1 00:00:03,880 --> 00:00:06,120 Speaker 1: Welcome to Ask Fear and Greed, where we take your 2 00:00:06,280 --> 00:00:09,000 Speaker 1: questions and do our very best to answer them. I'm 3 00:00:09,039 --> 00:00:11,560 Speaker 1: Michael Thompson, and good afternoon, Sean Aylmer. 4 00:00:11,880 --> 00:00:14,560 Speaker 2: Good afternoon, Michael, Sean. 5 00:00:14,880 --> 00:00:17,319 Speaker 1: Ask Fear and Greed has made it into its second week. 6 00:00:17,440 --> 00:00:18,480 Speaker 1: I think that's a good sign. 7 00:00:18,720 --> 00:00:21,080 Speaker 2: I think so. Yeah. People are listening. 8 00:00:21,079 --> 00:00:24,200 Speaker 1: I like that, especially when we keep getting good questions 9 00:00:24,400 --> 00:00:26,560 Speaker 1: like this one. We had some great questions last week. 10 00:00:26,840 --> 00:00:29,520 Speaker 1: This one has come in from Locke and he sent 11 00:00:29,560 --> 00:00:31,600 Speaker 1: it in via the website. He went to fearangreed dot 12 00:00:31,640 --> 00:00:33,960 Speaker 1: com dot au sent in his question. You can do 13 00:00:34,000 --> 00:00:36,240 Speaker 1: it through there or through any of the social media platforms. 14 00:00:36,320 --> 00:00:38,319 Speaker 1: We will get them any way you send them to us. 15 00:00:38,640 --> 00:00:43,440 Speaker 1: Lockie says, you guys were discussing the performances of super 16 00:00:43,440 --> 00:00:47,040 Speaker 1: funds on the podcast last week. It got me thinking 17 00:00:47,080 --> 00:00:50,040 Speaker 1: about how the biggest investors into the ASX are super 18 00:00:50,040 --> 00:00:53,760 Speaker 1: funds and basic supply and demand principles. Okay, so far, 19 00:00:53,880 --> 00:00:56,560 Speaker 1: so good. He goes on to say, obviously, we are 20 00:00:56,600 --> 00:00:59,040 Speaker 1: currently in and have been for a long time a 21 00:00:59,160 --> 00:01:03,480 Speaker 1: period where as a nation, we are net super contributors. However, 22 00:01:03,800 --> 00:01:07,920 Speaker 1: as frequently discussed Australia is facing an issue regarding an 23 00:01:07,959 --> 00:01:10,920 Speaker 1: aging population and the issues that come with this. Could 24 00:01:11,000 --> 00:01:15,080 Speaker 1: another potential of an aging population be that as a 25 00:01:15,120 --> 00:01:19,760 Speaker 1: country we become net with drawers from superfunds and thereby 26 00:01:19,959 --> 00:01:23,839 Speaker 1: reducing the demand of the biggest investors in the AX. 27 00:01:24,360 --> 00:01:29,319 Speaker 1: Is their potential for the possibility of a long stagnant 28 00:01:29,360 --> 00:01:34,639 Speaker 1: period for Australian shares as more people retire taking money 29 00:01:34,800 --> 00:01:39,280 Speaker 1: out of their superfunds and therefore the AX. What a question. 30 00:01:40,040 --> 00:01:44,080 Speaker 2: Wow, there's so much to that one. Let's think about that. 31 00:01:44,760 --> 00:01:48,360 Speaker 2: So we have baby boomers retiring and they're built up wealth. 32 00:01:48,360 --> 00:01:50,680 Speaker 2: Now of course they're going to into what they call 33 00:01:50,760 --> 00:01:55,920 Speaker 2: the decumulation phase of retirement savings as in their spending, 34 00:01:55,960 --> 00:01:59,120 Speaker 2: they're not putting money in. There was a report done 35 00:01:59,200 --> 00:02:02,280 Speaker 2: by KPNA into this actually a couple of months ago, 36 00:02:02,880 --> 00:02:05,400 Speaker 2: and what it talked about some of the biggest retail 37 00:02:05,600 --> 00:02:10,320 Speaker 2: super annuation groups like Mercer, Colonial First Aid amp BT, 38 00:02:11,080 --> 00:02:16,280 Speaker 2: they're reporting that outflows of funds. What that really means 39 00:02:16,520 --> 00:02:19,720 Speaker 2: is exactly what Lock he's talking about. People who are 40 00:02:19,880 --> 00:02:23,760 Speaker 2: retired are spending the money, So the money is coming 41 00:02:23,880 --> 00:02:26,920 Speaker 2: out of the funds. Now, what's interesting about it is 42 00:02:26,919 --> 00:02:29,560 Speaker 2: that the retail funds those once I was talking about, 43 00:02:29,880 --> 00:02:32,400 Speaker 2: it's hitting them much more than the industry funds. So 44 00:02:32,520 --> 00:02:35,520 Speaker 2: the industry funds might be unisuper Australian superhest to those 45 00:02:35,560 --> 00:02:38,799 Speaker 2: sorts of groups. What you find with them is that 46 00:02:39,200 --> 00:02:43,080 Speaker 2: the younger people tend to invest in those industry funds, 47 00:02:43,120 --> 00:02:45,440 Speaker 2: older people in the retail funds. So this is an 48 00:02:45,480 --> 00:02:49,760 Speaker 2: issue definitely number one. Number two, it's hitting the retail 49 00:02:49,840 --> 00:02:52,800 Speaker 2: funds more than it's hitting the super funds. A couple 50 00:02:52,840 --> 00:02:55,680 Speaker 2: of things to keep in mind on this, So, Michael, one, 51 00:02:56,040 --> 00:02:58,120 Speaker 2: you don't take all your money out at once. So 52 00:02:58,240 --> 00:03:01,000 Speaker 2: let's say someone's got five hundred thousand save for retirement, 53 00:03:01,000 --> 00:03:04,480 Speaker 2: a million dollars save for retirement. They might go into 54 00:03:04,520 --> 00:03:08,200 Speaker 2: a defined benefit scheme, they might go into an annuity. However, 55 00:03:08,240 --> 00:03:10,880 Speaker 2: they don't take all the money at once. Well mostly 56 00:03:11,160 --> 00:03:13,480 Speaker 2: they don't take all the money at once, So it's 57 00:03:13,480 --> 00:03:15,600 Speaker 2: not like that five hundred thousand or a million dollars 58 00:03:15,639 --> 00:03:19,040 Speaker 2: is coming out of the system. The other thing, we 59 00:03:19,120 --> 00:03:23,160 Speaker 2: all still pay eleven and a half percent superannuation guarantee, 60 00:03:23,480 --> 00:03:26,920 Speaker 2: so that money is still going into the system. So 61 00:03:27,520 --> 00:03:30,040 Speaker 2: what's the net effect of that, Well, with baby boomers, 62 00:03:30,120 --> 00:03:33,120 Speaker 2: there is a hit because the baby boomer cohort is 63 00:03:33,160 --> 00:03:37,400 Speaker 2: so large. But then you think of the cohort of people. 64 00:03:38,240 --> 00:03:40,600 Speaker 2: We need a demographer on this, but born in the 65 00:03:40,720 --> 00:03:43,520 Speaker 2: early noughties, that was a real boom period. 66 00:03:43,640 --> 00:03:43,800 Speaker 1: I know. 67 00:03:43,880 --> 00:03:46,760 Speaker 2: Next, I had a couple of kids in that period. Well, 68 00:03:46,760 --> 00:03:49,400 Speaker 2: they're now contributing to super and they're contributing eleven and 69 00:03:49,400 --> 00:03:52,000 Speaker 2: a half percent, so there's a lot more people there. 70 00:03:52,520 --> 00:03:55,440 Speaker 2: The net effect we won't know for some time, but 71 00:03:55,560 --> 00:03:58,720 Speaker 2: certainly Lucky is right in that there will be withdrawals 72 00:03:58,920 --> 00:04:01,800 Speaker 2: from the supersystem by baby burmers, but they won't be 73 00:04:01,840 --> 00:04:04,600 Speaker 2: doing it all and there'll be a bunch of people 74 00:04:04,720 --> 00:04:06,760 Speaker 2: putting that eleven and a half percent in, which is 75 00:04:06,840 --> 00:04:10,440 Speaker 2: higher than you know, previous was eleven percent started off 76 00:04:10,520 --> 00:04:13,119 Speaker 2: much lower than that, so that will actually prop up 77 00:04:13,400 --> 00:04:14,520 Speaker 2: money into the ASEX. 78 00:04:14,840 --> 00:04:16,520 Speaker 1: And of course then so that's eleven and a half 79 00:04:16,600 --> 00:04:18,119 Speaker 1: at the moment, and then it goes to twelve percent 80 00:04:18,160 --> 00:04:20,080 Speaker 1: I think from next year as well, so there is 81 00:04:20,279 --> 00:04:24,839 Speaker 1: kind of increased amounts going in into the future. And also, Sean, 82 00:04:24,920 --> 00:04:27,080 Speaker 1: is it actually this is high risk stuff. When I 83 00:04:27,120 --> 00:04:30,000 Speaker 1: start kind of contributing to the conversation and asking my 84 00:04:30,080 --> 00:04:30,680 Speaker 1: own questions. 85 00:04:30,720 --> 00:04:32,159 Speaker 2: Now now go for I want to hear it. 86 00:04:32,240 --> 00:04:35,400 Speaker 1: Does immigration and population growth have an impact on this, 87 00:04:35,440 --> 00:04:38,480 Speaker 1: because obviously we've just had a significant spike in the 88 00:04:38,560 --> 00:04:41,440 Speaker 1: number of people coming to Australia And I'm making a 89 00:04:41,440 --> 00:04:43,920 Speaker 1: lot of assumptions here, Sean, but I'm assuming that a 90 00:04:43,960 --> 00:04:46,719 Speaker 1: lot of those would be kind of working age people 91 00:04:46,760 --> 00:04:50,440 Speaker 1: as opposed to retirement age, so that they are if 92 00:04:50,600 --> 00:04:54,279 Speaker 1: Locke's part of Lockey's question was about the aging population 93 00:04:54,400 --> 00:04:57,160 Speaker 1: and a lot of people moving out of the workforce, 94 00:04:57,760 --> 00:04:59,640 Speaker 1: and yet we are now having a lot more younger 95 00:04:59,640 --> 00:05:03,440 Speaker 1: people coming here to work. See the confidence which I said, 96 00:05:03,480 --> 00:05:06,280 Speaker 1: they liked it. You could tell by my voice rising 97 00:05:06,360 --> 00:05:06,919 Speaker 1: towards the end. 98 00:05:07,000 --> 00:05:11,120 Speaker 2: Yeah, the average age, So the average age would be younger. 99 00:05:11,640 --> 00:05:14,120 Speaker 2: I think you're right there. I do remember some time 100 00:05:14,120 --> 00:05:16,440 Speaker 2: ago the ABS putting something down. I'm sure it's the 101 00:05:16,520 --> 00:05:19,440 Speaker 2: mid twenties is when you're spaced to get the peak 102 00:05:19,800 --> 00:05:23,480 Speaker 2: of the baby boomers retiring. And so if if that's 103 00:05:23,520 --> 00:05:26,279 Speaker 2: the case, and put that next to this big jump 104 00:05:26,400 --> 00:05:29,360 Speaker 2: in net migration that we've seen in the past couple 105 00:05:29,400 --> 00:05:32,839 Speaker 2: of years, that will certainly the net migration will certainly 106 00:05:32,880 --> 00:05:36,680 Speaker 2: help offset the problem that Locke's describing in terms of 107 00:05:36,800 --> 00:05:39,279 Speaker 2: the baby boomers retiring and taking money away from the. 108 00:05:39,279 --> 00:05:44,320 Speaker 1: AX and interestingly the ABS. The Bureau of Statistics said, 109 00:05:44,360 --> 00:05:47,000 Speaker 1: and I think this is from the most recent census 110 00:05:47,040 --> 00:05:50,560 Speaker 1: data that the median age of permanent migrants to Australia 111 00:05:50,640 --> 00:05:54,120 Speaker 1: is thirty seven years old. So those are people with 112 00:05:54,600 --> 00:05:56,599 Speaker 1: quite a long working career ahead of them. 113 00:05:56,760 --> 00:05:58,760 Speaker 2: Yeah. Yeah, cracking question, Lockie. 114 00:05:58,760 --> 00:06:01,359 Speaker 1: You've got us talking about it. It is great. And 115 00:06:01,520 --> 00:06:03,760 Speaker 1: you even got me contributing with things that may in 116 00:06:03,760 --> 00:06:06,240 Speaker 1: fact not be relevant Lockie. So I think that's you 117 00:06:06,279 --> 00:06:07,520 Speaker 1: get bonus points just for that. 118 00:06:08,880 --> 00:06:09,640 Speaker 2: Indeed you do. 119 00:06:10,440 --> 00:06:13,359 Speaker 1: All right, Thank you very much, LOCKI for your question. Remember, 120 00:06:13,400 --> 00:06:15,200 Speaker 1: if you've got something that you would like to know, 121 00:06:15,240 --> 00:06:17,360 Speaker 1: if you'd like Sean to answer one of your questions, 122 00:06:17,400 --> 00:06:20,440 Speaker 1: and if you'd like me to contribute, perhaps nonsensically, then 123 00:06:20,480 --> 00:06:24,919 Speaker 1: send it through via LinkedIn, Instagram, Facebook, or at Fearangreed 124 00:06:24,960 --> 00:06:28,039 Speaker 1: dot com dot au. Thank you very much, Sean, Thank you. 125 00:06:28,080 --> 00:06:28,440 Speaker 2: Michael. 126 00:06:28,800 --> 00:06:31,239 Speaker 1: I'm Michael Thompson and this is ask Fear and Greed.