what is easy and accessible at the time 67 00:03:49,640 --> 00:03:53,400 Speaker 3: you started. So most of our older investors have fairly 68 00:03:54,440 --> 00:04:00,000 Speaker 3: rich and deep bossy equities portfolios. They started, let's say 69 00:03:59,760 --> 00:04:02,800 Speaker 3: the nineties with the big floats, so they owned CBA 70 00:04:02,920 --> 00:04:04,640 Speaker 3: and they bought it very cheaply and they've done very 71 00:04:04,720 --> 00:04:07,120 Speaker 3: nicely out of that. And they owned BHP, and they 72 00:04:07,120 --> 00:04:10,560 Speaker 3: own the big Australian companies, and they would have bought 73 00:04:10,560 --> 00:04:12,680 Speaker 3: Woolies in the float, all those sorts of things. And 74 00:04:12,800 --> 00:04:15,800 Speaker 3: a lot of our baby boomer investors have these portfolios 75 00:04:15,800 --> 00:04:20,159 Speaker 3: that are dominated by big Australian names. They're very familiar 76 00:04:20,160 --> 00:04:22,719 Speaker 3: with the companies, they know what they do, they've held 77 00:04:22,760 --> 00:04:25,520 Speaker 3: them for a long time. They probably have quite substantial 78 00:04:25,560 --> 00:04:30,480 Speaker 3: capital gains liabilities attached to those positions, and it has 79 00:04:30,560 --> 00:04:35,400 Speaker 3: taken them time to diversify offshore because pre let's say 80 00:04:35,440 --> 00:04:41,000 Speaker 3: two thousand and ten, you would be mostly probably twenty fifteen, 81 00:04:41,080 --> 00:04:44,080 Speaker 3: let's be honest, mostly looking at unlisted managed funds. 82 00:04:44,120 --> 00:04:45,760 Speaker 2: If you wanted to. 83 00:04:45,440 --> 00:04:50,720 Speaker 3: Buy international equities and diversify your portfolio. The big thing 84 00:04:50,760 --> 00:04:54,719 Speaker 3: people used to buy was Platinum Asset Management, Platinum International Fund. 85 00:04:54,760 --> 00:04:57,520 Speaker 3: They would buy that as an LIC. So there's a 86 00:04:57,560 --> 00:04:59,400 Speaker 3: lot of stuff that people did hold that they would 87 00:04:59,400 --> 00:05:02,440 Speaker 3: buy quite time ago and some of the other listed 88 00:05:02,960 --> 00:05:04,159 Speaker 3: international options. 89 00:05:04,960 --> 00:05:06,480 Speaker 2: But broadly speaking, they just built their. 90 00:05:06,400 --> 00:05:10,080 Speaker 3: Portfolios in domestic equities and then they've taken their time 91 00:05:10,240 --> 00:05:14,320 Speaker 3: to get more international exposure. And online brokers have made 92 00:05:14,320 --> 00:05:16,680 Speaker 3: a big difference. It's much much cheaper and easier to 93 00:05:16,680 --> 00:05:20,280 Speaker 3: buy stuff now that is not just domestically focused. You 94 00:05:20,279 --> 00:05:21,600 Speaker 3: don't have to buy it in the float and then 95 00:05:21,600 --> 00:05:25,280 Speaker 3: wait for your statement every six months. And also you 96 00:05:25,360 --> 00:05:26,479 Speaker 3: can buy directly. 97 00:05:26,880 --> 00:05:29,320 Speaker 1: You can just buy a thousand dollars worth of Walt Disney, 98 00:05:29,400 --> 00:05:31,440 Speaker 1: or you can buy a thousand dollars worth of Coca Cola. 99 00:05:31,800 --> 00:05:32,960 Speaker 1: That was just impossible. 100 00:05:33,000 --> 00:05:36,000 Speaker 3: Basically, it's impossible, and if you could do it, you'd 101 00:05:36,000 --> 00:05:37,400 Speaker 3: have to ring a broker and it cost you one 102 00:05:37,440 --> 00:05:39,479 Speaker 3: hundred dollars to buy a thousand dollars worth of stock, 103 00:05:39,560 --> 00:05:40,600 Speaker 3: so it was very difficult. 104 00:05:40,720 --> 00:05:42,280 Speaker 2: So now it's much less expensive. 105 00:05:42,640 --> 00:05:44,479 Speaker 3: It's very transparent as well, so you can see what 106 00:05:44,520 --> 00:05:46,440 Speaker 3: you're paying an FX, you can see what you're paying 107 00:05:46,440 --> 00:05:48,480 Speaker 3: for the stock. All those sorts of things. You can 108 00:05:48,520 --> 00:05:51,839 Speaker 3: hold them in roughly the same portfolio. So younger investors 109 00:05:52,080 --> 00:05:54,919 Speaker 3: that's how they've chosen to invest, because they have access 110 00:05:54,960 --> 00:05:58,040 Speaker 3: to it and it's affordable and The other thing I 111 00:05:58,040 --> 00:06:00,480 Speaker 3: think that's made a dramatic difference is we've got really 112 00:06:00,520 --> 00:06:07,160 Speaker 3: high quality research now, realisticly for free everywhere Google, but 113 00:06:07,200 --> 00:06:08,440 Speaker 3: also inside your platform. 114 00:06:08,440 --> 00:06:10,240 Speaker 1: You have to be special to get that research. 115 00:06:10,279 --> 00:06:13,640 Speaker 3: The research you can get now on the standard platform 116 00:06:14,160 --> 00:06:17,600 Speaker 3: is better than the average fund manager had in the nineties. Right, 117 00:06:17,640 --> 00:06:21,120 Speaker 3: It's amazing what's available. So it's just much more accessible. 118 00:06:21,400 --> 00:06:24,520 Speaker 3: Funnily enough, though, yes, we do have younger investors who 119 00:06:24,520 --> 00:06:27,680 Speaker 3: buy directly offshore, so NAB traded to US, UK, Germany, 120 00:06:27,680 --> 00:06:31,640 Speaker 3: Hong Kong, there are other markets. Obviously ninety plus percent 121 00:06:31,680 --> 00:06:34,560 Speaker 3: for US as in the US. That's really what people want. 122 00:06:34,839 --> 00:06:37,120 Speaker 1: Yeah, and why wouldn't it be, because the vast majority 123 00:06:37,160 --> 00:06:42,520 Speaker 1: of the MSCI, the Morgan Stanley Capital International Index is 124 00:06:42,720 --> 00:06:46,920 Speaker 1: US anyway, and that's probably even more true with each 125 00:06:46,960 --> 00:06:49,560 Speaker 1: passing year as the US does so well. But tell 126 00:06:49,640 --> 00:06:53,120 Speaker 1: us then, what up until very recently were the favorite 127 00:06:53,160 --> 00:06:58,320 Speaker 1: stocks or funds, which invariably will be ETFs that Ustreans 128 00:06:58,920 --> 00:07:01,760 Speaker 1: have been buying on Wall Street. 129 00:07:02,800 --> 00:07:04,680 Speaker 2: So it's an awesome question. 130 00:07:04,800 --> 00:07:08,680 Speaker 3: It's actually been quite concentrated at the top end. There's 131 00:07:08,680 --> 00:07:12,119 Speaker 3: a really long tale of individual things that people will buy, 132 00:07:12,760 --> 00:07:14,640 Speaker 3: but they tend to be one or two trades a day, 133 00:07:14,680 --> 00:07:18,240 Speaker 3: like the very it's a long long tail, but it's 134 00:07:18,360 --> 00:07:19,880 Speaker 3: very concentrated at the top end. 135 00:07:20,000 --> 00:07:22,520 Speaker 1: Yeah, bits and pieces, but we are so who's at 136 00:07:22,520 --> 00:07:23,360 Speaker 1: the top end, So. 137 00:07:23,320 --> 00:07:25,160 Speaker 3: If we strip out the rats and mice, it was 138 00:07:25,320 --> 00:07:28,760 Speaker 3: all about Apple for probably the first five years that 139 00:07:28,800 --> 00:07:33,960 Speaker 3: we had international trading available, leading up until COVID. Then 140 00:07:34,000 --> 00:07:36,120 Speaker 3: there was a real regime shift, if you want to 141 00:07:36,160 --> 00:07:38,680 Speaker 3: call it. That all about Tesla. And I think I've 142 00:07:38,720 --> 00:07:41,240 Speaker 3: told you this before. At one point Tesla was our 143 00:07:41,320 --> 00:07:47,240 Speaker 3: eleventh largest holding on the platform, above Rio, above Woolworth's, 144 00:07:47,280 --> 00:07:50,440 Speaker 3: above all of these big Australian names. It was enormous, 145 00:07:51,680 --> 00:07:53,920 Speaker 3: big chunk of that was capital appreciation, like people who 146 00:07:53,960 --> 00:07:56,360 Speaker 3: bought it relatively cheaply and it had just run very hard. 147 00:07:56,640 --> 00:07:59,480 Speaker 3: But it was all about Tesla for a while. It's 148 00:07:59,520 --> 00:08:02,560 Speaker 3: still largely about Tesla apart from those people who bought 149 00:08:02,600 --> 00:08:05,000 Speaker 3: in video and it's rocketed and that is a capital 150 00:08:05,040 --> 00:08:06,880 Speaker 3: appreciation story, much smaller base. 151 00:08:07,440 --> 00:08:12,280 Speaker 1: Oh yes, yes, in Vidia of course, Yeah, the AI 152 00:08:12,520 --> 00:08:16,640 Speaker 1: chip maker supreme. Okay, so in Vidia being the new 153 00:08:16,720 --> 00:08:20,080 Speaker 1: kid on the block, Apple being the original of the species, 154 00:08:20,680 --> 00:08:25,320 Speaker 1: Tesla all the time, I expect and still there anything 155 00:08:25,360 --> 00:08:28,800 Speaker 1: else Berkshire Hathaway Microsoft. 156 00:08:28,800 --> 00:08:31,360 Speaker 3: So then you get the other sort of megacap tech 157 00:08:31,440 --> 00:08:35,520 Speaker 3: names plus Berkshire Hathaway. So Berkshire Hathaway absolutely, and I 158 00:08:35,559 --> 00:08:38,160 Speaker 3: love it when you occasionally see someone buy their Class 159 00:08:38,160 --> 00:08:41,520 Speaker 3: A shares, which are many hundreds of thousands of dollars. 160 00:08:41,559 --> 00:08:43,680 Speaker 3: Remember the first time I saw a single three hundred 161 00:08:43,720 --> 00:08:46,640 Speaker 3: and fifty thousand dollar stock and I was like wow, 162 00:08:46,920 --> 00:08:48,120 Speaker 3: but people would buy one. 163 00:08:48,200 --> 00:08:50,360 Speaker 1: But generally you can buy it cheaper, right because it's 164 00:08:50,360 --> 00:08:51,040 Speaker 1: Class B and. 165 00:08:51,240 --> 00:08:53,960 Speaker 3: So you can buy Class B which is the split version, 166 00:08:54,040 --> 00:08:56,480 Speaker 3: it's the same thing, and you can buy smaller parcels. 167 00:08:56,800 --> 00:08:59,520 Speaker 3: So yes, we see Berkshire Hathaway absolutely, and people do 168 00:08:59,640 --> 00:09:03,480 Speaker 3: like to accumulate that over time. Microsoft absolutely big favorite 169 00:09:03,520 --> 00:09:06,160 Speaker 3: last twelve months in particular. It's sort of got a 170 00:09:06,160 --> 00:09:08,200 Speaker 3: bit on sexy for a while there, but it's very 171 00:09:08,280 --> 00:09:13,880 Speaker 3: much back Apple, Amazon, Alphabet, Microsoft, All of the sort 172 00:09:13,920 --> 00:09:18,559 Speaker 3: of Magnificent seven names are in there, but it's very 173 00:09:18,640 --> 00:09:22,720 Speaker 3: much the more sexy consumer facing stocks that were super popular. 174 00:09:22,800 --> 00:09:25,080 Speaker 3: Meta was never that big, which I find really interesting 175 00:09:25,080 --> 00:09:27,400 Speaker 3: because it's not quite as. 176 00:09:27,320 --> 00:09:30,640 Speaker 1: Fun right well, it's for all of Colster Meta being 177 00:09:30,640 --> 00:09:36,680 Speaker 1: Facebook the shares. Okay, now here's the thing. So those 178 00:09:36,760 --> 00:09:40,400 Speaker 1: are the main shares, and you didn't mention ETFs, but 179 00:09:40,480 --> 00:09:42,520 Speaker 1: I think they'd probably be a very good proxy for 180 00:09:42,600 --> 00:09:47,040 Speaker 1: interest as well. So far, what ETFs exchange traded funds, 181 00:09:47,080 --> 00:09:50,679 Speaker 1: index funds are popular that people are using to buy 182 00:09:51,240 --> 00:09:52,800 Speaker 1: the US market and Wall Street. 183 00:09:53,400 --> 00:09:55,839 Speaker 3: Yeah, this is such a good question, right, because you 184 00:09:55,880 --> 00:09:58,560 Speaker 3: do have the option of just buying a domestically listed 185 00:09:58,559 --> 00:10:01,679 Speaker 3: ETF that gives you the EXPOSU and the underlying holdings. 186 00:10:01,720 --> 00:10:04,840 Speaker 3: It's not a synthetic, so you're buying that exposure, but 187 00:10:04,880 --> 00:10:06,840 Speaker 3: you're just buying it at home, and it's much easier 188 00:10:06,840 --> 00:10:09,680 Speaker 3: from a tax perspective. It's just a bit cleaner for people. 189 00:10:10,679 --> 00:10:13,959 Speaker 3: ETFs they start with the ASX two hundred, and I 190 00:10:14,000 --> 00:10:16,280 Speaker 3: find this fascinating. So if you look at our numbers, 191 00:10:16,520 --> 00:10:21,800 Speaker 3: it's ASX two hundred daylight global exposure, but as you say, 192 00:10:21,840 --> 00:10:24,800 Speaker 3: it's based on Miski World usually, and so it's mostly 193 00:10:25,000 --> 00:10:25,880 Speaker 3: US exposure. 194 00:10:26,360 --> 00:10:28,040 Speaker 2: And then SMP five. 195 00:10:27,920 --> 00:10:31,559 Speaker 1: Hundred, okay, not NASDAK look here and. 196 00:10:31,559 --> 00:10:36,160 Speaker 3: There, but it is not anywhere near as dominant as 197 00:10:36,200 --> 00:10:40,760 Speaker 3: you would imagine it would be. Okay, Niche exposure is unkind, 198 00:10:40,840 --> 00:10:44,000 Speaker 3: but it's very much a sleeve of people's portfolio. They 199 00:10:44,040 --> 00:10:46,200 Speaker 3: start with the ASX two hundred to build a core, 200 00:10:46,520 --> 00:10:48,840 Speaker 3: and then they go for these other things. And they'll 201 00:10:48,840 --> 00:10:51,880 Speaker 3: go S and P five hundred, First or World and 202 00:10:51,920 --> 00:10:55,240 Speaker 3: then they'll go specifically Nasdaq or some other neat. 203 00:10:55,720 --> 00:10:59,640 Speaker 1: Okay, all right, that's interesting. And the individual shareholdings are 204 00:11:00,240 --> 00:11:02,480 Speaker 1: what are There is a bigger money in them than 205 00:11:02,520 --> 00:11:03,280 Speaker 1: in the ETFs. 206 00:11:03,800 --> 00:11:09,120 Speaker 3: In aggregate, they're probably close to even. But when you 207 00:11:09,200 --> 00:11:14,920 Speaker 3: consider the ETFs are a handful and the US equities 208 00:11:15,000 --> 00:11:16,680 Speaker 3: is a long list of things. And I did say 209 00:11:16,679 --> 00:11:18,240 Speaker 3: when you look at the individual trades, the will be 210 00:11:18,240 --> 00:11:19,000 Speaker 3: one or two things. 211 00:11:19,120 --> 00:11:20,079 Speaker 2: What's fascinating is. 212 00:11:20,040 --> 00:11:22,880 Speaker 3: In the one or two trades at night, some of 213 00:11:22,880 --> 00:11:25,440 Speaker 3: them are half a million dollars, so they're not one 214 00:11:25,440 --> 00:11:28,559 Speaker 3: thousand dollars. Some of them can be enormous and much 215 00:11:28,679 --> 00:11:32,880 Speaker 3: larger sometimes with people with very specific preferences. It's just 216 00:11:33,160 --> 00:11:35,400 Speaker 3: there's not a large pool of people without preference. 217 00:11:36,200 --> 00:11:38,839 Speaker 1: Okay, okay, really interesting. One thing I want to talk 218 00:11:38,840 --> 00:11:40,600 Speaker 1: to you about just quickly before the break is this. 219 00:11:41,360 --> 00:11:45,600 Speaker 1: HSBC issued a survey recently and they said the number 220 00:11:45,640 --> 00:11:49,960 Speaker 1: of Australians intending to invest overseas is actually declining, and 221 00:11:50,000 --> 00:11:52,319 Speaker 1: that less intend to do it next year compared to 222 00:11:52,400 --> 00:11:57,520 Speaker 1: last year, which I found a baffling, be hard to believe. 223 00:11:57,840 --> 00:12:01,080 Speaker 1: This was before Trump was elected. Button, what do you think? 224 00:12:01,320 --> 00:12:02,640 Speaker 2: Look the joy of my job. 225 00:12:03,240 --> 00:12:05,520 Speaker 3: We see a lot of surveys and we participate in some, 226 00:12:05,600 --> 00:12:08,520 Speaker 3: and we ask our customers and our clients to participate 227 00:12:08,559 --> 00:12:12,600 Speaker 3: in some that are run by third parties. And there's 228 00:12:12,600 --> 00:12:17,400 Speaker 3: always a fascinating lag but doing what people say they're 229 00:12:17,440 --> 00:12:19,120 Speaker 3: going to do and what they actually do. I can 230 00:12:19,160 --> 00:12:22,400 Speaker 3: guarantee you if the market falls twenty percent in three 231 00:12:22,400 --> 00:12:24,640 Speaker 3: weeks like it did in COVID for thirty percent three 232 00:12:24,640 --> 00:12:27,520 Speaker 3: weeks during COVID, we will see a massive influx into 233 00:12:27,559 --> 00:12:30,760 Speaker 3: Australian and international equities one hundred percent. I would put 234 00:12:30,760 --> 00:12:33,600 Speaker 3: my house on that people will do what the market 235 00:12:33,640 --> 00:12:37,079 Speaker 3: presents them with as an opportunity. So if the market 236 00:12:37,080 --> 00:12:39,560 Speaker 3: continues the way it has, I can see people being 237 00:12:39,559 --> 00:12:42,719 Speaker 3: reluctant to put more money into US equities if they 238 00:12:42,760 --> 00:12:44,520 Speaker 3: fall off a cliff, I can see them chasing them 239 00:12:44,640 --> 00:12:45,000 Speaker 3: very hard. 240 00:12:45,600 --> 00:12:49,360 Speaker 1: So you think because they think they've run too hard. 241 00:12:51,080 --> 00:12:54,240 Speaker 3: So very clearly in our data set, you can see 242 00:12:54,280 --> 00:12:56,520 Speaker 3: that people are nervous about where the market is. You 243 00:12:56,559 --> 00:13:00,400 Speaker 3: ask which stocks people hold and what they trade, but 244 00:13:00,440 --> 00:13:03,160 Speaker 3: if we talk about what they're doing, Tesla is more 245 00:13:03,200 --> 00:13:05,120 Speaker 3: of a sell than a buy at the moment. In 246 00:13:05,280 --> 00:13:07,600 Speaker 3: video is more a sell than a buy at the moment, 247 00:13:07,880 --> 00:13:10,360 Speaker 3: and that is primarily because people think they're quite toppy, 248 00:13:10,400 --> 00:13:12,520 Speaker 3: and also their portfolios get really out of whack. If 249 00:13:12,559 --> 00:13:14,679 Speaker 3: you've hold held those things for a while, you can 250 00:13:14,760 --> 00:13:17,120 Speaker 3: end up with fourteen percent of your fourteen percent of 251 00:13:17,120 --> 00:13:19,480 Speaker 3: your portfolio in a handful of things. 252 00:13:19,360 --> 00:13:22,120 Speaker 1: Or ninety or ninety depending. 253 00:13:21,760 --> 00:13:23,840 Speaker 2: On when you're starting what else you've got. So people 254 00:13:23,920 --> 00:13:26,440 Speaker 2: you know they will rebalance at some point. It's going 255 00:13:26,520 --> 00:13:27,040 Speaker 2: to come back. 256 00:13:27,240 --> 00:13:30,200 Speaker 3: So our investors do get nervous when the market's really 257 00:13:30,240 --> 00:13:32,120 Speaker 3: toppy and they will take money off the table. We 258 00:13:32,160 --> 00:13:34,400 Speaker 3: see it in Australian banks in particular this year, like 259 00:13:34,440 --> 00:13:35,000 Speaker 3: they've just been. 260 00:13:34,920 --> 00:13:35,960 Speaker 2: Trimming and trimming. 261 00:13:35,720 --> 00:13:37,840 Speaker 3: Because they go one hundred and fifty dollars for CBA 262 00:13:38,000 --> 00:13:41,120 Speaker 3: is mental. It didn't grow its revenues by fifty percent. 263 00:13:41,360 --> 00:13:43,679 Speaker 1: That's right, and every broker in town says they're worth 264 00:13:43,720 --> 00:13:46,440 Speaker 1: a hundred. Yeah, but every broker's wrong so far Okay, 265 00:13:46,559 --> 00:13:49,360 Speaker 1: we'll hold it. We'll hold it right there. Back in 266 00:13:49,400 --> 00:14:00,640 Speaker 1: a moment. Hello and welcome back to the Austriallians Money 267 00:14:00,640 --> 00:14:03,720 Speaker 1: Puzzle Podcast. I'm James Kirby. I'm talking to Jemma Dale 268 00:14:03,720 --> 00:14:06,760 Speaker 1: from NAB, head of Investor Behavior. Always great to talk 269 00:14:06,800 --> 00:14:10,360 Speaker 1: to Jemma. Very good to culture this week as we're 270 00:14:10,400 --> 00:14:13,599 Speaker 1: starting to get a sense that we were starting to 271 00:14:13,679 --> 00:14:16,800 Speaker 1: understand first of all, that Donald Trump is back. More 272 00:14:16,880 --> 00:14:21,239 Speaker 1: than that that's a Republican president markets like Republican presidents. 273 00:14:21,520 --> 00:14:24,360 Speaker 1: It's entertaining, I must tell you historically to find out 274 00:14:24,440 --> 00:14:27,680 Speaker 1: that on an annual basis that Democrat presidents during their 275 00:14:27,720 --> 00:14:32,200 Speaker 1: regime have higher returns paranum on the market than Republican presidents. 276 00:14:32,720 --> 00:14:35,360 Speaker 1: Republicans would argue that the Republicans come in and clean 277 00:14:35,400 --> 00:14:37,480 Speaker 1: it up, of course, just like the Libs would argue 278 00:14:37,520 --> 00:14:40,000 Speaker 1: that's what happens here. But we'll put that to one side. 279 00:14:40,320 --> 00:14:44,840 Speaker 1: There are the facts that that Democrat president sees paranum 280 00:14:45,000 --> 00:14:49,160 Speaker 1: returns have been higher than Republican presidents over a long 281 00:14:49,200 --> 00:14:51,320 Speaker 1: period of time, and I've done a whole report on 282 00:14:51,360 --> 00:14:53,560 Speaker 1: that in the Australian recently. But here's the point I 283 00:14:53,600 --> 00:14:56,440 Speaker 1: want to make. So the thing with Trump is that, 284 00:14:56,760 --> 00:14:59,120 Speaker 1: of course there's this sugar hit at the start and 285 00:14:59,240 --> 00:15:01,400 Speaker 1: excitement by the markets because they've got a pro market 286 00:15:01,400 --> 00:15:07,440 Speaker 1: president coming. In longer term, there's concerns about Tariff's protectionism 287 00:15:07,680 --> 00:15:11,240 Speaker 1: and other issues such as strength of the US dollar 288 00:15:11,320 --> 00:15:15,960 Speaker 1: and what that might mean, bond yields which are being 289 00:15:16,040 --> 00:15:19,600 Speaker 1: going up even though the US FED has been cutting rates. 290 00:15:20,160 --> 00:15:22,680 Speaker 1: So various signals coming out there. But from an investment 291 00:15:22,680 --> 00:15:25,520 Speaker 1: point of view, I think, folks, the outstanding dimension of 292 00:15:25,560 --> 00:15:28,560 Speaker 1: this is that there's a sense that the US markets 293 00:15:28,600 --> 00:15:30,960 Speaker 1: will continue to be good, but it won't be the 294 00:15:31,000 --> 00:15:34,200 Speaker 1: big tech stocks. This is the narrative at the moment. 295 00:15:34,240 --> 00:15:35,840 Speaker 1: We don't know if it's right around, but the narrative 296 00:15:35,920 --> 00:15:39,640 Speaker 1: is that the big tex stocks will struggle now under 297 00:15:40,040 --> 00:15:44,400 Speaker 1: a Trump because he's not as globalist as his predecessors. 298 00:15:44,440 --> 00:15:48,000 Speaker 1: That's one thing. Secondly, then that implies that the traditional 299 00:15:48,400 --> 00:15:53,400 Speaker 1: US blue chips, the Coca Colas, the Disneys, that they 300 00:15:53,440 --> 00:15:58,760 Speaker 1: will actually do better than the magnificent seven protesla to 301 00:15:58,800 --> 00:16:01,640 Speaker 1: one side, because obviously test it's just this complete one off, 302 00:16:01,720 --> 00:16:05,680 Speaker 1: and now you have Musk literally inside the White House cabinet. 303 00:16:06,160 --> 00:16:08,680 Speaker 1: And then also there's a sense that US small caps 304 00:16:08,680 --> 00:16:10,680 Speaker 1: will do better than big caps, and I are certainly 305 00:16:10,680 --> 00:16:12,840 Speaker 1: looking at the US small cap ETFs. They have been 306 00:16:12,920 --> 00:16:16,080 Speaker 1: really good. Forty three percent I see up in a 307 00:16:16,160 --> 00:16:18,640 Speaker 1: year on the US small cap ETFs. That is a 308 00:16:18,680 --> 00:16:21,000 Speaker 1: hell of a return for an ETF. What do you 309 00:16:21,000 --> 00:16:22,840 Speaker 1: think about that, Jemmy, Do you think you don't see 310 00:16:22,880 --> 00:16:27,280 Speaker 1: anything in your numbers to suggest that people are moving 311 00:16:27,320 --> 00:16:30,720 Speaker 1: in that way yet responding to those ideas. 312 00:16:31,480 --> 00:16:33,240 Speaker 2: I think it's really interesting. 313 00:16:33,360 --> 00:16:39,440 Speaker 3: We we're only talking a week ago that people were 314 00:16:39,880 --> 00:16:44,640 Speaker 3: thinking this would be an extremely tight election. No one 315 00:16:44,760 --> 00:16:47,600 Speaker 3: was predicting a clean sweep, no one was predicting a 316 00:16:47,720 --> 00:16:51,320 Speaker 3: very dominant Trump presidency. And so the fact that everyone's 317 00:16:51,360 --> 00:16:52,640 Speaker 3: come out and gone right, this is what's going to 318 00:16:52,640 --> 00:16:54,640 Speaker 3: happen in the market is hilarious to me because we 319 00:16:54,640 --> 00:16:56,960 Speaker 3: were all wrong about a week ago about pretty much everything. 320 00:16:58,640 --> 00:17:02,240 Speaker 3: Pundits and polsters. Some would argue that the betting markets 321 00:17:02,320 --> 00:17:05,320 Speaker 3: were accurate, but even those took a while. They moved 322 00:17:05,440 --> 00:17:07,760 Speaker 3: very hard on the day, they took some time. 323 00:17:07,880 --> 00:17:10,800 Speaker 1: They were right in the last forty eight hours, yeah. 324 00:17:10,520 --> 00:17:13,280 Speaker 3: They were, but forty eight hours no prizes, surely, but 325 00:17:13,400 --> 00:17:15,000 Speaker 3: you had a favorit of data to work with in 326 00:17:15,040 --> 00:17:18,439 Speaker 3: the last little bit. So it's quite fascinating to me 327 00:17:18,520 --> 00:17:20,800 Speaker 3: that everyone's got a strong view and they're very confident 328 00:17:20,880 --> 00:17:23,720 Speaker 3: what's going to happen now and you should shift accordingly. Look, 329 00:17:24,160 --> 00:17:26,879 Speaker 3: there have been I'm just trying to unpick all the 330 00:17:26,920 --> 00:17:29,640 Speaker 3: different parts of that. The one that you haven't mentioned 331 00:17:29,680 --> 00:17:30,520 Speaker 3: that I am hearing. 332 00:17:30,400 --> 00:17:33,600 Speaker 2: A lot is energy. That energy has to be part 333 00:17:33,600 --> 00:17:35,800 Speaker 2: of the mix because there. 334 00:17:35,640 --> 00:17:40,320 Speaker 1: Is a specifically old world energy gets a better run. 335 00:17:40,520 --> 00:17:42,040 Speaker 2: Ye traditional energy. 336 00:17:41,880 --> 00:17:43,760 Speaker 1: Traditionally oil and gas. 337 00:17:43,840 --> 00:17:46,400 Speaker 3: Yeah, let's call it traditional energy. A couple of different things. 338 00:17:46,400 --> 00:17:51,240 Speaker 3: One is there's just this insane demand for energy for 339 00:17:51,520 --> 00:17:52,639 Speaker 3: building out AI. 340 00:17:52,400 --> 00:17:53,320 Speaker 2: And data centers. 341 00:17:53,640 --> 00:17:55,639 Speaker 3: So that's a story that's been going all year and 342 00:17:55,680 --> 00:17:58,159 Speaker 3: everyone's talking about it, and pretty much every fund manager 343 00:17:58,200 --> 00:18:00,440 Speaker 3: I speak to is like, look and as are. 344 00:18:00,440 --> 00:18:00,760 Speaker 2: What they are. 345 00:18:00,840 --> 00:18:03,320 Speaker 3: We've already seen in video run super hard. On the 346 00:18:03,359 --> 00:18:06,200 Speaker 3: sort of more tech side of things. Realistically, is how 347 00:18:06,240 --> 00:18:09,280 Speaker 3: you're going to fuel these things. That's the issue. And 348 00:18:09,400 --> 00:18:11,719 Speaker 3: let's talk about the data centers and how we power them. 349 00:18:11,760 --> 00:18:13,560 Speaker 3: And that's why uranium's on a run, because we think 350 00:18:13,640 --> 00:18:15,400 Speaker 3: nuclear might be the solution. We're going to talk about 351 00:18:15,400 --> 00:18:16,440 Speaker 3: three Mile Island. 352 00:18:16,160 --> 00:18:18,560 Speaker 2: All of this stuff. So there's that component which is 353 00:18:18,680 --> 00:18:19,360 Speaker 2: very interesting. 354 00:18:20,440 --> 00:18:22,560 Speaker 3: I didn't do this research myself, so I need to 355 00:18:22,560 --> 00:18:25,560 Speaker 3: attribute it appropriately. The guys at Plato Asset Management did 356 00:18:25,600 --> 00:18:28,679 Speaker 3: some work this story about the tech giants going and 357 00:18:28,720 --> 00:18:32,280 Speaker 3: actually buying nuclear power plants because they need to be 358 00:18:32,359 --> 00:18:35,879 Speaker 3: able to fuel their own extraordinary demands for power as 359 00:18:35,920 --> 00:18:38,480 Speaker 3: AI kind of grows exponentially. 360 00:18:38,680 --> 00:18:40,679 Speaker 1: So so what does it mean? Sorry for shareholders then 361 00:18:40,720 --> 00:18:41,280 Speaker 1: what does it mean? 362 00:18:41,720 --> 00:18:44,800 Speaker 3: So this is quite interesting, Like you're an Australian shareholder, 363 00:18:44,800 --> 00:18:47,000 Speaker 3: you're starting to look to the resource sector. So even 364 00:18:47,040 --> 00:18:52,679 Speaker 3: though we're quite concerned about lack of super exciting stimulus 365 00:18:52,680 --> 00:18:55,880 Speaker 3: out of China and the downward pressure on commodity prices 366 00:18:55,920 --> 00:18:58,200 Speaker 3: as a result of affair bitive stuff going on there, 367 00:18:58,280 --> 00:19:01,240 Speaker 3: if there's insane demands for power and traditional energy, that's 368 00:19:01,280 --> 00:19:05,200 Speaker 3: not bad for Australia as a sort of primary producer. 369 00:19:04,760 --> 00:19:05,480 Speaker 2: In those areas. 370 00:19:07,320 --> 00:19:09,239 Speaker 3: That's quite interesting to me, and I'm hearing that a lot, 371 00:19:09,280 --> 00:19:11,080 Speaker 3: and we see that a little bit in our numbers. 372 00:19:11,440 --> 00:19:12,960 Speaker 3: What I was going to say, though that piece from 373 00:19:12,960 --> 00:19:16,040 Speaker 3: Plato that I'm saying that traditional energy stocks did better 374 00:19:16,119 --> 00:19:20,000 Speaker 3: under Biden and renewable energy did better under Trump, which 375 00:19:20,000 --> 00:19:22,560 Speaker 3: is hilarious. Right, So everything you think should happen doesn't. 376 00:19:22,640 --> 00:19:24,639 Speaker 1: That is a fact. I saw that report and that 377 00:19:24,720 --> 00:19:26,960 Speaker 1: the oiding gas didn't do us well under Trump mark one, 378 00:19:27,320 --> 00:19:29,280 Speaker 1: then people thought it would do. That doesn't mean it 379 00:19:29,280 --> 00:19:32,720 Speaker 1: won't do better under him second time round. Okay, Just 380 00:19:32,760 --> 00:19:35,040 Speaker 1: in terms of just looking over at various parts, like 381 00:19:35,119 --> 00:19:38,359 Speaker 1: what does it mean that the Magnificent seven mightn't be 382 00:19:38,440 --> 00:19:40,600 Speaker 1: quite as good relative to the rest of the market 383 00:19:40,640 --> 00:19:42,199 Speaker 1: than they have been under Trump? 384 00:19:42,960 --> 00:19:46,439 Speaker 3: I think the challenge is they have run so incredibly hard. 385 00:19:46,840 --> 00:19:52,280 Speaker 3: Any risk for downside is going to cause quite significant 386 00:19:52,320 --> 00:19:54,919 Speaker 3: contraction potentially in those share prices. Right, They're all priced 387 00:19:54,920 --> 00:19:59,000 Speaker 3: for absolute perfection, and so that there's always downside risk 388 00:19:59,040 --> 00:20:03,840 Speaker 3: for those guys. There's I think, given how the major 389 00:20:03,880 --> 00:20:07,120 Speaker 3: appointments are being made currently, and they're happening in real time, right, 390 00:20:07,119 --> 00:20:09,800 Speaker 3: you and I are getting updated by the hour. Who's 391 00:20:09,800 --> 00:20:12,520 Speaker 3: in charge of what, who's in charge of what, and 392 00:20:12,560 --> 00:20:14,760 Speaker 3: what they think and how they do stuff That is 393 00:20:16,080 --> 00:20:18,359 Speaker 3: that will probably take some time to play out. So 394 00:20:18,520 --> 00:20:24,720 Speaker 3: I don't feel anyone needs to be chasing anything at 395 00:20:24,720 --> 00:20:27,280 Speaker 3: the moment. Mostly what we see from our investors, they're 396 00:20:27,320 --> 00:20:28,679 Speaker 3: taking money off the table. 397 00:20:29,000 --> 00:20:31,639 Speaker 2: The one thing you didn't mention though, that I do. 398 00:20:31,520 --> 00:20:35,760 Speaker 3: See our investors really interested in is crypto and particularly bitcoin. 399 00:20:36,440 --> 00:20:39,960 Speaker 2: Yes, so that is coming through quite strongly. 400 00:20:39,920 --> 00:20:43,760 Speaker 1: By buying bitcoin. What ETFs or so. 401 00:20:43,960 --> 00:20:47,879 Speaker 3: One is micro Strategy, the company which is one hundred 402 00:20:47,880 --> 00:20:51,480 Speaker 3: percent invested in bitcoin, and then the other is bitcoin ETFs, 403 00:20:51,520 --> 00:20:54,520 Speaker 3: which are listed in the US. These ones specifically, they're 404 00:20:54,640 --> 00:20:57,480 Speaker 3: very small trades, I must say, and it's not huge 405 00:20:57,560 --> 00:21:00,560 Speaker 3: numbers of people, but they've gone from being or two 406 00:21:00,600 --> 00:21:02,480 Speaker 3: weigh down the list of popping right up in the 407 00:21:02,560 --> 00:21:05,840 Speaker 3: last week. And there are many bitcoiners who believe that 408 00:21:05,920 --> 00:21:09,960 Speaker 3: Trump and Elon in particular are very pro crypto and 409 00:21:10,000 --> 00:21:11,879 Speaker 3: therefore there's a real opportunity there. 410 00:21:13,840 --> 00:21:17,240 Speaker 1: And it's up ninety percent this year. Yeah, it's been incredible. 411 00:21:17,440 --> 00:21:19,600 Speaker 3: If you're not already in these things, is it the 412 00:21:19,640 --> 00:21:20,600 Speaker 3: time to chase them? 413 00:21:21,040 --> 00:21:21,640 Speaker 2: I don't know. 414 00:21:21,760 --> 00:21:23,600 Speaker 3: For those who are already holding, it's a bit of 415 00:21:23,600 --> 00:21:25,200 Speaker 3: a different story, I think. 416 00:21:25,080 --> 00:21:27,919 Speaker 1: Yeah, right, okay, And I'm sure listeners are aware that 417 00:21:28,200 --> 00:21:32,760 Speaker 1: Trump part of his campaign was to go propriate pro 418 00:21:32,840 --> 00:21:39,840 Speaker 1: crypto and to deregulate around crypto, and most importantly to 419 00:21:39,880 --> 00:21:44,120 Speaker 1: create a situation where bitcoin could be a strategic reserve 420 00:21:44,280 --> 00:21:47,679 Speaker 1: asset for the US, which is a spectacular piece of 421 00:21:47,720 --> 00:21:50,679 Speaker 1: information if he goes that far, and it means that 422 00:21:50,720 --> 00:21:56,680 Speaker 1: bitcoin basically ranks beside gold and the US dollar inside 423 00:21:56,720 --> 00:21:59,639 Speaker 1: the US administration. Now that hasn't come to pass, but 424 00:21:59,680 --> 00:22:02,800 Speaker 1: he's said that. Not everything that Trump says comes to pass, 425 00:22:02,840 --> 00:22:04,920 Speaker 1: of course, but it's worth anning. We'll take short break. 426 00:22:04,920 --> 00:22:07,040 Speaker 1: We've got some a very good multi park question which 427 00:22:07,040 --> 00:22:09,680 Speaker 1: I think will probably capture the entire segment in a 428 00:22:09,720 --> 00:22:19,520 Speaker 1: moment from Deton. Hello, welcome back to the Australian's Money Puzzle. 429 00:22:19,720 --> 00:22:23,200 Speaker 1: I'm James Kirby with Jemma Dale, and we are having 430 00:22:23,320 --> 00:22:27,080 Speaker 1: a great discussion. I think about Trump, what it means 431 00:22:27,080 --> 00:22:30,280 Speaker 1: for investors, what it means for Australian investors in particular, 432 00:22:30,440 --> 00:22:32,040 Speaker 1: and I think in the early part of the show 433 00:22:32,080 --> 00:22:34,919 Speaker 1: there it's worth just covering off a couple of things there, 434 00:22:35,119 --> 00:22:39,919 Speaker 1: As Jemma said, the favorites of Australian investors they buy ETFs, 435 00:22:41,200 --> 00:22:44,520 Speaker 1: or they buy the Big seven, the tech stocks that 436 00:22:44,600 --> 00:22:48,520 Speaker 1: we are all familiar with, or they buy Berkshire Hathaway. 437 00:22:49,000 --> 00:22:51,440 Speaker 1: That seems to be a Warren Buffet's Berkshire hatway. They're 438 00:22:51,480 --> 00:22:53,640 Speaker 1: the leaders and they haven't changed. For what it's worth, 439 00:22:53,640 --> 00:22:56,760 Speaker 1: we don't see any change so far in the numbers. 440 00:22:56,760 --> 00:22:58,679 Speaker 1: People aren't betting if you like that there'll be a 441 00:22:58,720 --> 00:23:02,200 Speaker 1: swing towards the traditional blue chips or oil and gas 442 00:23:02,200 --> 00:23:05,040 Speaker 1: Exxon and Co. In the US just yet. The other 443 00:23:05,080 --> 00:23:08,280 Speaker 1: thing is Bitcoin, which course is absolutely racing up on 444 00:23:08,359 --> 00:23:10,960 Speaker 1: the back of the fact that Trump wants to make 445 00:23:11,000 --> 00:23:15,320 Speaker 1: it a part of strategic reserve in the US. And 446 00:23:15,440 --> 00:23:19,960 Speaker 1: Elon Musk, another pro crypto person, has become actually inside 447 00:23:20,000 --> 00:23:24,639 Speaker 1: the administration of the Trump cabinet. I noticed though that 448 00:23:24,680 --> 00:23:28,280 Speaker 1: he shares the job, which would suggest that he said, 449 00:23:28,359 --> 00:23:30,479 Speaker 1: I can only spend so much time on this one. Donald, 450 00:23:31,119 --> 00:23:34,000 Speaker 1: All right, now Declan's question bear with me here. It's 451 00:23:34,000 --> 00:23:37,679 Speaker 1: in several parts. It's really interesting. In your recent episode, 452 00:23:37,720 --> 00:23:41,600 Speaker 1: you said if people opt to invest in ETFs via 453 00:23:41,720 --> 00:23:44,240 Speaker 1: super funds, the fees should come down. In fact, the 454 00:23:44,240 --> 00:23:48,400 Speaker 1: super funds actually charge additional administration fees to access these options. 455 00:23:49,040 --> 00:23:51,560 Speaker 1: My wife and I left. We will mention names here 456 00:23:51,640 --> 00:23:54,520 Speaker 1: on this occasion. It's never advice, remember, it's only information. 457 00:23:55,000 --> 00:23:56,520 Speaker 1: I think we can mention the name because it's the 458 00:23:56,560 --> 00:23:58,800 Speaker 1: biggest super fund in Australia. My wife and I left 459 00:23:58,800 --> 00:24:02,000 Speaker 1: Australian Super to set up an SMSF four years ago. 460 00:24:02,160 --> 00:24:04,600 Speaker 1: And then he makes the point that Australian Super has 461 00:24:04,640 --> 00:24:07,320 Speaker 1: the lowest fees, among the lowest fees out there. But 462 00:24:07,359 --> 00:24:11,439 Speaker 1: even still the Australian Super fees with the member direct 463 00:24:11,440 --> 00:24:13,600 Speaker 1: option would add up to more than what a cost 464 00:24:13,640 --> 00:24:16,560 Speaker 1: to run our SMSF. I'll have I will have Australian 465 00:24:16,600 --> 00:24:19,160 Speaker 1: Super on the line to me after this show. Don't 466 00:24:19,200 --> 00:24:22,920 Speaker 1: you worry about that? Anyway? His main point is over 467 00:24:22,960 --> 00:24:27,399 Speaker 1: the four years so far, our SMSF has outperformed the 468 00:24:27,480 --> 00:24:29,440 Speaker 1: option that they might have taken in the big super 469 00:24:29,440 --> 00:24:31,960 Speaker 1: fund by one percent perannum. And what we're doing is 470 00:24:32,040 --> 00:24:35,439 Speaker 1: very simple. We invest in a few ETFs from some 471 00:24:35,560 --> 00:24:38,200 Speaker 1: of the major players, all of which have a long 472 00:24:38,240 --> 00:24:40,720 Speaker 1: track record and very low fees. Okay, a couple of 473 00:24:40,840 --> 00:24:47,080 Speaker 1: very interesting points there. The funds, the big industry funds 474 00:24:47,080 --> 00:24:50,480 Speaker 1: which dominate the super fund sector, do offer ETF options, 475 00:24:51,400 --> 00:24:55,879 Speaker 1: and they all do, and they put in ETF options 476 00:24:56,080 --> 00:24:58,959 Speaker 1: for the simple reason that they I would say, at 477 00:24:59,040 --> 00:25:00,760 Speaker 1: least that I would say they were worried that the 478 00:25:00,760 --> 00:25:03,840 Speaker 1: ETFs were so successful that they knew people would actually say, listen, 479 00:25:03,840 --> 00:25:05,560 Speaker 1: I just put my money into an ETF, start an 480 00:25:05,640 --> 00:25:09,080 Speaker 1: SMSF and have really low fees, so they included them 481 00:25:09,480 --> 00:25:11,920 Speaker 1: in their menus. That would be all the big funds. 482 00:25:11,920 --> 00:25:15,080 Speaker 1: You would expect them to have ETF options. Whether it 483 00:25:15,240 --> 00:25:19,280 Speaker 1: is cheaper or not, that will depend entirely on your SMSF, 484 00:25:19,400 --> 00:25:21,720 Speaker 1: the structure of it, the way you do, the nature 485 00:25:21,800 --> 00:25:25,120 Speaker 1: of the accountant and order shows, etcetera that you use. 486 00:25:25,680 --> 00:25:28,120 Speaker 1: But I'm no doubt it could be cheaper. I'm sure 487 00:25:28,160 --> 00:25:31,800 Speaker 1: it could for somebody. What do you think of that 488 00:25:32,040 --> 00:25:36,040 Speaker 1: basic observation, Gemma about the ETFs inside the big super 489 00:25:36,040 --> 00:25:39,480 Speaker 1: If you had a choice of an ETF heavy SMSF 490 00:25:40,359 --> 00:25:44,240 Speaker 1: or an industry fund where your focus was ETFs, would 491 00:25:44,240 --> 00:25:45,160 Speaker 1: there be much difference. 492 00:25:45,720 --> 00:25:49,160 Speaker 3: So the comment I would make is that an ETF 493 00:25:49,200 --> 00:25:51,680 Speaker 3: is just a rapper. It would depends on what you're 494 00:25:51,720 --> 00:25:56,280 Speaker 3: buying as the what the actual composition is. Right, So 495 00:25:56,320 --> 00:25:59,320 Speaker 3: if you're buying the ISx two hundred and the s 496 00:25:59,400 --> 00:26:02,600 Speaker 3: and P five hundred and index based ETFs like big 497 00:26:02,840 --> 00:26:11,199 Speaker 3: global indices, most super funds, not all will offer an 498 00:26:11,320 --> 00:26:14,800 Speaker 3: index option. So you could just go into the index 499 00:26:14,800 --> 00:26:18,640 Speaker 3: option in your public office super fund, which is theoretically 500 00:26:18,720 --> 00:26:21,959 Speaker 3: much cheaper and giving you exactly the same underlying exposure. 501 00:26:22,680 --> 00:26:25,359 Speaker 3: So I'm very pro ETF. I'm very pro SMSF for 502 00:26:25,359 --> 00:26:28,080 Speaker 3: the right person, right, they're fantastic things. A lot of 503 00:26:28,119 --> 00:26:30,920 Speaker 3: the big super funds do offer index options, and they're 504 00:26:30,960 --> 00:26:34,680 Speaker 3: super cheap, right, Like an ETF is five basis points 505 00:26:34,680 --> 00:26:39,240 Speaker 3: if you're buying the really big indices, and an index 506 00:26:39,320 --> 00:26:43,200 Speaker 3: based option inside a superfund should be very cheap because 507 00:26:43,200 --> 00:26:46,120 Speaker 3: they're very cheap to run. You're not paying professionals, you're 508 00:26:46,160 --> 00:26:49,960 Speaker 3: just getting it done for you. So the fair comparison 509 00:26:50,040 --> 00:26:52,560 Speaker 3: is not between the member direct option and an ETF. 510 00:26:52,760 --> 00:26:56,280 Speaker 3: The fair comparison is between the index option and an SMSF. 511 00:26:56,280 --> 00:26:58,400 Speaker 3: With ETFs, and frankly, it depends on how much money 512 00:26:58,400 --> 00:26:59,680 Speaker 3: you've got in the fund and who you're employing to 513 00:26:59,720 --> 00:27:01,159 Speaker 3: run it for you and all that kind of business. 514 00:27:01,240 --> 00:27:04,199 Speaker 1: Yes, yeah, and are you comparing apples with apples in 515 00:27:04,320 --> 00:27:08,800 Speaker 1: terms of the waitings and the exact choice, et cetera. 516 00:27:08,880 --> 00:27:10,720 Speaker 1: And the other thing. If I if I was about 517 00:27:10,760 --> 00:27:15,159 Speaker 1: to call a journalist who had just read such a 518 00:27:15,240 --> 00:27:18,359 Speaker 1: piece of correspondence out, I would say you're you have 519 00:27:18,400 --> 00:27:20,600 Speaker 1: to take a global view, holistic view. Yeah, you're getting 520 00:27:20,600 --> 00:27:22,840 Speaker 1: your insurance, You're getting your insurance cheaper through your fond 521 00:27:22,880 --> 00:27:24,520 Speaker 1: and all that day would have plenty of answers on 522 00:27:24,560 --> 00:27:27,280 Speaker 1: that one. But a really interesting point, Decline, And you 523 00:27:27,280 --> 00:27:30,480 Speaker 1: know it comes up all the time, and I would 524 00:27:30,480 --> 00:27:32,879 Speaker 1: just say also that people often say to me should 525 00:27:32,880 --> 00:27:36,240 Speaker 1: I get ETFs or should I put the money into super? 526 00:27:36,560 --> 00:27:38,800 Speaker 1: And I do regularly say, you do know you can 527 00:27:38,840 --> 00:27:40,600 Speaker 1: get ETFs in your super. You do know that that 528 00:27:40,680 --> 00:27:43,440 Speaker 1: won't you, which people don't always know. But Decline certainly 529 00:27:43,520 --> 00:27:45,280 Speaker 1: knew and was able to compare the two, and in 530 00:27:45,320 --> 00:27:48,040 Speaker 1: his case it was better to have an SMSF okay, 531 00:27:48,040 --> 00:27:53,879 Speaker 1: thank you declin now. Final question Andy, employer contributions and 532 00:27:54,240 --> 00:27:57,800 Speaker 1: yearly caps aside, is there any difference between salary sacrificing 533 00:27:57,840 --> 00:28:01,960 Speaker 1: one hundred dollars a week or five two hundred being 534 00:28:02,000 --> 00:28:04,400 Speaker 1: fifty two weeks at the end of the financial year 535 00:28:04,440 --> 00:28:08,639 Speaker 1: and claiming it as the concessional contribution? Do I ultimately 536 00:28:08,680 --> 00:28:12,840 Speaker 1: get the same tax saving. I'm just risking the game 537 00:28:12,880 --> 00:28:15,720 Speaker 1: of timing the market rusus time in the market. It's 538 00:28:15,840 --> 00:28:21,240 Speaker 1: tempting to do so and jump in late answer, there's not. 539 00:28:21,240 --> 00:28:24,640 Speaker 3: A huge difference, Like it's there's not a huge difference. 540 00:28:24,760 --> 00:28:27,639 Speaker 3: I mean it's really part of it is discipline, Like 541 00:28:27,680 --> 00:28:28,399 Speaker 3: are you going to put. 542 00:28:28,240 --> 00:28:29,520 Speaker 1: When you say that's not a huge difference, do you 543 00:28:29,600 --> 00:28:31,040 Speaker 1: mean history would suggest. 544 00:28:31,240 --> 00:28:34,040 Speaker 3: History would suggest, Well, I think it's more behavioral than 545 00:28:34,040 --> 00:28:35,520 Speaker 3: anything else. Are you going to make sure you put 546 00:28:35,520 --> 00:28:38,280 Speaker 3: the one hundred dollars aside? You know, if you get paid weekly, 547 00:28:38,320 --> 00:28:40,560 Speaker 3: whatever it is, if it's monthly, whatever, are you going 548 00:28:40,600 --> 00:28:42,560 Speaker 3: to put the money aside and have it at the 549 00:28:42,720 --> 00:28:45,320 Speaker 3: end of the year and have the discipline to do 550 00:28:45,400 --> 00:28:47,880 Speaker 3: it and not accidentally miss the cut off date for 551 00:28:47,880 --> 00:28:50,960 Speaker 3: your super fund or whatever. Because just these little things 552 00:28:50,960 --> 00:28:51,720 Speaker 3: that trip you up. 553 00:28:52,240 --> 00:28:53,760 Speaker 1: But what about dollar cost averaging? 554 00:28:54,920 --> 00:28:57,360 Speaker 3: Yeah, so dollar cost averaging is very effective, but I 555 00:28:57,400 --> 00:29:00,800 Speaker 3: think to an extent it is mostly the discipline of 556 00:29:00,840 --> 00:29:03,480 Speaker 3: making sure you do it. But if you're putting it 557 00:29:03,520 --> 00:29:05,840 Speaker 3: in a mortgage offset account for the full year and 558 00:29:05,880 --> 00:29:08,840 Speaker 3: then putting it in with a deduction, maybe that's very effective. 559 00:29:08,960 --> 00:29:11,560 Speaker 2: You I think there's a few variable. 560 00:29:11,240 --> 00:29:14,479 Speaker 1: Maybe that's very effective if you have a mortgage like that. 561 00:29:14,760 --> 00:29:16,640 Speaker 2: But don't talk to yourself, don't. 562 00:29:16,440 --> 00:29:19,160 Speaker 1: Touch yourself, and it's not advice Andy, And by the way, 563 00:29:19,280 --> 00:29:22,320 Speaker 1: just in case starcat averaging, folks, you do know what 564 00:29:22,320 --> 00:29:26,440 Speaker 1: this is. I hope. It's the theory that very regular 565 00:29:26,640 --> 00:29:31,600 Speaker 1: set identical payments paid through the season, monthly or weekly 566 00:29:31,880 --> 00:29:34,760 Speaker 1: or whatever, over a long period of time, you will 567 00:29:35,840 --> 00:29:39,240 Speaker 1: be better off because you don't get caught in market 568 00:29:39,400 --> 00:29:42,800 Speaker 1: crashes or downturns. So on average, you pay about the 569 00:29:42,880 --> 00:29:44,720 Speaker 1: right price all the time. So for the times you 570 00:29:44,760 --> 00:29:48,160 Speaker 1: pay too much when the market's hot, you also buy 571 00:29:48,200 --> 00:29:52,480 Speaker 1: in the low times and it strips out the human 572 00:29:52,560 --> 00:29:56,880 Speaker 1: tendency to try and grab a bargain, which is pretty good. 573 00:29:56,960 --> 00:29:59,360 Speaker 3: Again, that's behavioral, right, Like you can look at it 574 00:29:59,400 --> 00:30:00,960 Speaker 3: over a different times frames and it works. 575 00:30:01,440 --> 00:30:03,440 Speaker 1: This is your thing, right, investor behavior, your head of 576 00:30:03,480 --> 00:30:04,400 Speaker 1: investor behavior. 577 00:30:04,720 --> 00:30:08,000 Speaker 3: It depends, Like there are times when it's a terrible idea. 578 00:30:08,040 --> 00:30:09,880 Speaker 3: If you're just dollar cost averaging up, you might as 579 00:30:09,880 --> 00:30:11,560 Speaker 3: well just board at the beginning and off you go. 580 00:30:11,920 --> 00:30:14,680 Speaker 3: But it depends if you have also a lump some 581 00:30:14,880 --> 00:30:16,800 Speaker 3: to work with. If you don't have a lump sum 582 00:30:16,840 --> 00:30:18,760 Speaker 3: to work with, it's irrelevant, isn't it. You have to 583 00:30:18,800 --> 00:30:20,280 Speaker 3: dolar cost average because that's. 584 00:30:20,160 --> 00:30:21,240 Speaker 2: Your only way of getting in. 585 00:30:21,560 --> 00:30:23,760 Speaker 3: If you have a lump sum and you're nervous about 586 00:30:23,760 --> 00:30:27,120 Speaker 3: timing the market, then it just takes away the anxiety. 587 00:30:27,560 --> 00:30:31,680 Speaker 3: So again I think the maths is less important than 588 00:30:32,160 --> 00:30:35,120 Speaker 3: the behavioral element, which is just making sure you get in. 589 00:30:35,080 --> 00:30:37,520 Speaker 1: The healthy habit is it of investing in that manner. 590 00:30:37,600 --> 00:30:39,800 Speaker 1: I think it's very good. And I must say that 591 00:30:39,800 --> 00:30:42,840 Speaker 1: doesn't mean I do it myself. I do it, of course, 592 00:30:42,920 --> 00:30:45,760 Speaker 1: because I do it in my super, because my super 593 00:30:46,440 --> 00:30:48,920 Speaker 1: was clipped off my salary. So to that extent, the 594 00:30:48,960 --> 00:30:54,560 Speaker 1: contributions are of cost averaging, but the distribution it's human 595 00:30:54,640 --> 00:31:00,320 Speaker 1: to look for the cheap opportunities. But it's quite strong, folks, 596 00:31:00,320 --> 00:31:02,160 Speaker 1: it's really good dollar cost averaging. If you want to 597 00:31:02,200 --> 00:31:04,720 Speaker 1: know more about it, writing and let us know and 598 00:31:04,920 --> 00:31:07,440 Speaker 1: we will have a show on it. Look, it was 599 00:31:07,640 --> 00:31:10,680 Speaker 1: always a strong theory. There was a period when it 600 00:31:10,720 --> 00:31:12,600 Speaker 1: went out of fashion, and it went out of fashion 601 00:31:12,680 --> 00:31:15,440 Speaker 1: during the ghastly period of two o seven to two 602 00:31:15,480 --> 00:31:18,240 Speaker 1: oh nine where the market's felt fifty percent in a 603 00:31:18,280 --> 00:31:21,440 Speaker 1: long slow way over two years, and the unfortunate fund 604 00:31:21,480 --> 00:31:25,360 Speaker 1: managers who stood on stage and propounded on dollar cost averaging, 605 00:31:25,440 --> 00:31:27,080 Speaker 1: they had a bit of answering to do to people 606 00:31:27,120 --> 00:31:29,800 Speaker 1: who said, well, I've been following your idea and the 607 00:31:29,840 --> 00:31:32,600 Speaker 1: market just keeps going down and we'd get periods like 608 00:31:32,640 --> 00:31:34,800 Speaker 1: that again. But his long, we just. 609 00:31:34,760 --> 00:31:36,640 Speaker 2: Brought all the way down. That's awesome. It's better than 610 00:31:36,640 --> 00:31:37,440 Speaker 2: bang all the way up. 611 00:31:38,760 --> 00:31:42,480 Speaker 1: As long as you kept going right, as long as yeah, 612 00:31:42,640 --> 00:31:45,120 Speaker 1: as long as you didn't say, ah out, I'm not 613 00:31:45,200 --> 00:31:47,720 Speaker 1: doing this anymore and you missed the turn. You got 614 00:31:47,720 --> 00:31:49,480 Speaker 1: to keep doing it. You can't fool around with this 615 00:31:49,560 --> 00:31:51,280 Speaker 1: dollar cost averaging. You have to stick to it. It's 616 00:31:51,360 --> 00:31:53,440 Speaker 1: very interesting. Let us know if you want to hear 617 00:31:53,480 --> 00:31:56,040 Speaker 1: more about it. Okay, we're running out of time. Jemmy 618 00:31:56,120 --> 00:31:58,959 Speaker 1: Dale knab trade ahead of investor Behavior. Thank you very 619 00:31:59,040 --> 00:32:00,640 Speaker 1: much for coming on the show. Great to have you. 620 00:32:01,240 --> 00:32:03,200 Speaker 2: Thank you so much. It's always fun. 621 00:32:03,680 --> 00:32:07,200 Speaker 1: It's always fun. Thank you, and let's have some emails, folks. 622 00:32:07,400 --> 00:32:11,760 Speaker 1: The email is the Money Puzzle at the Australian dot 623 00:32:11,800 --> 00:32:13,360 Speaker 1: com dotu talk to you soon.