1 00:00:04,140 --> 00:00:06,420 Sean Aylmer: Welcome to the Fear and Greed Daily Interview. I'm Sean 2 00:00:06,420 --> 00:00:08,879 Sean Aylmer: Aylmer. The last six months might have seen plenty of 3 00:00:08,880 --> 00:00:11,760 Sean Aylmer: volatility on share markets, but it seems that investors are 4 00:00:11,760 --> 00:00:14,490 Sean Aylmer: still opting for equities as a key part of their 5 00:00:14,490 --> 00:00:17,760 Sean Aylmer: portfolio, however, choppy markets have caused them to adjust their 6 00:00:17,760 --> 00:00:21,600 Sean Aylmer: approach a little. The HSBC Investor Insight Survey has been 7 00:00:21,600 --> 00:00:24,780 Sean Aylmer: released, revealing how investors have handled the last six months 8 00:00:25,020 --> 00:00:26,550 Sean Aylmer: and what they plan to do in the next six. 9 00:00:26,820 --> 00:00:29,730 Sean Aylmer: Remember, this is general advice only and you should seek 10 00:00:29,730 --> 00:00:33,750 Sean Aylmer: professional advice before making any investment decisions. Donahue D'Souza is 11 00:00:33,750 --> 00:00:36,300 Sean Aylmer: the Head of Investments at HSBC. Don, welcome back to 12 00:00:36,330 --> 00:00:36,990 Sean Aylmer: Fear and Greed. 13 00:00:37,260 --> 00:00:37,980 Donahue D'Souza: Thank you for having me. 14 00:00:38,159 --> 00:00:41,010 Sean Aylmer: So, outside of super, equities continues to be the main 15 00:00:41,010 --> 00:00:43,920 Sean Aylmer: attraction for investors, or so it seems, and it seems 16 00:00:43,920 --> 00:00:47,370 Sean Aylmer: the volatility over the last six months hasn't resulted in 17 00:00:47,370 --> 00:00:49,950 Sean Aylmer: them sitting on the sidelines. They're certainly still buying. 18 00:00:50,580 --> 00:00:53,070 Donahue D'Souza: Yeah, that's right, Sean. Thank you again for having me. 19 00:00:53,250 --> 00:00:57,630 Donahue D'Souza: So out of the 1, 100 Australian surveyed, despite the market volatility, 20 00:00:57,630 --> 00:01:01,890 Donahue D'Souza: Australian investors still looking to share and equity markets in 21 00:01:01,890 --> 00:01:06,149 Donahue D'Souza: order to continue to generate wealth. 80% of the respondents 22 00:01:06,180 --> 00:01:09,600 Donahue D'Souza: indicated that they had made investments in the last six 23 00:01:09,600 --> 00:01:13,830 Donahue D'Souza: months, but about three- quarters of investors acknowledged that they 24 00:01:13,830 --> 00:01:16,979 Donahue D'Souza: had changed their investment approach in the last six months, 25 00:01:16,980 --> 00:01:20,160 Donahue D'Souza: with about a third of them adopting a more balanced 26 00:01:20,160 --> 00:01:24,330 Donahue D'Souza: portfolio. Just under a third went more conservative, and believe 27 00:01:24,330 --> 00:01:27,750 Donahue D'Souza: it or not, there was nearly 10% that actually adopted 28 00:01:27,750 --> 00:01:32,280 Donahue D'Souza: a more aggressive stance, no doubt picking up some oversold 29 00:01:32,459 --> 00:01:36,420 Donahue D'Souza: sectors. 60% of the respondents also indicated that they were 30 00:01:36,420 --> 00:01:41,789 Donahue D'Souza: likely to further diversify their portfolio in the next six 31 00:01:41,790 --> 00:01:45,090 Donahue D'Souza: months, and about half of all of the respondents are 32 00:01:45,090 --> 00:01:49,500 Donahue D'Souza: considering investing outside of Australia in the next six months. 33 00:01:49,770 --> 00:01:52,500 Donahue D'Souza: And about the same, half of the respondents said that 34 00:01:52,500 --> 00:01:56,700 Donahue D'Souza: they preferred to invest in ETFs and managed funds rather 35 00:01:56,700 --> 00:01:59,700 Donahue D'Souza: than direct equities because it required less time and effort. 36 00:02:00,750 --> 00:02:03,450 Sean Aylmer: Okay, so it suggests people are thinking a little bit 37 00:02:03,540 --> 00:02:07,650 Sean Aylmer: differently about investing, but I must say, if you're not 38 00:02:07,650 --> 00:02:10,020 Sean Aylmer: a professional investor, if you're a retail investor, a mom 39 00:02:10,020 --> 00:02:13,859 Sean Aylmer: and dad, sometimes it's actually easier to buy than sell. 40 00:02:13,919 --> 00:02:14,790 Sean Aylmer: Would you agree? 41 00:02:15,120 --> 00:02:18,810 Donahue D'Souza: I think the way in which investors interact with markets 42 00:02:18,810 --> 00:02:22,440 Donahue D'Souza: now, and certainly the advent of online brokerage platforms and 43 00:02:22,440 --> 00:02:27,240 Donahue D'Souza: also the innovation in certain products has made transactions a 44 00:02:27,240 --> 00:02:31,679 Donahue D'Souza: little bit easier. Certainly, we're seeing that investors are choosing exchange- 45 00:02:31,680 --> 00:02:35,579 Donahue D'Souza: traded funds and managed funds rather than direct equities, because 46 00:02:36,300 --> 00:02:39,120 Donahue D'Souza: in a lot of ways it does require less time 47 00:02:39,180 --> 00:02:43,739 Donahue D'Souza: and effort, and certainly that response polled very, very strongly 48 00:02:43,740 --> 00:02:45,840 Donahue D'Souza: amongst that millennial investor segment. 49 00:02:46,560 --> 00:02:49,110 Sean Aylmer: Okay, so just tell me about the generational differences. What 50 00:02:49,110 --> 00:02:51,510 Sean Aylmer: are the millennials doing that the rest of us aren't? 51 00:02:51,930 --> 00:02:55,320 Donahue D'Souza: In most of the categories of the survey, it wasn't 52 00:02:55,320 --> 00:02:59,370 Donahue D'Souza: really statistically significant, but there are certainly a few areas 53 00:02:59,370 --> 00:03:03,690 Donahue D'Souza: to call out. For example, 80% of the respondents who 54 00:03:03,810 --> 00:03:07,080 Donahue D'Souza: said that they had monitored and tracked their investments at 55 00:03:07,080 --> 00:03:10,590 Donahue D'Souza: least once a month. That was the older investors. The 56 00:03:10,590 --> 00:03:14,430 Donahue D'Souza: younger investors basically polled that they were more likely to 57 00:03:14,430 --> 00:03:18,600 Donahue D'Souza: monitor their investments more frequently, at least weekly or daily. 58 00:03:18,960 --> 00:03:22,410 Donahue D'Souza: If we actually break that down by gender, again, men 59 00:03:22,470 --> 00:03:25,650 Donahue D'Souza: were more likely to track their investment more than once 60 00:03:25,650 --> 00:03:28,829 Donahue D'Souza: a week in that older segment, but amongst the millennial 61 00:03:28,830 --> 00:03:32,430 Donahue D'Souza: group, it was the female millennial investor who was more 62 00:03:32,430 --> 00:03:36,270 Donahue D'Souza: likely to monitor their investments daily. If we actually look 63 00:03:36,270 --> 00:03:39,420 Donahue D'Souza: at transacting and making investments, again, it was the younger 64 00:03:39,420 --> 00:03:43,050 Donahue D'Souza: Aussie investors, Gen Z and the millennials, who were more 65 00:03:43,050 --> 00:03:47,880 Donahue D'Souza: likely to invest more frequently than the older generation, although 66 00:03:48,120 --> 00:03:51,150 Donahue D'Souza: Gen X wasn't too far behind. And again, if we 67 00:03:51,150 --> 00:03:53,640 Donahue D'Souza: look at that millennial segment, again, it was the millennial 68 00:03:53,640 --> 00:03:57,720 Donahue D'Souza: female investors twice as likely as their male counterparts to 69 00:03:57,720 --> 00:03:58,950 Donahue D'Souza: make investments daily. 70 00:03:59,370 --> 00:04:01,350 Sean Aylmer: Wow. Do you have any idea why, Don? I mean, 71 00:04:01,890 --> 00:04:06,510 Sean Aylmer: I know you're an investment expert and markets is your 72 00:04:06,510 --> 00:04:09,450 Sean Aylmer: expertise, but shifting to psychology just for a moment, I 73 00:04:09,450 --> 00:04:10,500 Sean Aylmer: wonder why that's the case. 74 00:04:10,920 --> 00:04:14,940 Donahue D'Souza: Well, I think millennial female investors perhaps, I mean, this 75 00:04:14,940 --> 00:04:18,420 Donahue D'Souza: also got brought out in another segment of the survey 76 00:04:18,420 --> 00:04:22,650 Donahue D'Souza: just in terms of the availability of education and also 77 00:04:22,650 --> 00:04:26,400 Donahue D'Souza: knowledge transfer I guess from the older generation, but it's 78 00:04:26,400 --> 00:04:30,239 Donahue D'Souza: also where they get their information sources. So I think 79 00:04:30,240 --> 00:04:33,839 Donahue D'Souza: one of the alarming statistics is the number of respondents 80 00:04:33,839 --> 00:04:37,560 Donahue D'Souza: that have relied on social media to get their information. 81 00:04:37,680 --> 00:04:39,600 Sean Aylmer: Tell me about that. I'm scared of this one. 82 00:04:40,380 --> 00:04:44,099 Donahue D'Souza: Yeah. So, interesting part of that survey is certainly, look, 83 00:04:44,100 --> 00:04:46,500 Donahue D'Souza: I mean I do acknowledge that the way in which 84 00:04:46,560 --> 00:04:50,219 Donahue D'Souza: investors and consumers as a whole engage with financial institutions 85 00:04:50,220 --> 00:04:54,359 Donahue D'Souza: and the organizations, obviously the financial institutions and organizations have 86 00:04:54,360 --> 00:04:57,299 Donahue D'Souza: had to evolve too, to make sure that they're well 87 00:04:57,300 --> 00:05:00,210 Donahue D'Souza: placed in social media. But there is a lot of 88 00:05:00,450 --> 00:05:04,140 Donahue D'Souza: information out there. I do find that the information on 89 00:05:04,140 --> 00:05:06,989 Donahue D'Souza: social media is a lot more condensed, bite- sized. You've 90 00:05:07,020 --> 00:05:09,839 Donahue D'Souza: even got indicators to tell you how long the read 91 00:05:09,839 --> 00:05:13,110 Donahue D'Souza: is going to take. And look, we are all time 92 00:05:13,110 --> 00:05:17,310 Donahue D'Souza: poor. Social media posts manage this well, and there's always 93 00:05:17,370 --> 00:05:21,420 Donahue D'Souza: options there to read the larger report. However, it's really 94 00:05:21,420 --> 00:05:24,839 Donahue D'Souza: important for investors if they're sifting through social media, that 95 00:05:24,839 --> 00:05:27,990 Donahue D'Souza: they are turning to credible and trusted sources. Most of 96 00:05:28,080 --> 00:05:32,370 Donahue D'Souza: the banks, even governments and financial planners, advisors, fund managers, 97 00:05:32,550 --> 00:05:35,010 Donahue D'Souza: they all have a social media presence, so it's important 98 00:05:35,010 --> 00:05:37,289 Donahue D'Souza: to go to the more trusted sites. 99 00:05:38,130 --> 00:05:40,200 Sean Aylmer: Yeah, and this is a good time to remind listeners, 100 00:05:40,950 --> 00:05:44,100 Sean Aylmer: you need to seek professional advice. Don is an expert, 101 00:05:44,250 --> 00:05:46,289 Sean Aylmer: but when you are investing, it is your own money, 102 00:05:46,560 --> 00:05:49,350 Sean Aylmer: it's stuff you've worked for and it really is important, 103 00:05:49,410 --> 00:05:51,900 Sean Aylmer: would you agree, Don, to get professional advice? 104 00:05:52,560 --> 00:05:56,310 Donahue D'Souza: Oh, absolutely. Particularly in the current prevailing conditions. So yes, 105 00:05:56,610 --> 00:05:58,529 Donahue D'Souza: we've talked a lot of stats, we've talked a lot 106 00:05:58,529 --> 00:06:01,020 Donahue D'Souza: about what the different generations are doing and what different 107 00:06:01,020 --> 00:06:03,600 Donahue D'Souza: genders are doing. We've also talked that there was a 108 00:06:03,600 --> 00:06:07,620 Donahue D'Souza: strong interest in looking at offshore equities and also looking 109 00:06:07,620 --> 00:06:11,400 Donahue D'Souza: at ETFs and managed funds. But even that, it comes 110 00:06:11,580 --> 00:06:14,100 Donahue D'Souza: right back down to your investment plan. So make sure 111 00:06:14,100 --> 00:06:17,370 Donahue D'Souza: that the investments you choose are fit for purpose, that 112 00:06:17,370 --> 00:06:21,029 Donahue D'Souza: is that they meet your objectives and financial needs, that 113 00:06:21,029 --> 00:06:25,260 Donahue D'Souza: they fit into your risk tolerance. And where possible, if 114 00:06:25,260 --> 00:06:28,950 Donahue D'Souza: you're not sure, please seek professional financial advice. 115 00:06:29,130 --> 00:06:30,810 Sean Aylmer: Stay with me, Don. We'll be back in a minute. 116 00:06:37,200 --> 00:06:40,799 Sean Aylmer: I'm speaking to Don D'Souza, Head of Investments at HSBC. 117 00:06:41,400 --> 00:06:43,500 Sean Aylmer: So we've talked a little bit here about ETFs and 118 00:06:43,500 --> 00:06:46,650 Sean Aylmer: managed funds, certainly from my point of view, when I'm 119 00:06:46,650 --> 00:06:50,039 Sean Aylmer: not actively managing my portfolio I like those sorts of 120 00:06:50,040 --> 00:06:52,140 Sean Aylmer: things, because I'm getting an expert to do it for 121 00:06:52,140 --> 00:06:56,130 Sean Aylmer: me effectively. What about international shares? You said people wanted 122 00:06:56,130 --> 00:07:00,120 Sean Aylmer: to buy international shares, do they tend to be the 123 00:07:00,180 --> 00:07:03,839 Sean Aylmer: big high profile, the Apples, the Teslas, the Microsofts of 124 00:07:03,839 --> 00:07:04,290 Sean Aylmer: the world? 125 00:07:04,920 --> 00:07:08,250 Donahue D'Souza: Well, certainly there is an attraction and some prestige of 126 00:07:08,790 --> 00:07:12,060 Donahue D'Souza: saying that you own equity in those companies. But the 127 00:07:12,060 --> 00:07:14,940 Donahue D'Souza: interesting part of this finding was that even though a 128 00:07:14,940 --> 00:07:19,440 Donahue D'Souza: strong population had indicated, over 50% of respondents, that they 129 00:07:19,440 --> 00:07:22,980 Donahue D'Souza: were looking to invest outside of Australia, about half of 130 00:07:22,980 --> 00:07:26,970 Donahue D'Souza: those respondents actually didn't know or were unsure on how 131 00:07:26,970 --> 00:07:31,170 Donahue D'Souza: to invest outside of Australia. Now again, if we break 132 00:07:31,170 --> 00:07:35,430 Donahue D'Souza: that down by gender, fairly or unfairly, female investors polled 133 00:07:35,670 --> 00:07:38,940 Donahue D'Souza: higher that they were unsure then their male counterparts. And 134 00:07:38,940 --> 00:07:42,120 Donahue D'Souza: again, if we break that down by generation, again, it 135 00:07:42,120 --> 00:07:44,160 Donahue D'Souza: was the millennials leading the way, who had the most 136 00:07:44,160 --> 00:07:47,880 Donahue D'Souza: idea of how to invest overseas. And what it points 137 00:07:47,880 --> 00:07:49,950 Donahue D'Souza: out to us, certainly there's a lot more work that 138 00:07:49,950 --> 00:07:52,320 Donahue D'Souza: needs to be done by the industry as a whole 139 00:07:52,320 --> 00:07:55,740 Donahue D'Souza: as far as education is concerned. And as I mentioned 140 00:07:55,740 --> 00:07:58,920 Donahue D'Souza: before, investing overseas may not be right for you. It 141 00:07:58,920 --> 00:08:01,890 Donahue D'Souza: might not fit into your financial needs and objectives and 142 00:08:01,890 --> 00:08:05,520 Donahue D'Souza: risk profile. And I think the dislocation might be that 143 00:08:05,700 --> 00:08:09,150 Donahue D'Souza: some investors think that they need to invest directly overseas, 144 00:08:09,150 --> 00:08:14,070 Donahue D'Souza: but they can actually access all of those sectors, geographies, 145 00:08:14,070 --> 00:08:18,210 Donahue D'Souza: and industries with active and passive funds that are listed 146 00:08:18,210 --> 00:08:20,460 Donahue D'Souza: here on the Australian exchanges. 147 00:08:21,540 --> 00:08:23,370 Sean Aylmer: Okay, so if we were going to come down for 148 00:08:23,370 --> 00:08:26,280 Sean Aylmer: two or three rules for an investor, so my son, 149 00:08:26,280 --> 00:08:28,800 Sean Aylmer: for example, has just started investing. He kind of tries 150 00:08:28,800 --> 00:08:32,250 Sean Aylmer: to put $ 500 a month into an equity, he's very 151 00:08:32,250 --> 00:08:34,320 Sean Aylmer: young and the whole idea is that he thinks about 152 00:08:34,320 --> 00:08:36,750 Sean Aylmer: it, and that's not huge amounts of money, I appreciate 153 00:08:36,750 --> 00:08:39,120 Sean Aylmer: that, but at the age of 20, doing that once a 154 00:08:39,120 --> 00:08:41,040 Sean Aylmer: month is probably not a bad habit to get into. 155 00:08:42,030 --> 00:08:44,099 Sean Aylmer: What is it about? It's about having a plan first? 156 00:08:45,090 --> 00:08:48,240 Donahue D'Souza: Yeah, that's a great summary, Sean. It is about having 157 00:08:48,240 --> 00:08:52,590 Donahue D'Souza: a plan, identifying what the end objective is, identifying the 158 00:08:52,590 --> 00:08:55,679 Donahue D'Souza: investment horizon, and then how much risk you're prepared to 159 00:08:55,679 --> 00:08:58,770 Donahue D'Souza: take between now and the end of the time horizon. 160 00:08:58,770 --> 00:09:02,760 Donahue D'Souza: Now, obviously your son, very young, very long investment timeframe, 161 00:09:02,760 --> 00:09:07,230 Donahue D'Souza: so he could probably adopt a more aggressive approach, and 162 00:09:07,290 --> 00:09:10,109 Donahue D'Souza: perhaps because he's got such a long investment horizon, can 163 00:09:10,110 --> 00:09:13,830 Donahue D'Souza: probably ride out all of that volatility. Now, it's interesting that 164 00:09:13,830 --> 00:09:18,120 Donahue D'Souza: you mentioned that investors now, similar to your son, because 165 00:09:18,120 --> 00:09:21,300 Donahue D'Souza: of the market volatility, they're avoiding the all- in approach. 166 00:09:21,750 --> 00:09:24,480 Donahue D'Souza: So what they're doing is they're putting in a small 167 00:09:24,480 --> 00:09:29,970 Donahue D'Souza: amount initially and then gradually investing small amounts over time, 168 00:09:29,970 --> 00:09:33,689 Donahue D'Souza: almost like dollar- cost averaging, and obviously, in periods where 169 00:09:33,690 --> 00:09:35,520 Donahue D'Souza: there's a massive sell- off, they might go a little 170 00:09:35,520 --> 00:09:39,120 Donahue D'Souza: bit harder to top up their units. So dropping in 171 00:09:39,120 --> 00:09:42,300 Donahue D'Souza: small investment amounts, particularly in this volatile period, and averaging 172 00:09:42,300 --> 00:09:44,609 Donahue D'Souza: down your price might seem like a good idea at 173 00:09:44,610 --> 00:09:45,000 Donahue D'Souza: the time. 174 00:09:45,840 --> 00:09:48,870 Sean Aylmer: One final question. What do you think, this is kind 175 00:09:48,870 --> 00:09:51,510 Sean Aylmer: of going back to the whole concept of social media 176 00:09:51,510 --> 00:09:56,850 Sean Aylmer: and millennials getting involved, the idea of finfluencers and whether regulators 177 00:09:56,850 --> 00:09:59,490 Sean Aylmer: are going to get more involved, do you think, on 178 00:09:59,490 --> 00:10:04,770 Sean Aylmer: somehow managing the market so that consumers don't make mistakes? 179 00:10:05,010 --> 00:10:08,640 Sean Aylmer: Inevitably they will, but at least somehow trying to have 180 00:10:08,640 --> 00:10:10,350 Sean Aylmer: some parameters around those mistakes. 181 00:10:11,340 --> 00:10:13,770 Donahue D'Souza: Yeah, certainly. I think it's a good thing. It's a 182 00:10:13,770 --> 00:10:16,800 Donahue D'Souza: little bit of the Wild West out there in terms 183 00:10:16,800 --> 00:10:19,620 Donahue D'Souza: of social media land, and I come back to my 184 00:10:19,620 --> 00:10:22,890 Donahue D'Souza: earlier point, yes, we are all time poor, and yes, 185 00:10:22,890 --> 00:10:25,949 Donahue D'Souza: there's a lot of social media, it can get quite 186 00:10:25,950 --> 00:10:29,429 Donahue D'Souza: noisy, and trying to cut through all of that to find 187 00:10:29,429 --> 00:10:34,559 Donahue D'Souza: through trusted sources is of incredible importance. Otherwise, you do 188 00:10:34,559 --> 00:10:38,340 Donahue D'Souza: get drowned out, you do have that analysis paralysis type 189 00:10:38,340 --> 00:10:42,270 Donahue D'Souza: of mantra. And you don't know what the underlying motives 190 00:10:42,270 --> 00:10:45,420 Donahue D'Souza: of some of the influences are, so I'm glad that there is 191 00:10:45,420 --> 00:10:49,260 Donahue D'Souza: attention that's being paid to some of the rogue posts and finfluencers. 192 00:10:50,700 --> 00:10:52,470 Sean Aylmer: Don, thank you for talking to Fear and Greed. 193 00:10:52,740 --> 00:10:53,340 Donahue D'Souza: Thank you, Sean. 194 00:10:53,970 --> 00:10:57,840 Sean Aylmer: That was Donahue D'Souza, Head of Investments at HSBC. This 195 00:10:57,840 --> 00:11:00,090 Sean Aylmer: is the Fear and Greed Daily Interview. Remember, as we 196 00:11:00,090 --> 00:11:02,670 Sean Aylmer: mentioned a moment ago, this information is general in nature 197 00:11:02,670 --> 00:11:05,790 Sean Aylmer: and you should seek professional advice before making any investment 198 00:11:05,790 --> 00:11:08,370 Sean Aylmer: decisions. Join us every morning for the full episode of 199 00:11:08,370 --> 00:11:11,550 Sean Aylmer: Fear and Greed, Australia's most popular business podcast. I'm Sean 200 00:11:11,550 --> 00:11:12,900 Sean Aylmer: Aylmer. Enjoy your day.