1 00:00:00,000 --> 00:00:02,320 Speaker 1: This is a C. N. A. Podcast 2 00:00:04,000 --> 00:00:06,059 Speaker 2: Christopher in a few hours. Can you give us your 3 00:00:06,059 --> 00:00:11,000 Speaker 2: thoughts on the following 2023 investment outlook, bad for the 4 00:00:11,000 --> 00:00:15,800 Speaker 2: first nine months, good thereafter bonds, bonds will be boring, 5 00:00:15,810 --> 00:00:23,520 Speaker 2: ideal portfolio in 2023 dividend stocks, real estate investment, trust stocks, stocks, 6 00:00:23,530 --> 00:00:27,080 Speaker 2: bad for the first nine months. You'll be good thereafter. 7 00:00:27,090 --> 00:00:28,770 Speaker 2: All right, thank you. 8 00:00:42,440 --> 00:00:45,770 Speaker 2: Hello and welcome back to money talks. I'm Sarah al Khaldi. 9 00:00:45,940 --> 00:00:48,970 Speaker 2: I hope you've had a great break where kick starting 10 00:00:48,979 --> 00:00:54,110 Speaker 2: 2023 many of us are probably making new year resolutions, 11 00:00:54,120 --> 00:00:59,280 Speaker 2: whether it's personal family or career goals on the money front. 12 00:00:59,290 --> 00:01:02,230 Speaker 2: It's always good to do a stock take and figure 13 00:01:02,230 --> 00:01:06,150 Speaker 2: out your money goals for the year, your investment strategy. 14 00:01:06,160 --> 00:01:08,820 Speaker 2: And if there are any milestones you're looking to hit 15 00:01:09,120 --> 00:01:12,580 Speaker 2: to give us an investment outlook for 2023. I have 16 00:01:12,580 --> 00:01:15,470 Speaker 2: with me Christopher on a trainer at dr wealth who 17 00:01:15,470 --> 00:01:19,660 Speaker 2: teaches the early retirement masterclass Christopher, Thanks so much for 18 00:01:19,660 --> 00:01:22,260 Speaker 2: joining us here on money dot You're welcome 19 00:01:22,860 --> 00:01:26,020 Speaker 2: Christopher. And I've seen a lot of reports that called 20 00:01:26,020 --> 00:01:31,800 Speaker 2: 2022 a dreadful year for investors. We saw high inflation. 21 00:01:31,810 --> 00:01:36,970 Speaker 2: There's the war in Ukraine. We also saw stock markets 22 00:01:36,970 --> 00:01:40,800 Speaker 2: tumble and it's not just stocks. Cryptocurrencies as well, really 23 00:01:40,800 --> 00:01:44,220 Speaker 2: took a beating. So how would you describe investing in 24 00:01:44,220 --> 00:01:44,810 Speaker 2: 2020 25 00:01:44,825 --> 00:01:49,475 Speaker 2: 2022? For me has been an absolute disaster. And then 26 00:01:49,475 --> 00:01:52,175 Speaker 2: there is really no other way of looking at it 27 00:01:52,185 --> 00:01:56,155 Speaker 2: ever since the Russians invaded Ukraine dealing with high inflation 28 00:01:56,155 --> 00:01:58,835 Speaker 2: and the fact has begun raising interest rates and this 29 00:01:58,835 --> 00:02:01,675 Speaker 2: has affected my area of investing, which is focused on 30 00:02:01,685 --> 00:02:02,400 Speaker 2: evidence 31 00:02:02,880 --> 00:02:06,930 Speaker 2: And you're looking at dividend stocks tumbling, a significant amount 32 00:02:06,930 --> 00:02:09,690 Speaker 2: of value that's in tandem with what's happening in the 33 00:02:09,690 --> 00:02:12,919 Speaker 2: bond market as well. So for lack of a better term, 34 00:02:12,919 --> 00:02:14,679 Speaker 2: it's a year that I think many of us would 35 00:02:14,680 --> 00:02:18,300 Speaker 2: like to forget and we're hoping to see a better 20-3. 36 00:02:18,310 --> 00:02:21,770 Speaker 2: It was really terrible. But before we go to 37 00:02:21,970 --> 00:02:25,230 Speaker 2: how we should invest in the year ahead, you've been 38 00:02:25,230 --> 00:02:30,940 Speaker 2: through several market downturns yourself. How would 2020 to compare? 39 00:02:30,950 --> 00:02:36,169 Speaker 2: 2022 is relatively mao I've experienced a really bad episode 40 00:02:36,169 --> 00:02:40,760 Speaker 2: in the year 2007 to 2008. Great recession, but fortunately 41 00:02:40,760 --> 00:02:43,060 Speaker 2: I was able to farm my paycheck 42 00:02:43,389 --> 00:02:45,790 Speaker 2: Into the stock markets or the markets were tumbling. That 43 00:02:45,790 --> 00:02:49,100 Speaker 2: was a very stressful situation. But the reward was that 44 00:02:49,110 --> 00:02:51,950 Speaker 2: in 2009, when the markets recovered, I've made a tidy 45 00:02:51,950 --> 00:02:52,470 Speaker 2: sum 46 00:02:53,030 --> 00:02:56,160 Speaker 2: In the year 20-0 in the beginning of the pandemic. 47 00:02:56,169 --> 00:02:58,530 Speaker 2: I tried to do the same thing and this time 48 00:02:58,530 --> 00:03:01,180 Speaker 2: with a little bit of market leverage and margin account. 49 00:03:01,190 --> 00:03:04,440 Speaker 2: The recovery was a V-shaped recovery. So we were able 50 00:03:04,440 --> 00:03:07,530 Speaker 2: to make a decent amount of money as well this 51 00:03:07,530 --> 00:03:08,829 Speaker 2: time round. 52 00:03:09,440 --> 00:03:12,850 Speaker 2: I don't really expect the V shape recovery. I think 53 00:03:12,850 --> 00:03:16,110 Speaker 2: the situation is going to be significantly different. It will 54 00:03:16,110 --> 00:03:18,900 Speaker 2: be mounted in 2008, but you're not going to get 55 00:03:18,900 --> 00:03:21,940 Speaker 2: a recovery as quickly as 2020. So you mean the 56 00:03:21,940 --> 00:03:25,919 Speaker 2: recovery won't be fast. We could have a long or 57 00:03:25,919 --> 00:03:30,730 Speaker 2: extended period of troubling times. That's right now. The reason 58 00:03:30,730 --> 00:03:34,940 Speaker 2: is because while we are aware of the number of 59 00:03:34,940 --> 00:03:37,580 Speaker 2: basis points that fat is raising interest rates, 60 00:03:38,320 --> 00:03:40,470 Speaker 2: We are not really aware of when the endpoint is 61 00:03:40,470 --> 00:03:42,720 Speaker 2: going to be. So if you read a lot of 62 00:03:42,720 --> 00:03:45,550 Speaker 2: these analyst reports, they're expected to be at Q2 or 63 00:03:45,550 --> 00:03:49,840 Speaker 2: Q3 of 2023. So that's at least another 6 to 64 00:03:49,840 --> 00:03:53,380 Speaker 2: 9 months of pain ahead of us. Now on top 65 00:03:53,380 --> 00:03:55,600 Speaker 2: of it, we do not know how long these high 66 00:03:55,600 --> 00:03:58,180 Speaker 2: interest rates is going to be maintained. I don't think 67 00:03:58,190 --> 00:04:00,000 Speaker 2: the fat has an answer as well. 68 00:04:00,450 --> 00:04:03,619 Speaker 2: So the way I see it, we have to be 69 00:04:03,620 --> 00:04:07,910 Speaker 2: prepared to lose three quarters of 2023 and you should 70 00:04:07,910 --> 00:04:10,310 Speaker 2: be ready for tough times ahead. 71 00:04:10,700 --> 00:04:13,270 Speaker 2: But the good news is you've got an extended ninth 72 00:04:13,270 --> 00:04:16,250 Speaker 2: month period for bargain hunting. That is something which I 73 00:04:16,250 --> 00:04:20,160 Speaker 2: think a lot of investors should look forward to. Can 74 00:04:20,160 --> 00:04:24,140 Speaker 2: you explain this bargain hunting that you mentioned? What should 75 00:04:24,140 --> 00:04:27,800 Speaker 2: investors do if the next 6 to 9 months are 76 00:04:27,800 --> 00:04:31,010 Speaker 2: going to be terrible for the markets. Okay. There should 77 00:04:31,010 --> 00:04:34,529 Speaker 2: be 1/4 pronged strategy to actually invest for the next 78 00:04:34,529 --> 00:04:35,239 Speaker 2: nine months, 79 00:04:35,650 --> 00:04:40,080 Speaker 2: the first prong would be banks because banks would experience 80 00:04:40,080 --> 00:04:43,800 Speaker 2: net interest margins increase when interest rates go up. So 81 00:04:43,810 --> 00:04:46,460 Speaker 2: these are extremely safe investments to go into as interest 82 00:04:46,460 --> 00:04:48,609 Speaker 2: rates get raised. So that's the first problem. 83 00:04:48,800 --> 00:04:51,390 Speaker 2: The second problem would be along the lines of looking 84 00:04:51,390 --> 00:04:55,270 Speaker 2: at very better technology stocks. And one area would be 85 00:04:55,279 --> 00:04:58,640 Speaker 2: for example exchange traded funds with a focus on chinese 86 00:04:58,640 --> 00:05:02,320 Speaker 2: or U. S. Technology stocks. That's mainly because prices are 87 00:05:02,320 --> 00:05:04,210 Speaker 2: down in the moment, but you need to have a 88 00:05:04,210 --> 00:05:06,130 Speaker 2: lot of patients before you can see an upturn. 89 00:05:06,880 --> 00:05:13,910 Speaker 2: The third strategy is non discretionary consumer stocks. I like groceries. 90 00:05:13,920 --> 00:05:18,180 Speaker 2: I like things like natural gas, bread, things that local 91 00:05:18,180 --> 00:05:23,080 Speaker 2: consumers would actually buy more as the economies get worse. 92 00:05:23,089 --> 00:05:25,880 Speaker 2: And the fourth strategy which I would consider the least 93 00:05:25,880 --> 00:05:29,870 Speaker 2: attractive right now would be real estate investment trust. But 94 00:05:29,870 --> 00:05:32,300 Speaker 2: the beauty of this is that real estate investment trust 95 00:05:32,310 --> 00:05:34,370 Speaker 2: as interest rates were to go up very quickly. Like 96 00:05:34,370 --> 00:05:36,039 Speaker 2: what we're seeing right now 97 00:05:36,510 --> 00:05:40,970 Speaker 2: mathematically, I suspect they would start to behave like bonds. 98 00:05:40,980 --> 00:05:44,230 Speaker 2: So as interest rates were to go up, the loss 99 00:05:44,230 --> 00:05:47,810 Speaker 2: in the value of these bonds would be minimized. So 100 00:05:47,810 --> 00:05:50,710 Speaker 2: that might also be an area that investors might like 101 00:05:50,710 --> 00:05:53,040 Speaker 2: to get into. And we've got very, very attractive bonds 102 00:05:53,040 --> 00:05:57,110 Speaker 2: denominated in foreign currencies that are high yielding right now. 103 00:05:57,120 --> 00:05:59,960 Speaker 2: So generally this sums up the four pronged strategy that 104 00:05:59,960 --> 00:06:00,330 Speaker 2: I will 105 00:06:00,339 --> 00:06:03,390 Speaker 2: adopt for the next nine months, it will still be 106 00:06:03,400 --> 00:06:07,380 Speaker 2: nine months of hurt. But if you have some extra income, 107 00:06:07,390 --> 00:06:09,659 Speaker 2: this is a very good place to play. We can 108 00:06:09,670 --> 00:06:12,270 Speaker 2: actually play the market recovery. And one more thing I 109 00:06:12,270 --> 00:06:15,529 Speaker 2: would suggest is that do not farm all your funds 110 00:06:15,529 --> 00:06:17,430 Speaker 2: into the markets at the same time because we don't 111 00:06:17,430 --> 00:06:20,190 Speaker 2: know when the bottom is going to be, it may 112 00:06:20,190 --> 00:06:22,390 Speaker 2: be wise to divide your money into nine or 10 113 00:06:22,390 --> 00:06:26,430 Speaker 2: parts and invested in the markets one part every month. 114 00:06:26,440 --> 00:06:27,270 Speaker 2: I see 115 00:06:27,420 --> 00:06:32,049 Speaker 2: what you're recommending seems to be to look at investments 116 00:06:32,060 --> 00:06:35,890 Speaker 2: that people really need in their day to day lives, 117 00:06:35,890 --> 00:06:40,779 Speaker 2: stick to things that are essential essentially. That's right now. 118 00:06:40,779 --> 00:06:42,800 Speaker 2: The logic is that as we expiry 119 00:06:42,990 --> 00:06:47,650 Speaker 2: higher inflation in the consumer markets, most consumer families would 120 00:06:47,660 --> 00:06:50,800 Speaker 2: be experiencing higher mortgage loans so they don't have so 121 00:06:50,800 --> 00:06:53,099 Speaker 2: much income to spend. And one of the things you 122 00:06:53,100 --> 00:06:54,779 Speaker 2: would do when you are trying to cut down on 123 00:06:54,779 --> 00:06:57,440 Speaker 2: family expenses is that you might reduce the restaurant visits 124 00:06:57,440 --> 00:06:58,200 Speaker 2: that you have. 125 00:06:58,550 --> 00:07:01,089 Speaker 2: And that would mean spending more money on groceries, spending 126 00:07:01,089 --> 00:07:04,340 Speaker 2: more money on bread, spending more money on gas. So 127 00:07:04,339 --> 00:07:07,070 Speaker 2: that seems to be a very logical reaction to what 128 00:07:07,070 --> 00:07:11,350 Speaker 2: families do when they're experiencing high inflation. You mentioned reads 129 00:07:11,360 --> 00:07:14,280 Speaker 2: here in Singapore, we have a lot of rates and 130 00:07:14,290 --> 00:07:18,480 Speaker 2: this is something that investors like buying, but recently they've 131 00:07:18,480 --> 00:07:21,380 Speaker 2: been battered too. I mean the plunge in 132 00:07:21,390 --> 00:07:26,590 Speaker 2: reads has been painful for many investors. Why reads, Is 133 00:07:26,590 --> 00:07:31,550 Speaker 2: it time to continue buying reads or just stop and 134 00:07:31,550 --> 00:07:34,520 Speaker 2: wait it out. I'm of two minds about the situation 135 00:07:34,520 --> 00:07:38,100 Speaker 2: for real estate Investment trust. On one hand, we're looking 136 00:07:38,100 --> 00:07:41,590 Speaker 2: at maybe once in a lifetime bargain. That could be 137 00:07:41,590 --> 00:07:45,290 Speaker 2: quite similar to the situation in 2008 and we're talking 138 00:07:45,290 --> 00:07:48,710 Speaker 2: about some real estate investment trust going above 9% a 139 00:07:48,710 --> 00:07:51,330 Speaker 2: year in terms of evidence that you'll be getting, 140 00:07:51,530 --> 00:07:56,010 Speaker 2: I guess we cannot be overly fearful, but we can't 141 00:07:56,010 --> 00:07:57,700 Speaker 2: be overly greedy as well. 142 00:07:57,840 --> 00:08:01,250 Speaker 2: So labeling at the sidelines for the next 6 to 143 00:08:01,250 --> 00:08:04,800 Speaker 2: 9 months, it's probably the middle ground. I'm a huge 144 00:08:04,800 --> 00:08:08,410 Speaker 2: fan of region 75% of my personal portfolio is tied 145 00:08:08,410 --> 00:08:10,580 Speaker 2: down in Real Estate Investment Trust? I love it. It's 146 00:08:10,580 --> 00:08:13,140 Speaker 2: the equivalent of renting out a condominium, but you don't 147 00:08:13,140 --> 00:08:16,140 Speaker 2: have nasty tenants to deal with. It's something that we 148 00:08:16,140 --> 00:08:20,770 Speaker 2: should own more of a lot of non professional investors 149 00:08:20,770 --> 00:08:21,790 Speaker 2: like myself. When you 150 00:08:21,806 --> 00:08:25,356 Speaker 2: look at your portfolio, a lot of us are seeing reds, 151 00:08:25,366 --> 00:08:30,926 Speaker 2: a lot of minus negative numbers. So it is painful 152 00:08:30,926 --> 00:08:33,946 Speaker 2: and some people are really nervous about what's going on. 153 00:08:33,946 --> 00:08:37,646 Speaker 2: And like I said, this hasn't happened in a while. 154 00:08:37,655 --> 00:08:41,386 Speaker 2: So there are some new investors that are experiencing a 155 00:08:41,386 --> 00:08:45,760 Speaker 2: market downturn for the first time. What would you advise 156 00:08:45,772 --> 00:08:48,562 Speaker 2: advised then what should they do? Is it time to 157 00:08:48,562 --> 00:08:52,232 Speaker 2: wait it out or turn to safer bets maybe like 158 00:08:52,242 --> 00:08:55,832 Speaker 2: a fixed deposits because that's getting some interest as well 159 00:08:55,832 --> 00:08:58,592 Speaker 2: and then there are government bond here in Singapore that 160 00:08:58,592 --> 00:09:02,382 Speaker 2: are also getting some attention. Okay, I know how difficult 161 00:09:02,381 --> 00:09:05,641 Speaker 2: is it to be experiencing a portfolio that is red. 162 00:09:05,652 --> 00:09:07,582 Speaker 2: There are certain points in my life where this has 163 00:09:07,582 --> 00:09:10,462 Speaker 2: happened when I was much younger as well. My only 164 00:09:10,462 --> 00:09:15,100 Speaker 2: advice is in times like this, your only defense 165 00:09:15,320 --> 00:09:19,510 Speaker 2: is a source of income when it comes from your salary, patents, 166 00:09:19,510 --> 00:09:22,550 Speaker 2: royalties or dividends, there is a source of income and 167 00:09:22,550 --> 00:09:25,140 Speaker 2: you need to be able to spend a significant less 168 00:09:25,150 --> 00:09:27,189 Speaker 2: than what your income can bring in for you. And 169 00:09:27,190 --> 00:09:29,750 Speaker 2: that's your best defense. Now, once you get yourself into 170 00:09:29,750 --> 00:09:30,829 Speaker 2: this safety zone, 171 00:09:31,200 --> 00:09:33,130 Speaker 2: The next question is, are you going to try to 172 00:09:33,130 --> 00:09:36,080 Speaker 2: exploit the downturn? Because this is where a lot of 173 00:09:36,090 --> 00:09:39,570 Speaker 2: interchange of wealth takes place and the person who is 174 00:09:39,570 --> 00:09:42,479 Speaker 2: the most resilient would be able to make it in 175 00:09:42,480 --> 00:09:46,570 Speaker 2: about 2-3 times significantly wealthier than before. So this is 176 00:09:46,570 --> 00:09:50,679 Speaker 2: an opportunity that should not be missed actually. And it's 177 00:09:50,690 --> 00:09:53,090 Speaker 2: all a question of how resilient you are. 178 00:09:53,280 --> 00:09:56,220 Speaker 2: As for the second question regarding fixed income are not 179 00:09:56,230 --> 00:09:59,219 Speaker 2: a big fan of bonds. And for the simple reason 180 00:09:59,220 --> 00:10:02,910 Speaker 2: that if you look at consumer price indices in Singapore, 181 00:10:02,920 --> 00:10:06,500 Speaker 2: we're looking at an inflation of closer to I think 7% 182 00:10:06,510 --> 00:10:08,550 Speaker 2: what we're experiencing is that if you were to put 183 00:10:08,550 --> 00:10:10,790 Speaker 2: your money into the six month t bills that are 184 00:10:10,790 --> 00:10:16,100 Speaker 2: having very attractive use right now, you are locking down 185 00:10:16,110 --> 00:10:18,110 Speaker 2: a loss of about 2 to 3% 186 00:10:18,240 --> 00:10:20,730 Speaker 2: and that's something which I think people need to remember 187 00:10:20,740 --> 00:10:23,410 Speaker 2: that inflation is running higher than what most of these 188 00:10:23,410 --> 00:10:26,310 Speaker 2: government bonds can give to you and you can make 189 00:10:26,309 --> 00:10:30,230 Speaker 2: a mistake and miscalculate when there is a rebound in 190 00:10:30,230 --> 00:10:32,679 Speaker 2: assets that have been beaten down like the estate investment 191 00:10:32,679 --> 00:10:36,850 Speaker 2: trust technology stocks and if there is actually a rebound 192 00:10:36,850 --> 00:10:39,830 Speaker 2: while your money is stuck in the six month bond 193 00:10:39,840 --> 00:10:43,110 Speaker 2: or the fixed deposit, you could have done better if 194 00:10:43,110 --> 00:10:43,530 Speaker 2: you had 195 00:10:43,540 --> 00:10:47,460 Speaker 2: done something that has a much higher risk. So I 196 00:10:47,460 --> 00:10:51,660 Speaker 2: actually think that given that interest rate rises, we don't 197 00:10:51,660 --> 00:10:55,949 Speaker 2: project arise after Q three of 20 to 3 government 198 00:10:55,950 --> 00:10:59,510 Speaker 2: bonds are actually fairly risky for the retail investor, but 199 00:10:59,510 --> 00:11:01,990 Speaker 2: of course it's very difficult to convince lay people to 200 00:11:02,000 --> 00:11:05,160 Speaker 2: think that way. I see the rush for these fixed 201 00:11:05,160 --> 00:11:08,830 Speaker 2: income instruments to become bigger over the next few months. 202 00:11:09,200 --> 00:11:11,960 Speaker 2: But I'm personally not a big fan, I guess it 203 00:11:11,960 --> 00:11:15,120 Speaker 2: also depends on when you need that money, right. If 204 00:11:15,120 --> 00:11:19,040 Speaker 2: you're closer to retirement, then there might be a bigger 205 00:11:19,040 --> 00:11:21,610 Speaker 2: case for something like that. But for those who are 206 00:11:21,610 --> 00:11:24,380 Speaker 2: maybe younger and you still have a couple of decades 207 00:11:24,565 --> 00:11:28,535 Speaker 2: before you hit retirement, then would it be time to 208 00:11:28,535 --> 00:11:31,214 Speaker 2: find something else? Okay, I think younger people would need 209 00:11:31,215 --> 00:11:35,035 Speaker 2: to readjust the way they think about capital. One way 210 00:11:35,035 --> 00:11:38,205 Speaker 2: of doing that is to refer to a Nobel prize winner. 211 00:11:38,215 --> 00:11:39,925 Speaker 2: Gary Becker an economist 212 00:11:40,470 --> 00:11:43,780 Speaker 2: and young people should not see their capital as being 213 00:11:43,780 --> 00:11:47,160 Speaker 2: the amount in your bank account or in your stock portfolios. 214 00:11:47,170 --> 00:11:50,270 Speaker 2: The large amount of capital that you have is in 215 00:11:50,270 --> 00:11:54,790 Speaker 2: your human capital, which is the present value of the 216 00:11:54,790 --> 00:11:58,000 Speaker 2: salary that you have not earned yet. So the amount 217 00:11:58,000 --> 00:11:59,880 Speaker 2: of wealth that you're dealing with that you're putting into 218 00:11:59,880 --> 00:12:01,969 Speaker 2: this T boards is in fact a very small fraction 219 00:12:01,970 --> 00:12:03,390 Speaker 2: of what you actually own. 220 00:12:03,770 --> 00:12:05,710 Speaker 2: So how do you deal with your human capital? You 221 00:12:05,710 --> 00:12:08,690 Speaker 2: might want to invest in training, attend some courses to 222 00:12:08,690 --> 00:12:11,739 Speaker 2: get an advanced degree. That's how you actually increase your wealth. 223 00:12:11,740 --> 00:12:15,699 Speaker 2: If you're young, you shouldn't spend too much time fixating 224 00:12:15,700 --> 00:12:18,670 Speaker 2: on your investment portfolio. And once again, that's very counter 225 00:12:18,679 --> 00:12:21,209 Speaker 2: intuitive and it's something that I think should be taught 226 00:12:21,210 --> 00:12:24,080 Speaker 2: to everyone in Singapore because whatever skills you have, I 227 00:12:24,080 --> 00:12:26,829 Speaker 2: guess no market downturn can take away from you. Right? 228 00:12:26,830 --> 00:12:28,160 Speaker 2: That's right, that's right. 229 00:12:31,700 --> 00:12:34,939 Speaker 2: Hello everyone, my name is Christina and I'm Adrienne and 230 00:12:34,940 --> 00:12:37,340 Speaker 2: we're the host of a podcast called Work it if 231 00:12:37,340 --> 00:12:39,319 Speaker 2: you've never heard of it. Well, it's a good time 232 00:12:39,320 --> 00:12:42,130 Speaker 2: to tap in in the last 20 episodes, we've discussed 233 00:12:42,130 --> 00:12:45,320 Speaker 2: topics like how to negotiate for a salary increase or 234 00:12:45,320 --> 00:12:47,930 Speaker 2: how to get along with younger colleagues who have different 235 00:12:47,929 --> 00:12:49,060 Speaker 2: values from you, which 236 00:12:49,070 --> 00:12:52,830 Speaker 2: incidentally is our top performing episode if what consumes your 237 00:12:52,830 --> 00:12:56,560 Speaker 2: life and you want some perspective on issues like management stress, 238 00:12:56,570 --> 00:13:00,319 Speaker 2: even office romance. This podcast should be on your list 239 00:13:00,330 --> 00:13:03,310 Speaker 2: a new episode drops every monday. Catch us on the 240 00:13:03,309 --> 00:13:06,440 Speaker 2: Sienna app or wherever you get your podcast, 241 00:13:10,220 --> 00:13:14,260 Speaker 2: I want to turn to cryptocurrencies now because that has 242 00:13:14,260 --> 00:13:19,550 Speaker 2: been a major move. In 2022 we saw Bitcoin plunged 243 00:13:19,559 --> 00:13:24,780 Speaker 2: by the tens of thousands and we saw tariffs fall 244 00:13:24,780 --> 00:13:29,130 Speaker 2: and now we're seeing F. D. X. S dramatic bankruptcy 245 00:13:29,130 --> 00:13:34,850 Speaker 2: and you've taught Cryptocurrency classes, how do you prepare others 246 00:13:34,860 --> 00:13:35,210 Speaker 2: for 247 00:13:35,225 --> 00:13:40,955 Speaker 2: For such a situation in the Cryptocurrency space, right. Cryptocurrencies 248 00:13:40,955 --> 00:13:44,814 Speaker 2: has been an unmitigated disaster in the world 2022. There 249 00:13:44,815 --> 00:13:48,955 Speaker 2: is no way of sugarcoating what's happening in the crypto space? 250 00:13:48,965 --> 00:13:52,755 Speaker 2: It's bad, it's an accumulation of the hubris and bad 251 00:13:52,755 --> 00:13:55,555 Speaker 2: Karma that has been happening for the past few years 252 00:13:55,554 --> 00:13:58,675 Speaker 2: with a lot of people pumping crypto up to ridiculous heights. 253 00:13:58,684 --> 00:14:00,215 Speaker 2: So now we're paying for what we've done. 254 00:14:00,530 --> 00:14:02,650 Speaker 2: There are several ways to look at crypto. The most 255 00:14:02,650 --> 00:14:05,860 Speaker 2: important question the crypto investor needs to ask themselves is 256 00:14:05,870 --> 00:14:08,599 Speaker 2: what is going to happen with finance falls? We've seen 257 00:14:08,610 --> 00:14:10,939 Speaker 2: luna field, we've seen the fall of F. T. X. 258 00:14:10,950 --> 00:14:13,740 Speaker 2: So the question is what happens with finance fails, Will 259 00:14:13,740 --> 00:14:16,050 Speaker 2: it be an apocalyptic event? If you ask yourself that 260 00:14:16,050 --> 00:14:18,880 Speaker 2: question then it's very easy to derive what you can 261 00:14:18,880 --> 00:14:20,260 Speaker 2: do moving forward. The first thing 262 00:14:20,270 --> 00:14:22,870 Speaker 2: You want to do is limit crypto to 1% of 263 00:14:22,870 --> 00:14:25,550 Speaker 2: your portfolio. Now a lot of financial advisors talk about 264 00:14:25,550 --> 00:14:29,070 Speaker 2: limiting crypto to 1% because it's a highly volatile instrument 265 00:14:29,070 --> 00:14:31,500 Speaker 2: against can be very large. The losses can be very large. 266 00:14:31,510 --> 00:14:33,950 Speaker 2: So if you put crypto on this thing known as 267 00:14:33,950 --> 00:14:36,930 Speaker 2: an efficient frontier in finance, there is room to invest 268 00:14:36,930 --> 00:14:39,170 Speaker 2: in crypto but you keep it within 1%. That's the 269 00:14:39,170 --> 00:14:40,010 Speaker 2: first thing you want to do. 270 00:14:40,530 --> 00:14:42,140 Speaker 2: The second thing you want to do is you want 271 00:14:42,140 --> 00:14:45,650 Speaker 2: to move your crypto away from centralized exchanges and move 272 00:14:45,650 --> 00:14:48,940 Speaker 2: them either to a cold wallet or to a decentralized wallet. 273 00:14:48,940 --> 00:14:51,370 Speaker 2: That's to protect your interest in case anything were to 274 00:14:51,370 --> 00:14:55,660 Speaker 2: happen to a centralized exchange. And the third strategy is 275 00:14:55,660 --> 00:14:59,840 Speaker 2: to only invest in the crypto that's been around the longest. 276 00:14:59,850 --> 00:15:02,460 Speaker 2: And the two cryptocurrencies that come into my mind is 277 00:15:02,460 --> 00:15:05,710 Speaker 2: obviously Bitcoin and Peter Wright is like gold and silver. 278 00:15:05,720 --> 00:15:08,880 Speaker 2: So if you position yourself this way for the future, 279 00:15:09,150 --> 00:15:11,940 Speaker 2: you should be able to survive the apocalypse. If you 280 00:15:11,940 --> 00:15:15,510 Speaker 2: talk about the mainstream markets being bad, the situation in 281 00:15:15,510 --> 00:15:18,140 Speaker 2: crypto is going to be 10 times worse. So that's 282 00:15:18,140 --> 00:15:20,830 Speaker 2: something that I think people should start thinking about. Do 283 00:15:20,830 --> 00:15:24,390 Speaker 2: you think the crypto market will be worse than 2023? 284 00:15:24,400 --> 00:15:28,790 Speaker 2: The crypto market is characterized by a ridiculous amount of 285 00:15:28,790 --> 00:15:31,360 Speaker 2: volatility when I back tested it with computer software, we're 286 00:15:31,360 --> 00:15:37,260 Speaker 2: talking about 99%. So it is impossible for any person 287 00:15:37,260 --> 00:15:38,670 Speaker 2: that claims to be a guru 288 00:15:38,830 --> 00:15:42,270 Speaker 2: To determine whether what's going to happen to crypto in 20-3, 289 00:15:42,270 --> 00:15:46,180 Speaker 2: but be careful and if you were to just put 1% 290 00:15:46,180 --> 00:15:48,850 Speaker 2: into crypto it would be fine. I think for the 291 00:15:48,850 --> 00:15:52,060 Speaker 2: people who are in the crypto profession, you should be 292 00:15:52,060 --> 00:15:55,800 Speaker 2: looking at Blockchain, the use cases for Blockchain and how 293 00:15:55,800 --> 00:16:00,490 Speaker 2: to use the technology beyond just hawking new coins to 294 00:16:00,490 --> 00:16:04,900 Speaker 2: merely come up with coins and float them and encourage speculation. 295 00:16:05,040 --> 00:16:07,359 Speaker 2: I think this is the lesson that young people need 296 00:16:07,360 --> 00:16:10,730 Speaker 2: to learn today and that's turned out fairly disastrous for 297 00:16:10,730 --> 00:16:14,650 Speaker 2: a lot of people. What does an ideal portfolio look 298 00:16:14,650 --> 00:16:17,660 Speaker 2: like as we head into 2023, a lot of us 299 00:16:17,670 --> 00:16:20,750 Speaker 2: are taking stock of where we are. What will the 300 00:16:20,765 --> 00:16:25,535 Speaker 2: determine whether our investments are healthy and we have made 301 00:16:25,535 --> 00:16:29,245 Speaker 2: the right decisions. Well for me, I'm a little bit biased, 302 00:16:29,245 --> 00:16:33,125 Speaker 2: I've always had a dividend portfolio. It has always supported 303 00:16:33,135 --> 00:16:37,745 Speaker 2: my own personal financial freedom and retirement planning. So I 304 00:16:37,745 --> 00:16:41,270 Speaker 2: would say that a good portfolio should be generating cash 305 00:16:41,270 --> 00:16:42,220 Speaker 2: for the investor. 306 00:16:42,460 --> 00:16:45,010 Speaker 2: This does not necessarily have to come in the form 307 00:16:45,010 --> 00:16:47,810 Speaker 2: of dividend use it can be a share buyback and 308 00:16:47,810 --> 00:16:49,580 Speaker 2: to do that, we need to get into the financial 309 00:16:49,580 --> 00:16:52,440 Speaker 2: statements and look for this property known as free cash flow. 310 00:16:53,060 --> 00:16:56,600 Speaker 2: I personally like businesses that churn out a lot of cash, 311 00:16:56,600 --> 00:16:58,780 Speaker 2: but these are not the sexy companies, they have a 312 00:16:58,780 --> 00:17:01,160 Speaker 2: tendency to be well established cash cow, like kind of 313 00:17:01,160 --> 00:17:04,590 Speaker 2: companies and then these cash flows can then be deployed 314 00:17:04,600 --> 00:17:07,590 Speaker 2: to a family to basically offset their expenses. And I 315 00:17:07,590 --> 00:17:09,340 Speaker 2: think that this should be the way we should be 316 00:17:09,340 --> 00:17:12,540 Speaker 2: looking at our personal investments rather than trying to gun 317 00:17:12,540 --> 00:17:14,630 Speaker 2: for the 10 bagger or the five bagger. I mean 318 00:17:14,800 --> 00:17:18,470 Speaker 2: it's good. You can analyze the company full time, but 319 00:17:18,470 --> 00:17:20,950 Speaker 2: generally it takes a lot of brain power and a 320 00:17:20,950 --> 00:17:24,380 Speaker 2: lot of financial analytics and computer coding these days to 321 00:17:24,380 --> 00:17:27,080 Speaker 2: be able to make an analysis of that level of 322 00:17:27,080 --> 00:17:29,270 Speaker 2: computational power. I think we need to go back to 323 00:17:29,270 --> 00:17:31,700 Speaker 2: the basics. So the point I want investors to ask 324 00:17:31,700 --> 00:17:34,570 Speaker 2: themselves is to tell whatever company they are investing in. 325 00:17:34,570 --> 00:17:36,660 Speaker 2: Show me the money. I think that's the most important thing. 326 00:17:36,660 --> 00:17:38,109 Speaker 2: Don't give me these projects that 327 00:17:38,420 --> 00:17:42,149 Speaker 2: Have a very long time horizon to realize itself. We 328 00:17:42,150 --> 00:17:45,110 Speaker 2: want businesses that can put money in our pockets straight away. 329 00:17:45,119 --> 00:17:47,219 Speaker 2: But there's a lot of hubris going on and you 330 00:17:47,220 --> 00:17:49,389 Speaker 2: will see a lot more instances of fraud, I guess 331 00:17:49,390 --> 00:17:52,710 Speaker 2: over the next 6-9 months, why is that why fraud 332 00:17:52,720 --> 00:17:55,810 Speaker 2: that happens when the economy starts to turn bad? You 333 00:17:55,810 --> 00:17:58,280 Speaker 2: discover who's swimming naked when the tide goes down. 334 00:17:58,619 --> 00:18:04,380 Speaker 2: It's very natural that auditors, investors would discover incidences of 335 00:18:04,390 --> 00:18:08,140 Speaker 2: wrongdoing in the financial market. I project that 20 to 3, 336 00:18:08,150 --> 00:18:10,389 Speaker 2: you're going to see a lot of that And of 337 00:18:10,390 --> 00:18:11,990 Speaker 2: course not to mention that the short sellers will be 338 00:18:11,990 --> 00:18:15,030 Speaker 2: coming out to name and shame some of these companies 339 00:18:15,040 --> 00:18:16,800 Speaker 2: that should be fun to see what happens in the 340 00:18:16,800 --> 00:18:20,170 Speaker 2: commercial world. Well, before we let you go Christopher, what's 341 00:18:20,170 --> 00:18:20,480 Speaker 2: your fine 342 00:18:20,590 --> 00:18:25,220 Speaker 2: Advice for our listeners who are thinking of investing in 2023? 343 00:18:25,230 --> 00:18:28,410 Speaker 2: Just remember that we are only human. And when your 344 00:18:28,410 --> 00:18:31,670 Speaker 2: portfolio goes red, you're going to get worried when things 345 00:18:31,680 --> 00:18:34,340 Speaker 2: increase in price, you're gonna get worried if you get retrenched, 346 00:18:34,340 --> 00:18:36,340 Speaker 2: definitely you're going to be worried. I think the most 347 00:18:36,340 --> 00:18:39,590 Speaker 2: important thing is you need to build up some personal resilience. 348 00:18:39,600 --> 00:18:41,740 Speaker 2: There's been moments in your life when you have achieved 349 00:18:41,760 --> 00:18:44,790 Speaker 2: something and that forms the cornerstone of your personality and 350 00:18:44,790 --> 00:18:48,169 Speaker 2: gives you the confidence to carry on in the following year. 351 00:18:48,570 --> 00:18:52,050 Speaker 2: So maybe instead of going for your New year resolutions right. 352 00:18:52,050 --> 00:18:54,130 Speaker 2: Maybe you start thinking about all the good things that 353 00:18:54,130 --> 00:18:56,140 Speaker 2: you have achieved in the past and things will look 354 00:18:56,140 --> 00:18:58,629 Speaker 2: better I think in the middle of the year. So 355 00:18:58,630 --> 00:19:02,040 Speaker 2: despite all the trouble that many of us have faced 356 00:19:02,040 --> 00:19:04,820 Speaker 2: in the stock market, it's time to counter bless 357 00:19:04,830 --> 00:19:08,590 Speaker 2: things and be grateful as we start the new year 358 00:19:08,600 --> 00:19:12,150 Speaker 2: because we may be up for another tough what 69 359 00:19:12,150 --> 00:19:16,030 Speaker 2: months as you mentioned. But of course our best defense, 360 00:19:16,030 --> 00:19:20,070 Speaker 2: as you said, there is our income, our personal skills 361 00:19:20,070 --> 00:19:23,450 Speaker 2: and that's something the market cannot take away from us. 362 00:19:23,450 --> 00:19:26,580 Speaker 2: Thanks so much for sharing your insights today Christopher 363 00:19:30,320 --> 00:19:33,980 Speaker 2: and thank you to our listeners. If you've enjoyed money talks, 364 00:19:33,980 --> 00:19:37,639 Speaker 2: do follow us on apple podcasts or Spotify. If you 365 00:19:37,640 --> 00:19:40,160 Speaker 2: like what you hear, do rate us or better still 366 00:19:40,170 --> 00:19:43,790 Speaker 2: leave us a review. If you're looking for investment ideas 367 00:19:43,790 --> 00:19:47,810 Speaker 2: or financial advice, do check out our previous episodes where 368 00:19:47,810 --> 00:19:51,109 Speaker 2: we cover issues like the fire movement, investing 369 00:19:51,119 --> 00:19:56,310 Speaker 2: with just $100 a managing debt and investing with your CPF. Now, 370 00:19:56,310 --> 00:19:58,560 Speaker 2: if you have a topic you're interested to hear about 371 00:19:58,570 --> 00:20:02,480 Speaker 2: or have feedback, write to us at Sienna podcasts at 372 00:20:02,490 --> 00:20:05,810 Speaker 2: Mediacorp dot com dot S G. The team behind Money 373 00:20:05,810 --> 00:20:10,680 Speaker 2: talks is Joanne, chan, Jacqueline, chan Danieli Christina robert. And 374 00:20:10,680 --> 00:20:11,480 Speaker 2: I'm Sarah called.