1 00:00:00,009 --> 00:00:02,309 Speaker 1: You're listening to AC N A podcast. 2 00:00:05,159 --> 00:00:08,578 Speaker 2: Hey, it's me, your Money Talks host, Andrea Heng. Now, 3 00:00:08,590 --> 00:00:11,789 Speaker 2: before I get into today's episode, I just wanted to 4 00:00:11,800 --> 00:00:15,520 Speaker 2: say a big thank you to everyone who has been 5 00:00:15,529 --> 00:00:19,979 Speaker 2: following us on Spotify Apple podcast and also on youtube music. 6 00:00:20,100 --> 00:00:23,139 Speaker 2: We've been getting some of your questions, we see them. Ok? 7 00:00:23,159 --> 00:00:23,670 Speaker 2: So trust 8 00:00:23,809 --> 00:00:27,200 Speaker 2: me when I say we are working on them, but 9 00:00:27,209 --> 00:00:30,700 Speaker 2: it will also make a huge difference to us if 10 00:00:30,709 --> 00:00:33,500 Speaker 2: you follow us on these platforms and give us your 11 00:00:33,509 --> 00:00:36,119 Speaker 2: feedback too while you're there. Ok? It will help us 12 00:00:36,130 --> 00:00:39,549 Speaker 2: actually know what you want to learn about personal finance 13 00:00:39,689 --> 00:00:42,319 Speaker 2: and then we can get the right guests to teach you. 14 00:00:42,619 --> 00:00:45,269 Speaker 2: All right. So let's get started with some quick headlines 15 00:00:45,279 --> 00:00:48,639 Speaker 2: that may help you make better financial decisions today. 16 00:00:48,930 --> 00:00:55,040 Speaker 2: I have my editor with me, Tiffany Ang in the studio. Hey, Andrea. Hi. Ok. 17 00:00:55,049 --> 00:00:57,750 Speaker 2: First up, did you see the news last week? That 18 00:00:57,759 --> 00:01:01,470 Speaker 2: a five room H DB flat in to payoh broke 19 00:01:01,479 --> 00:01:02,470 Speaker 2: record 20 00:01:02,709 --> 00:01:07,529 Speaker 2: and sold for more than 1.5 million Singapore dollars. This 21 00:01:07,540 --> 00:01:10,039 Speaker 2: is as big as my eyes can go. It is 22 00:01:10,169 --> 00:01:13,510 Speaker 2: quite it is quite big. I was shocked when I 23 00:01:13,519 --> 00:01:16,029 Speaker 2: saw the headline, I mean, we're not, we're not strangers 24 00:01:16,040 --> 00:01:19,050 Speaker 2: to million dollar H DB flats. But this is really 25 00:01:19,059 --> 00:01:22,000 Speaker 2: taking the cake 1.5 million. Yeah, it's the price of 26 00:01:22,010 --> 00:01:23,809 Speaker 2: a condominium. Really? Exactly. 27 00:01:24,110 --> 00:01:27,449 Speaker 2: But of course, these are the rare cases. The strongest 28 00:01:27,459 --> 00:01:31,559 Speaker 2: demand is still for four room flats. Housing experts are 29 00:01:31,569 --> 00:01:35,029 Speaker 2: saying that young families are pushing up the prices of 30 00:01:35,040 --> 00:01:38,970 Speaker 2: four room HDB flats by up to 35% over the 31 00:01:38,980 --> 00:01:41,050 Speaker 2: last five years. You know what if that kind of 32 00:01:41,059 --> 00:01:43,559 Speaker 2: makes sense? I think the appeal of three room flats 33 00:01:43,569 --> 00:01:45,599 Speaker 2: for young couples. I think it just doesn't make sense 34 00:01:45,610 --> 00:01:48,730 Speaker 2: anymore in terms of paying lease. And also, yeah, the size, 35 00:01:49,099 --> 00:01:51,809 Speaker 2: you know, so the four room flats, I mean, these 36 00:01:52,019 --> 00:01:53,239 Speaker 2: are probably 37 00:01:53,426 --> 00:01:56,015 Speaker 2: part of a popular category for growing families because you know, 38 00:01:56,026 --> 00:01:59,036 Speaker 2: to buy a five room flat, it may actually bust 39 00:01:59,045 --> 00:02:02,305 Speaker 2: their budget, it may actually even be too big and 40 00:02:02,316 --> 00:02:04,085 Speaker 2: they don't want to have to wait for a BT 41 00:02:04,096 --> 00:02:06,325 Speaker 2: O flat and that, you know, we can take up 42 00:02:06,335 --> 00:02:09,445 Speaker 2: to 4 to 5 years to build, correct, let alone 43 00:02:09,455 --> 00:02:12,546 Speaker 2: waiting for the keys. The Renault add to that. It's 44 00:02:12,576 --> 00:02:14,876 Speaker 2: I know before you know, it's 67 years. Right? And 45 00:02:14,886 --> 00:02:18,166 Speaker 2: three kids later. Exactly. So one can only hope that 46 00:02:18,175 --> 00:02:22,645 Speaker 2: these prices don't soar to record levels with this growing 47 00:02:22,931 --> 00:02:26,921 Speaker 2: fingers crossed, fingers crossed. Well, speaking of property big news 48 00:02:27,031 --> 00:02:31,011 Speaker 2: this week for China real estate watchers. Yeah, Hong Kong 49 00:02:31,022 --> 00:02:36,150 Speaker 2: court has ordered the liquidation of China Evergrande Group. So Evergrande, 50 00:02:36,162 --> 00:02:40,102 Speaker 2: if you didn't know has more than $300 billion of 51 00:02:40,111 --> 00:02:43,692 Speaker 2: total liabilities, that's a lot of money. Well, it sent 52 00:02:43,701 --> 00:02:46,802 Speaker 2: the struggling property sector in China into a tail spin 53 00:02:46,921 --> 00:02:50,332 Speaker 2: when it defaulted on its debt in 2021. This ever 54 00:02:50,341 --> 00:02:51,951 Speaker 2: Grand saga is a never 55 00:02:52,348 --> 00:02:56,268 Speaker 2: story. I mean, China's property market really hasn't been looking 56 00:02:56,276 --> 00:02:59,167 Speaker 2: very good and its stock market. Well, it has been 57 00:02:59,177 --> 00:03:02,946 Speaker 2: wallowing near five year low. So all eyes are now 58 00:03:02,957 --> 00:03:05,158 Speaker 2: on what the government is going to do next to 59 00:03:05,167 --> 00:03:09,117 Speaker 2: rejuvenate growth in the ailing Chinese economy. And this ever 60 00:03:09,127 --> 00:03:12,348 Speaker 2: grow saga. I think it's just making it worse. This 61 00:03:12,358 --> 00:03:14,837 Speaker 2: is also a good time to remind everyone of the 62 00:03:14,848 --> 00:03:18,688 Speaker 2: risks of investing in some sectors and for some investors 63 00:03:18,697 --> 00:03:21,276 Speaker 2: to perhaps even re look at your portfolio. 64 00:03:21,604 --> 00:03:24,744 Speaker 2: So perhaps in this climate, adjust your exposure to China 65 00:03:24,752 --> 00:03:27,593 Speaker 2: according to your risk profile. Yeah, that's some good advice. 66 00:03:27,604 --> 00:03:29,714 Speaker 2: But you know what, it's not all doom and gloom. 67 00:03:29,723 --> 00:03:32,032 Speaker 2: Have a listen to an episode that we did last 68 00:03:32,044 --> 00:03:36,563 Speaker 2: year when China was reopening after COVID-19, we did talk 69 00:03:36,574 --> 00:03:40,393 Speaker 2: about some possible growth sectors in the country. Just search 70 00:03:40,404 --> 00:03:43,143 Speaker 2: for as China reopens for business. Is it time to 71 00:03:43,154 --> 00:03:47,623 Speaker 2: invest in China's stocks? Remember always do your homework, find 72 00:03:47,634 --> 00:03:50,553 Speaker 2: the right professional advice and you'll be on your way. 73 00:03:53,360 --> 00:03:57,149 Speaker 2: So every other year my mom asks to go shopping 74 00:03:57,160 --> 00:03:59,279 Speaker 2: for gold. I don't know about you. But when I 75 00:03:59,289 --> 00:04:03,130 Speaker 2: was younger, I didn't understand the significance of this. Like, 76 00:04:03,139 --> 00:04:07,160 Speaker 2: why was it so important to hoard gold after all? 77 00:04:07,169 --> 00:04:09,880 Speaker 2: I'm a really simple G OK. When it comes to jewelry, 78 00:04:09,889 --> 00:04:12,630 Speaker 2: just one pair of earrings, one bracelet. That's it. I 79 00:04:12,639 --> 00:04:16,260 Speaker 2: don't need more. But then I got older and then 80 00:04:16,269 --> 00:04:17,690 Speaker 2: I started to understand, 81 00:04:17,980 --> 00:04:21,630 Speaker 2: I admit this is a very simplistic way of looking 82 00:04:21,640 --> 00:04:25,399 Speaker 2: at investing in gold as a rainy day asset. But 83 00:04:25,410 --> 00:04:28,549 Speaker 2: putting your money in safe havens have long been a 84 00:04:28,559 --> 00:04:32,440 Speaker 2: go to for many people. Gold are the precious metals, 85 00:04:32,450 --> 00:04:37,869 Speaker 2: some currencies, some defensive stocks. These are traditional safe havens. 86 00:04:37,880 --> 00:04:38,320 Speaker 2: But 87 00:04:38,649 --> 00:04:42,029 Speaker 2: do they really come with zero risks? That's what this 88 00:04:42,040 --> 00:04:46,320 Speaker 2: episode is. Hopefully going to answer with assistance from Vasu Menon, 89 00:04:46,488 --> 00:04:50,760 Speaker 2: managing director for investment strategy at OCBC. Welcome to the 90 00:04:50,769 --> 00:04:53,089 Speaker 2: money talks about K. Thank you very much. Thanks for 91 00:04:53,100 --> 00:04:55,390 Speaker 2: having me. Good to have you on the show. Let's 92 00:04:55,399 --> 00:04:58,769 Speaker 2: start with gold. What I started with just now, right? 93 00:04:58,799 --> 00:05:00,980 Speaker 2: So tell me, Vasu has my mom 94 00:05:01,309 --> 00:05:04,570 Speaker 2: and pretty much all moms been doing the right thing, 95 00:05:04,579 --> 00:05:08,309 Speaker 2: buying stacks of gold jewelry over the years when prices 96 00:05:08,320 --> 00:05:11,250 Speaker 2: were favorable. Well, you know, I think it makes sense 97 00:05:11,260 --> 00:05:13,760 Speaker 2: for people to buy gold. Absolutely makes sense. Just to 98 00:05:13,769 --> 00:05:16,649 Speaker 2: put things in perspective, the supply of gold in the 99 00:05:16,660 --> 00:05:20,979 Speaker 2: world is limited to 3.5 Olympic size swimming pools. And 100 00:05:20,988 --> 00:05:22,789 Speaker 2: that's not a, that's not a lot. Exactly. So there's 101 00:05:22,799 --> 00:05:27,010 Speaker 2: a very limited supply of gold worldwide. On the other hand, 102 00:05:27,019 --> 00:05:29,890 Speaker 2: demand for gold has increased quite a lot 103 00:05:30,299 --> 00:05:32,989 Speaker 2: in the last few years. Ok. Put aside individuals, just 104 00:05:33,000 --> 00:05:35,529 Speaker 2: look at central banks, central banks have been trying to 105 00:05:35,540 --> 00:05:39,410 Speaker 2: diversify their holdings of assets away from the US dollar, 106 00:05:39,609 --> 00:05:43,839 Speaker 2: which something will depreciate over time towards other assets as well. 107 00:05:44,040 --> 00:05:46,500 Speaker 2: And one of the assets they've been buying in quite 108 00:05:46,510 --> 00:05:49,399 Speaker 2: a significant amount has been gold. In fact, the purchase 109 00:05:49,410 --> 00:05:52,000 Speaker 2: of gold in 2022 hit a record high. 110 00:05:52,320 --> 00:05:55,489 Speaker 2: And in the first nine months of last year, you 111 00:05:55,500 --> 00:05:59,459 Speaker 2: had 800 tons of gold being bought and that's a 14% 112 00:05:59,470 --> 00:06:03,469 Speaker 2: increase over the same period in 2023. So probably we 113 00:06:03,480 --> 00:06:07,529 Speaker 2: had another record deal of purchases of gold from institutions 114 00:06:07,540 --> 00:06:11,488 Speaker 2: in 2023. So that's the institutional side of things, not 115 00:06:11,500 --> 00:06:14,820 Speaker 2: just central banks pension funds and but from the individual perspective, 116 00:06:14,839 --> 00:06:15,678 Speaker 2: there's a greater way 117 00:06:15,976 --> 00:06:19,286 Speaker 2: towards the benefits of gold. Why is gold appealing? Right. 118 00:06:19,395 --> 00:06:22,075 Speaker 2: Number one, I think gold offers you what they call 119 00:06:22,085 --> 00:06:25,585 Speaker 2: zero carry or zero yield. You don't get dividend yield 120 00:06:25,596 --> 00:06:28,626 Speaker 2: from gold like you do when you buy stocks or bonds, right? 121 00:06:28,635 --> 00:06:31,545 Speaker 2: So when interest rates come down, which are likely to 122 00:06:31,555 --> 00:06:33,555 Speaker 2: happen in the next 2 to 3 years, that will 123 00:06:33,565 --> 00:06:37,085 Speaker 2: enhance the appeal of gold because it's all relative, right? 124 00:06:37,096 --> 00:06:39,104 Speaker 2: And I think the other factor that also August. Well, 125 00:06:39,115 --> 00:06:39,165 Speaker 2: for 126 00:06:39,231 --> 00:06:41,911 Speaker 2: goal is the fact that if central banks cut interest rates, 127 00:06:41,921 --> 00:06:43,682 Speaker 2: which look likely in the next 2 to 3 years, 128 00:06:43,861 --> 00:06:47,212 Speaker 2: the US dollar is likely to weaken, goal is priced 129 00:06:47,221 --> 00:06:51,402 Speaker 2: in US dollars. And that makes goal more attractive, affordable. 130 00:06:51,571 --> 00:06:54,291 Speaker 2: And again, that spurs demand for gold. So cheaper dollar 131 00:06:54,302 --> 00:06:57,252 Speaker 2: equals cheaper, go cheaper dollar equals cheaper goal and therefore 132 00:06:57,261 --> 00:06:59,332 Speaker 2: a greater demand for gold. And of course, the third 133 00:06:59,342 --> 00:07:02,571 Speaker 2: factor is the world we're living in is a highly 134 00:07:02,890 --> 00:07:06,549 Speaker 2: uncertain place, both from a political standpoint, as well as 135 00:07:06,559 --> 00:07:09,619 Speaker 2: economic standpoint. And I've been in the industry, you know, 136 00:07:09,630 --> 00:07:12,670 Speaker 2: looking at investment markets for the last more than 34 years. 137 00:07:13,010 --> 00:07:14,790 Speaker 2: And I can tell you that I've never seen so 138 00:07:14,799 --> 00:07:18,369 Speaker 2: many moving parts at one time. So you've got crazy. Yeah, 139 00:07:18,380 --> 00:07:21,190 Speaker 2: so it's crazy. We've got so much happening around the world, 140 00:07:21,200 --> 00:07:23,850 Speaker 2: so many moving parts. And so again, investors are looking 141 00:07:23,859 --> 00:07:24,510 Speaker 2: for something 142 00:07:24,829 --> 00:07:27,119 Speaker 2: where the value they believe will hold in the long 143 00:07:27,130 --> 00:07:30,260 Speaker 2: term gold is limited in supply. So you know, individuals 144 00:07:30,269 --> 00:07:33,209 Speaker 2: as well buying gold because there's a greater awareness about 145 00:07:33,220 --> 00:07:35,769 Speaker 2: the fact that gold is a safe haven, as you said, 146 00:07:36,000 --> 00:07:39,010 Speaker 2: offers you some protection in the event of uncertainty, think 147 00:07:39,019 --> 00:07:42,359 Speaker 2: of gold as an insurance policy right? Within your portfolio, 148 00:07:42,570 --> 00:07:46,470 Speaker 2: you want to have some insurance, some exposure to something 149 00:07:46,480 --> 00:07:48,790 Speaker 2: that gives you some degree of protect, 150 00:07:49,226 --> 00:07:53,216 Speaker 2: right? And not everything is thrown into highly risky assets, right? 151 00:07:53,226 --> 00:07:55,795 Speaker 2: So treat gold as an insurance policy. Have some of it, 152 00:07:55,996 --> 00:07:59,156 Speaker 2: but don't over investigate. Right. Ok. That's a good point. Actually. 153 00:07:59,165 --> 00:08:02,246 Speaker 2: Think of it as just a cover. That's really rightfully right. 154 00:08:02,256 --> 00:08:05,186 Speaker 2: You said we keep hearing about gold and how resilient 155 00:08:05,196 --> 00:08:07,526 Speaker 2: it is as a commodity. And as you said, the 156 00:08:07,536 --> 00:08:10,865 Speaker 2: US dollar is weakening. So gold is something that thrives 157 00:08:10,876 --> 00:08:12,786 Speaker 2: in financial instability. 158 00:08:12,881 --> 00:08:18,391 Speaker 2: Those rate cuts weaker economic performances expected in 2024 geopolitics, 159 00:08:18,402 --> 00:08:21,291 Speaker 2: as you said, also all a combination for a year 160 00:08:21,302 --> 00:08:25,932 Speaker 2: of uncertainty. What's the reason for the resilience of goal 161 00:08:25,962 --> 00:08:29,941 Speaker 2: compared to say silver, for example? Well, again, goal is 162 00:08:29,951 --> 00:08:33,391 Speaker 2: something that has a higher profile. Silver is also linked 163 00:08:33,401 --> 00:08:36,822 Speaker 2: to how economies do. It's sometimes deemed as an industrial 164 00:08:36,908 --> 00:08:39,557 Speaker 2: metal. And so if the global economy slow down, then 165 00:08:39,567 --> 00:08:43,648 Speaker 2: the demand for silver can also slow down for industrial use, right? 166 00:08:43,658 --> 00:08:46,796 Speaker 2: So the outlook for silver is less clear compared to go, 167 00:08:46,807 --> 00:08:49,588 Speaker 2: go on. The other hand, usually does not have any 168 00:08:49,598 --> 00:08:54,788 Speaker 2: industrial application less tight to the economic cycle. Understood. So, 169 00:08:54,797 --> 00:08:57,877 Speaker 2: but if you look at 2023 although stock markets and 170 00:08:57,888 --> 00:09:00,227 Speaker 2: bond markets ended the year on a higher note, if 171 00:09:00,237 --> 00:09:00,848 Speaker 2: you had a chart 172 00:09:01,203 --> 00:09:03,994 Speaker 2: of the stock and bond markets in 2023 what is 173 00:09:04,033 --> 00:09:07,184 Speaker 2: a roller coaster ride? It's like being in universal studio 174 00:09:07,193 --> 00:09:09,604 Speaker 2: taking the roller coaster ride, right? It wasn't a smooth 175 00:09:09,614 --> 00:09:12,583 Speaker 2: ride and that's the kind of environment that gold typically 176 00:09:12,593 --> 00:09:15,054 Speaker 2: tends to do well in. Right. And that's exactly what 177 00:09:15,064 --> 00:09:16,953 Speaker 2: happened last year. So it really just boils down to 178 00:09:16,963 --> 00:09:19,573 Speaker 2: the profile of gold. That's just how gold behaves. Exactly. 179 00:09:19,583 --> 00:09:21,953 Speaker 2: That's the way go behaves. It tends to do well 180 00:09:21,963 --> 00:09:24,874 Speaker 2: when you have lots of volatility and uncertainty. But 181 00:09:25,179 --> 00:09:28,349 Speaker 2: the other factor that benefited goal, especially towards the end 182 00:09:28,359 --> 00:09:31,979 Speaker 2: of last year is the very sharp decline in us 183 00:09:31,989 --> 00:09:35,190 Speaker 2: bond yields, right? So the market started taking a view 184 00:09:35,200 --> 00:09:37,640 Speaker 2: that central banks are going to turn Dovish. They're going 185 00:09:37,650 --> 00:09:40,760 Speaker 2: to pivot in 2024 they're going to cut rates. And 186 00:09:40,770 --> 00:09:42,840 Speaker 2: what we saw was as a consequence of that us 187 00:09:42,849 --> 00:09:44,400 Speaker 2: 10 year bond yields came off from like 188 00:09:44,760 --> 00:09:48,510 Speaker 2: 5% to below 4%. That's a very sharp decline of 189 00:09:48,520 --> 00:09:51,030 Speaker 2: more than 1% in a matter of like two months 190 00:09:51,039 --> 00:09:54,549 Speaker 2: or so. And that gave gold a big boost. No 191 00:09:54,559 --> 00:09:57,039 Speaker 2: wonder we saw those spikes in gold prices towards the 192 00:09:57,049 --> 00:09:59,270 Speaker 2: end of the year precisely. But on the other hand, 193 00:09:59,539 --> 00:10:02,320 Speaker 2: if you look at 2022 when the fed started hiking 194 00:10:02,330 --> 00:10:05,869 Speaker 2: rates sharply, guess what happened, go, coal prices fell 20%. 195 00:10:06,150 --> 00:10:09,478 Speaker 2: So while we say it's a safe haven in reality, 196 00:10:09,489 --> 00:10:13,130 Speaker 2: its price is also determined by factors that are not 197 00:10:13,140 --> 00:10:18,369 Speaker 2: just linked to crisis and turmoil, but also sometimes economic fundamentals, 198 00:10:18,380 --> 00:10:21,640 Speaker 2: especially interest rates because bear in mind goal offers you 199 00:10:21,650 --> 00:10:24,950 Speaker 2: zero carry or zero yield. And therefore, when interest rates 200 00:10:24,960 --> 00:10:25,599 Speaker 2: are going up, 201 00:10:25,969 --> 00:10:28,640 Speaker 2: then there's less reason for investors to invest in gold 202 00:10:28,650 --> 00:10:30,270 Speaker 2: when they can actually put their money into other asset 203 00:10:30,280 --> 00:10:33,710 Speaker 2: classes like stocks and bonds that give them pretty good yield. Right? 204 00:10:33,719 --> 00:10:36,330 Speaker 2: So it's not the tough cookie. We all thought it was. 205 00:10:36,340 --> 00:10:38,988 Speaker 2: There is a vulnerability definitely, which is why you should 206 00:10:39,000 --> 00:10:42,429 Speaker 2: not over invests in it. Treat it as a insurance policy, right? 207 00:10:42,440 --> 00:10:45,239 Speaker 2: Treat it as a portfolio diversified, have some of it 208 00:10:45,250 --> 00:10:47,369 Speaker 2: in a portfolio. Yeah, but not all of it don't 209 00:10:47,380 --> 00:10:49,859 Speaker 2: go all in on it, of course. Ok. So let's 210 00:10:49,869 --> 00:10:53,219 Speaker 2: come back to that concept of safe haven assets, right? 211 00:10:53,440 --> 00:10:55,549 Speaker 2: How would you describe them, 212 00:10:56,140 --> 00:10:59,238 Speaker 2: the value of safe assets typically tend to hold or 213 00:10:59,250 --> 00:11:03,679 Speaker 2: appreciate during an economic downturn during an economic crisis, during 214 00:11:03,690 --> 00:11:08,599 Speaker 2: a financial crisis, during periods of political upheaval and turmoil. 215 00:11:08,849 --> 00:11:12,919 Speaker 2: So again, they offer you a backstop, they offer you 216 00:11:12,929 --> 00:11:15,570 Speaker 2: some degree of protection in a portfolio in the event 217 00:11:15,690 --> 00:11:20,450 Speaker 2: of severe uncertainty and crisis. So that's what safe havens are. 218 00:11:20,469 --> 00:11:22,489 Speaker 2: They typically tend to hold up well, in terms of 219 00:11:22,500 --> 00:11:25,080 Speaker 2: value and even appreciate during times of crisis. 220 00:11:25,770 --> 00:11:29,020 Speaker 2: So when it comes to gold, it's a very low 221 00:11:29,030 --> 00:11:31,820 Speaker 2: or no, almost no yield. So when it comes to 222 00:11:31,830 --> 00:11:34,900 Speaker 2: the other safe havens, are we looking at some kind 223 00:11:34,909 --> 00:11:37,909 Speaker 2: of yield? Would you say that these are must haves 224 00:11:37,919 --> 00:11:40,390 Speaker 2: in your portfolio? You've got quite a number of safe 225 00:11:40,400 --> 00:11:42,270 Speaker 2: haven assets out there? If you pick the currency 226 00:11:42,364 --> 00:11:45,344 Speaker 2: market, for example, the Japanese Yen is typically seen as 227 00:11:45,364 --> 00:11:48,195 Speaker 2: a safe haven asset. The Swiss franc is seen as 228 00:11:48,265 --> 00:11:50,835 Speaker 2: a safe haven an asset. I think the Japanese Yen, 229 00:11:50,844 --> 00:11:54,363 Speaker 2: for example, looks interesting right now because the Japanese government 230 00:11:54,375 --> 00:11:57,655 Speaker 2: has adopted ultra loose monetary policy. While other central banks 231 00:11:57,664 --> 00:11:58,794 Speaker 2: were hiking rates, they were, 232 00:11:59,099 --> 00:12:01,460 Speaker 2: you know, adopting ultra, that's where I'm going for my 233 00:12:01,469 --> 00:12:04,309 Speaker 2: holiday in March. Precisely. I think more than half of 234 00:12:04,320 --> 00:12:07,150 Speaker 2: Singapore is probably in Japan last November, December, right? Because 235 00:12:07,159 --> 00:12:09,919 Speaker 2: the yen is so weak but nothing stays down forever. 236 00:12:09,929 --> 00:12:13,919 Speaker 2: So come 2425 inflation picks up in Japan and the 237 00:12:13,929 --> 00:12:18,390 Speaker 2: Japanese economy is gaining traction, find stability that inspires confidence 238 00:12:18,400 --> 00:12:21,659 Speaker 2: in the central bank to start hiking rates a bit 239 00:12:21,669 --> 00:12:23,080 Speaker 2: gradually that we 240 00:12:23,166 --> 00:12:26,366 Speaker 2: thing is going to drive the Japanese Yen higher. And 241 00:12:26,375 --> 00:12:28,736 Speaker 2: of course, with so much happening this year, we got 242 00:12:28,745 --> 00:12:32,885 Speaker 2: 40 national elections happening this year. It must be a record. 243 00:12:32,895 --> 00:12:36,705 Speaker 2: It's a record, 40 national elections covering 40% of the 244 00:12:36,716 --> 00:12:39,226 Speaker 2: world population. Of course, the big one, the big one, 245 00:12:39,236 --> 00:12:41,346 Speaker 2: Andrea is the one at the end of this year 246 00:12:41,356 --> 00:12:44,064 Speaker 2: with the US elections. And the big question is whether 247 00:12:44,075 --> 00:12:46,745 Speaker 2: Trump is going to make a comeback in 2.0? People 248 00:12:46,755 --> 00:12:47,145 Speaker 2: don't often 249 00:12:47,231 --> 00:12:49,280 Speaker 2: I think that these things don't affect the markets. They 250 00:12:49,291 --> 00:12:51,931 Speaker 2: actually do, they do impact the market quite significantly, you know, 251 00:12:51,942 --> 00:12:54,312 Speaker 2: but for example, if Trump comes back it could mean 252 00:12:54,322 --> 00:12:56,692 Speaker 2: a period of uncertainty volatility which is going to be 253 00:12:56,702 --> 00:13:00,290 Speaker 2: good news for gold. So I think looking ahead this 254 00:13:00,302 --> 00:13:02,471 Speaker 2: year goal and of course the Japanese Yen as well, 255 00:13:02,481 --> 00:13:04,580 Speaker 2: not just go but other safe haven assets as well. 256 00:13:04,591 --> 00:13:06,530 Speaker 2: So talking about the Japanese Yen, you know, if the 257 00:13:06,541 --> 00:13:09,442 Speaker 2: central bank changes policy increases interest rates, that's going to 258 00:13:09,452 --> 00:13:11,331 Speaker 2: be good for the yen. So we see the yen 259 00:13:11,421 --> 00:13:13,502 Speaker 2: appreciating more than the Swiss Franc 260 00:13:13,729 --> 00:13:17,030 Speaker 2: this year. Why is the Japanese Yen a safe haven currency? 261 00:13:17,039 --> 00:13:18,580 Speaker 2: That was going to be my question. Yeah, that's right. 262 00:13:18,590 --> 00:13:19,979 Speaker 2: You know, I mean, I saw that coming and I 263 00:13:19,989 --> 00:13:22,500 Speaker 2: thought I better answer before you ask it. And you know, 264 00:13:22,510 --> 00:13:24,229 Speaker 2: I think if you look at Japan, it is the 265 00:13:24,239 --> 00:13:27,109 Speaker 2: largest creditor nation in the world. What does that mean? 266 00:13:27,119 --> 00:13:30,150 Speaker 2: What that means is that they own more external assets 267 00:13:30,390 --> 00:13:33,760 Speaker 2: then they owe. So if you take the amount of 268 00:13:33,770 --> 00:13:38,130 Speaker 2: assets that the Japanese economy owns compared to what it owes, 269 00:13:38,200 --> 00:13:40,299 Speaker 2: they own a lot more compared to what they owe. 270 00:13:40,309 --> 00:13:43,010 Speaker 2: So lower debt and higher assets. That's right. So you 271 00:13:43,020 --> 00:13:45,359 Speaker 2: think of it as when they invest in overseas markets, 272 00:13:45,369 --> 00:13:49,000 Speaker 2: as assets, when they owe overseas markets, overseas investors money, 273 00:13:49,010 --> 00:13:52,280 Speaker 2: that's liability, the assets minus liability, that amount comes up 274 00:13:52,289 --> 00:13:57,770 Speaker 2: to more than $410 trillion right? That's a 275 00:13:58,070 --> 00:14:01,669 Speaker 2: amount, right? So that to have in the pocket, nice 276 00:14:01,710 --> 00:14:03,709 Speaker 2: to have in the pocket and that's the largest in 277 00:14:03,719 --> 00:14:07,069 Speaker 2: the world. You know, so that provides the currency with 278 00:14:07,080 --> 00:14:09,260 Speaker 2: some degree of backstop. Now, the other thing that works 279 00:14:09,270 --> 00:14:10,469 Speaker 2: in favor of the currency is the fact that the 280 00:14:10,479 --> 00:14:14,210 Speaker 2: Japanese economy enjoys what they call a current account surplus, right? 281 00:14:14,219 --> 00:14:16,840 Speaker 2: And that gives you an idea of the balance in 282 00:14:16,849 --> 00:14:19,359 Speaker 2: terms of trade and services between Japan and the rest 283 00:14:19,369 --> 00:14:23,609 Speaker 2: of the world. And they've got a current account surplus. Again, 284 00:14:23,619 --> 00:14:25,340 Speaker 2: typically that underpins 285 00:14:25,539 --> 00:14:28,919 Speaker 2: the currency and Japan is now seeing a period of 286 00:14:28,929 --> 00:14:32,179 Speaker 2: political stability generally, as I said, icing on the cake 287 00:14:32,190 --> 00:14:33,770 Speaker 2: is that interest rates probably going to go up in 288 00:14:33,780 --> 00:14:36,880 Speaker 2: Japan after being ultra loose, ultra low for many years, 289 00:14:36,890 --> 00:14:39,750 Speaker 2: that's going to be the tail wind for the Japanese currency. 290 00:14:39,760 --> 00:14:42,679 Speaker 2: So put all that together. Again, the Japanese currency is 291 00:14:42,690 --> 00:14:45,369 Speaker 2: something to bear in mind. Of course, here in Singapore, 292 00:14:45,380 --> 00:14:48,619 Speaker 2: investors have been gravitating towards safe havens like t bills, 293 00:14:48,630 --> 00:14:52,520 Speaker 2: treasury bills, treasury bills, six months, 12 month treasury bills 294 00:14:52,950 --> 00:14:56,409 Speaker 2: and putting money into Singapore savings bonds, those are probably 295 00:14:56,559 --> 00:15:00,549 Speaker 2: less risky, less volatile, but you also don't enjoy a 296 00:15:00,559 --> 00:15:04,169 Speaker 2: lot of capital upside from those things. With the Japanese Yen, 297 00:15:04,179 --> 00:15:06,869 Speaker 2: you can actually enjoy capital upside if the Japanese currency 298 00:15:06,880 --> 00:15:10,190 Speaker 2: appreciates or if gold appreciates but with T bills and 299 00:15:10,200 --> 00:15:12,900 Speaker 2: with Singapore savings bonds, you don't enjoy the capital upside 300 00:15:12,909 --> 00:15:16,020 Speaker 2: and what you're in it for is really just the yield. Right. Right. So, 301 00:15:16,030 --> 00:15:19,650 Speaker 2: so different safe havens have different characteristics. If I may 302 00:15:19,659 --> 00:15:20,369 Speaker 2: throw one more 303 00:15:20,469 --> 00:15:24,440 Speaker 2: safe haven, you can even think of investment grade highly 304 00:15:24,450 --> 00:15:28,159 Speaker 2: rated corporate bonds, right? As to some extent offering you 305 00:15:28,169 --> 00:15:30,989 Speaker 2: safe passage as well. Ok. So for example, if you 306 00:15:31,000 --> 00:15:33,309 Speaker 2: buy a bond and the bond says a 10 out 307 00:15:33,320 --> 00:15:35,280 Speaker 2: of five years and it's a good bond, it's a 308 00:15:35,289 --> 00:15:37,950 Speaker 2: good company with a very strong balance sheet, right? The 309 00:15:37,960 --> 00:15:41,710 Speaker 2: possibility of default is quite low, right? So if you 310 00:15:41,719 --> 00:15:45,330 Speaker 2: hold that bond till maturity, right, what happens is that 311 00:15:45,340 --> 00:15:47,479 Speaker 2: you continue to clip the coupon or the yield on 312 00:15:47,489 --> 00:15:47,890 Speaker 2: the bond 313 00:15:48,169 --> 00:15:50,869 Speaker 2: and then on maturity, the the company doesn't go bust 314 00:15:50,880 --> 00:15:53,669 Speaker 2: you get your money back. Ok. Right. So the key 315 00:15:53,679 --> 00:15:57,090 Speaker 2: thing here is the company has to be of sound fundamentals, 316 00:15:57,099 --> 00:15:59,049 Speaker 2: it doesn't go bust, you get your money back. So 317 00:15:59,059 --> 00:16:01,969 Speaker 2: if you put your money into strong companies, very strong 318 00:16:01,979 --> 00:16:04,890 Speaker 2: companies with strong balance sheets, what we call investment grade bonds, right, 319 00:16:04,909 --> 00:16:06,840 Speaker 2: then you know, the good chance of you getting your 320 00:16:06,849 --> 00:16:08,559 Speaker 2: money back at the end of the tenner. But of course, 321 00:16:08,570 --> 00:16:09,469 Speaker 2: along the way, 322 00:16:09,890 --> 00:16:11,710 Speaker 2: the price of these bonds may go up and down. 323 00:16:11,719 --> 00:16:15,030 Speaker 2: But if you're holding it till the end, then you 324 00:16:15,080 --> 00:16:17,770 Speaker 2: get your money back. Do they tend to be from 325 00:16:17,780 --> 00:16:21,750 Speaker 2: specific sectors? Not necessarily, it is very company specific, you 326 00:16:21,760 --> 00:16:23,260 Speaker 2: can go down to looking at the company and seeing 327 00:16:23,270 --> 00:16:25,549 Speaker 2: whether you know it's got a very strong balance sheet, 328 00:16:25,719 --> 00:16:27,469 Speaker 2: whether it's got a lot of cash in his books, 329 00:16:27,575 --> 00:16:30,744 Speaker 2: whether it's got a low debt level or debt to 330 00:16:30,755 --> 00:16:32,854 Speaker 2: equity ratio in his book, whether it's in a business 331 00:16:32,864 --> 00:16:36,275 Speaker 2: that is relatively stable, able to send economic downturns. And 332 00:16:36,284 --> 00:16:38,255 Speaker 2: there are companies like that out there. Now, the difference 333 00:16:38,265 --> 00:16:40,195 Speaker 2: between buying a bond like this, say with a five 334 00:16:40,205 --> 00:16:43,065 Speaker 2: year tender and buying a stock with over a five 335 00:16:43,075 --> 00:16:44,755 Speaker 2: year horizon is that you can buy a stock at 336 00:16:44,765 --> 00:16:46,924 Speaker 2: the dollar. But at the end of five years, it's 337 00:16:46,934 --> 00:16:49,304 Speaker 2: possible the stock will be 60 cents and there's no 338 00:16:49,315 --> 00:16:50,875 Speaker 2: light at the end of the tunnel because you don't 339 00:16:50,885 --> 00:16:52,164 Speaker 2: know when the 60 cents is going to go back 340 00:16:52,174 --> 00:16:55,114 Speaker 2: to up to the bond. At the end of that 341 00:16:55,125 --> 00:16:55,905 Speaker 2: five year 10, 342 00:16:56,479 --> 00:16:59,200 Speaker 2: you get your money back. So at least at least 343 00:16:59,210 --> 00:17:02,469 Speaker 2: your money back and that contingent on the company staying afloat. 344 00:17:02,479 --> 00:17:05,040 Speaker 2: So again, you can, in some ways, if you're prepared 345 00:17:05,050 --> 00:17:08,609 Speaker 2: to whole tail maturity of a bond, then I think 346 00:17:08,619 --> 00:17:11,449 Speaker 2: you can also see it to some degree as a safe, 347 00:17:11,660 --> 00:17:14,959 Speaker 2: fascinating. I didn't think of corporate bonds as a safe 348 00:17:14,969 --> 00:17:17,560 Speaker 2: haven asset, but I think it's something to watch for sure. Yeah, 349 00:17:17,699 --> 00:17:21,109 Speaker 2: investment grade bonds. So, back to current CEO, so you 350 00:17:21,119 --> 00:17:23,879 Speaker 2: talked pretty extensively about the Japanese Yen and we all 351 00:17:23,890 --> 00:17:26,290 Speaker 2: know that it's a very attractive investment right now. What 352 00:17:26,300 --> 00:17:26,599 Speaker 2: about 353 00:17:27,199 --> 00:17:29,670 Speaker 2: the Swiss Franc? And I think in general, what I 354 00:17:29,680 --> 00:17:33,500 Speaker 2: want to know is why do these currencies? The US 355 00:17:33,510 --> 00:17:37,310 Speaker 2: D also is considered a safe haven investment. The Swiss franc, 356 00:17:37,319 --> 00:17:39,770 Speaker 2: as you say, why are these safest currencies in the 357 00:17:39,780 --> 00:17:42,300 Speaker 2: world to invest in in the first place for quite 358 00:17:42,310 --> 00:17:44,520 Speaker 2: a number of reasons? Number one, in the case of 359 00:17:44,530 --> 00:17:48,020 Speaker 2: the Swiss government, it's relatively stable. You have political stability 360 00:17:48,030 --> 00:17:49,959 Speaker 2: in Switzerland, right. Number two, I think 361 00:17:50,079 --> 00:17:53,380 Speaker 2: you have a Switzerland that is politically independent generally. So 362 00:17:53,390 --> 00:17:55,500 Speaker 2: it is not plugged in to some extent in the 363 00:17:55,510 --> 00:17:58,810 Speaker 2: global political turmoil. It stands on its own. It takes 364 00:17:58,819 --> 00:18:01,849 Speaker 2: a stand that is neutral, independent. What about the Switzerland 365 00:18:01,859 --> 00:18:04,390 Speaker 2: of Asia? Singapore? Well, you know, I mean, exactly, I 366 00:18:04,400 --> 00:18:06,199 Speaker 2: was going to come to that, you know, eventually that's 367 00:18:06,209 --> 00:18:09,270 Speaker 2: something that we sometimes see as a safe haven as well. 368 00:18:09,400 --> 00:18:12,489 Speaker 2: So Singapore government bonds are pretty good safe haven in 369 00:18:12,500 --> 00:18:13,020 Speaker 2: my view 370 00:18:13,359 --> 00:18:16,160 Speaker 2: because, you know, the government has got solid balance sheet. 371 00:18:16,250 --> 00:18:19,140 Speaker 2: We've got good political stability over here. So that's something 372 00:18:19,150 --> 00:18:21,069 Speaker 2: to think about. And of course, you know, some people 373 00:18:21,079 --> 00:18:23,959 Speaker 2: even see the Singapore stock market as a safe haven 374 00:18:23,969 --> 00:18:28,010 Speaker 2: among other stock markets because you don't see the extreme 375 00:18:28,020 --> 00:18:30,150 Speaker 2: volatility in the Singapore stock market that you see in 376 00:18:30,160 --> 00:18:32,468 Speaker 2: other stock market. It's almost as if a boring day here. 377 00:18:32,479 --> 00:18:35,790 Speaker 2: It's a boring market. But, you know, if you're happy 378 00:18:35,800 --> 00:18:38,119 Speaker 2: with the yield that the market offers, you then, you know, 379 00:18:38,130 --> 00:18:40,629 Speaker 2: I think, hey, it's a market that you want to 380 00:18:40,640 --> 00:18:41,599 Speaker 2: have in your portfolio because 381 00:18:42,000 --> 00:18:44,129 Speaker 2: it doesn't see the same kind of wild swings that 382 00:18:44,140 --> 00:18:47,560 Speaker 2: you see out of Chinese equities. Hong Kong stock market, 383 00:18:47,569 --> 00:18:50,989 Speaker 2: South Korean Taiwanese equities because it's a boring market, no doubt. 384 00:18:51,000 --> 00:18:56,420 Speaker 2: But it offers you yield decent yield and relative stability again, relative. 385 00:18:56,430 --> 00:18:58,640 Speaker 2: But of course, the Singapore stock market is not as 386 00:18:58,650 --> 00:19:01,790 Speaker 2: safe as say a government bond, it does go up 387 00:19:01,800 --> 00:19:04,290 Speaker 2: and down and as long as investors keep that in mind, 388 00:19:04,420 --> 00:19:06,409 Speaker 2: then I think you can see that way. But in 389 00:19:06,420 --> 00:19:07,290 Speaker 2: the case of Switzerland, 390 00:19:07,530 --> 00:19:09,579 Speaker 2: you know, it's got a current account surplus like Japan, 391 00:19:09,739 --> 00:19:13,400 Speaker 2: its banking system is sound and solid. And the thing 392 00:19:13,410 --> 00:19:15,938 Speaker 2: about the US dollar Japanese Yen and Swiss Franc is 393 00:19:15,949 --> 00:19:18,829 Speaker 2: they are all very liquid currencies. What does that mean? 394 00:19:18,839 --> 00:19:21,800 Speaker 2: That means it's easy to buy and sell. They are 395 00:19:21,810 --> 00:19:24,670 Speaker 2: widely traded in global markets. And that's important, 396 00:19:25,420 --> 00:19:27,859 Speaker 2: Swiss Franc, even a Swiss Franc, it's a very popular currency, 397 00:19:27,869 --> 00:19:30,000 Speaker 2: it's widely traded. And that's important because when you have 398 00:19:30,010 --> 00:19:33,680 Speaker 2: pension funds and big fund managers buying these currencies, they 399 00:19:33,689 --> 00:19:36,819 Speaker 2: don't buy in small amounts, they buy in billions. And 400 00:19:36,829 --> 00:19:39,050 Speaker 2: when they sell, they also need to sell in billions 401 00:19:39,060 --> 00:19:40,699 Speaker 2: and they need to have really buyers who are prepared 402 00:19:40,709 --> 00:19:42,859 Speaker 2: to take it off their books. And I think because 403 00:19:42,869 --> 00:19:43,239 Speaker 2: of that 404 00:19:43,430 --> 00:19:47,949 Speaker 2: these currencies are more liquid, more tradable. And so therefore 405 00:19:47,959 --> 00:19:51,179 Speaker 2: investors do see them as safe havens. The euro as 406 00:19:51,189 --> 00:19:53,649 Speaker 2: well is quite tradable. I was about to ask. But 407 00:19:53,660 --> 00:19:55,680 Speaker 2: the difference is in Europe, I think it's going through 408 00:19:55,689 --> 00:19:58,479 Speaker 2: a difficult period right now. Politically, it is going through 409 00:19:58,489 --> 00:20:00,869 Speaker 2: a difficult period. You don't have the political stability that 410 00:20:00,880 --> 00:20:04,689 Speaker 2: you see in Europe compared to Japan Switzerland. And even 411 00:20:04,699 --> 00:20:07,089 Speaker 2: to some extent in relative terms, the US. 412 00:20:07,244 --> 00:20:09,714 Speaker 2: Yeah. Right. Because in the US, even if a president 413 00:20:09,724 --> 00:20:13,194 Speaker 2: comes to power, he's checked by Congress, there's a check 414 00:20:13,204 --> 00:20:15,594 Speaker 2: and balance in place. He doesn't have a plan check, 415 00:20:15,604 --> 00:20:17,915 Speaker 2: a free hand. So he doesn't have a free play 416 00:20:17,954 --> 00:20:20,104 Speaker 2: in Europe is different. You have the Ukraine war happening 417 00:20:20,114 --> 00:20:22,734 Speaker 2: right now. You have populism on the rise. So you know, 418 00:20:22,744 --> 00:20:25,285 Speaker 2: the investors don't see the Euro as a safe haven. 419 00:20:25,295 --> 00:20:28,574 Speaker 2: Got it, got it. Ok. So how do I invest 420 00:20:28,584 --> 00:20:30,854 Speaker 2: in currencies? And should I be hoarding 421 00:20:31,130 --> 00:20:34,448 Speaker 2: the Japanese Yen, the Swiss franc in a multi currency account, 422 00:20:34,459 --> 00:20:36,869 Speaker 2: for example. Well, there are various ways, I mean, what 423 00:20:36,880 --> 00:20:38,889 Speaker 2: you just highlighted is one way to invest some of 424 00:20:38,900 --> 00:20:41,170 Speaker 2: these currencies. Some would actually just go to the money 425 00:20:41,180 --> 00:20:43,929 Speaker 2: changer and change money. That's another way to do it. 426 00:20:43,989 --> 00:20:46,139 Speaker 2: I actually, you know, people do this. That's right. There 427 00:20:46,150 --> 00:20:48,708 Speaker 2: are platforms that allow you to buy and sell currencies. 428 00:20:48,719 --> 00:20:50,910 Speaker 2: So there are different ways. I think it's a matter 429 00:20:50,920 --> 00:20:53,250 Speaker 2: of talking to advisor and finding out what you're comfortable 430 00:20:53,260 --> 00:20:56,438 Speaker 2: with and what the costs involved are for each of 431 00:20:56,449 --> 00:20:57,899 Speaker 2: these options. If I were to do it on my 432 00:20:57,910 --> 00:20:58,439 Speaker 2: own without a 433 00:20:58,545 --> 00:21:00,454 Speaker 2: financial advisor. What do I need to look out for? 434 00:21:00,464 --> 00:21:03,435 Speaker 2: I think with currencies, you've got to be a bit 435 00:21:03,444 --> 00:21:06,395 Speaker 2: more careful. Don't over invests in it because currency markets 436 00:21:06,405 --> 00:21:09,064 Speaker 2: are volatile. Although the Japanese Yen is a safe haven. 437 00:21:09,074 --> 00:21:11,064 Speaker 2: It doesn't mean that you won't see volatility in the 438 00:21:11,074 --> 00:21:14,025 Speaker 2: Japanese currency. It is not boring. It is. Well, it's 439 00:21:14,035 --> 00:21:16,305 Speaker 2: been on a downward trend which is why many of 440 00:21:16,314 --> 00:21:19,244 Speaker 2: us in Japan exploring it is a travel destination. So 441 00:21:19,255 --> 00:21:23,584 Speaker 2: it is not immune from volatility and downward drifts. So 442 00:21:23,594 --> 00:21:25,813 Speaker 2: I think you want to keep your exposure 443 00:21:26,180 --> 00:21:29,189 Speaker 2: to some of these currencies. Not significant minimal. Don't over 444 00:21:29,199 --> 00:21:31,699 Speaker 2: invest in it. I think currency markets can be volatile 445 00:21:31,709 --> 00:21:35,949 Speaker 2: although we're quite positive in the Japanese. All right. Fantastic. Ok. 446 00:21:36,010 --> 00:21:38,619 Speaker 2: So I wanted to talk now about defensive stocks. So 447 00:21:38,630 --> 00:21:43,649 Speaker 2: you spoke briefly about stocks bonds, certain investment grade bonds 448 00:21:43,660 --> 00:21:46,879 Speaker 2: as well. I wanted to specifically talk about defensive stocks, 449 00:21:46,975 --> 00:21:50,036 Speaker 2: right? And they're known to be among the safer investments 450 00:21:50,046 --> 00:21:54,666 Speaker 2: to make. What exactly is a defensive stock, the characteristics 451 00:21:54,676 --> 00:21:57,145 Speaker 2: of it, which sectors they tend to be in. And 452 00:21:57,156 --> 00:22:01,336 Speaker 2: more importantly, why are they? I won't say safe but 453 00:22:01,345 --> 00:22:04,985 Speaker 2: safer than other stocks. I think it's difficult to generalize 454 00:22:04,994 --> 00:22:07,696 Speaker 2: in terms of sectors, but I think defensive 455 00:22:07,852 --> 00:22:10,941 Speaker 2: stocks will be companies with strong balance sheets. Ok. When 456 00:22:10,952 --> 00:22:12,620 Speaker 2: I mean, strong balance sheets, I mean, they've got to 457 00:22:12,631 --> 00:22:15,511 Speaker 2: have a sizable amount of cash on their balance sheet 458 00:22:15,561 --> 00:22:17,952 Speaker 2: they got very low levels of debt that makes them 459 00:22:17,962 --> 00:22:23,331 Speaker 2: less vulnerable to economic downturns. Ideally, they have a strong 460 00:22:23,342 --> 00:22:27,212 Speaker 2: market share in whatever industry they are in big market 461 00:22:27,222 --> 00:22:28,631 Speaker 2: share in whatever industry they are in. 462 00:22:29,109 --> 00:22:32,589 Speaker 2: And perhaps to some extent, they have some degree of 463 00:22:32,599 --> 00:22:35,540 Speaker 2: following from global fund managers. In other words, they are, 464 00:22:35,599 --> 00:22:37,438 Speaker 2: they are blue chips, they are big companies to some 465 00:22:37,449 --> 00:22:39,530 Speaker 2: extent because they have a following and that provides you 466 00:22:39,540 --> 00:22:42,629 Speaker 2: with some degree of support, buying support to the tight turn. 467 00:22:42,910 --> 00:22:44,680 Speaker 2: So you put all that together. I think it makes 468 00:22:44,689 --> 00:22:48,170 Speaker 2: for defensive stock. They can come from different sectors, come 469 00:22:48,180 --> 00:22:50,208 Speaker 2: from the real estate sector, even 470 00:22:50,449 --> 00:22:53,420 Speaker 2: they can come from the telecommunication sector, health care as well, 471 00:22:53,430 --> 00:22:56,349 Speaker 2: health care as well. That's a fairly defensive industry. But again, 472 00:22:56,359 --> 00:22:58,709 Speaker 2: you have to go down to the devil is in 473 00:22:58,719 --> 00:23:01,560 Speaker 2: the details. You got to go and examine the balance 474 00:23:01,569 --> 00:23:03,469 Speaker 2: sheets of this company. So it takes a bit of research, right? 475 00:23:03,479 --> 00:23:05,938 Speaker 2: Don't just get drawn into healthcare because it's healthcare. You 476 00:23:05,949 --> 00:23:07,930 Speaker 2: got to look at the company, it's involving as well. 477 00:23:07,939 --> 00:23:11,300 Speaker 2: For example, if you're buying into a biotech company, that's 478 00:23:11,310 --> 00:23:13,770 Speaker 2: in the healthcare space, that can be quite risky. Yeah, 479 00:23:13,780 --> 00:23:17,069 Speaker 2: because there is some degree of innovation and risk, whatever 480 00:23:17,079 --> 00:23:17,400 Speaker 2: they are 481 00:23:17,810 --> 00:23:20,500 Speaker 2: venturing into may not bear fruit. And we've seen that 482 00:23:20,510 --> 00:23:23,260 Speaker 2: during the pandemic or rather just coming out of the pandemic, 483 00:23:23,270 --> 00:23:26,520 Speaker 2: there were pandemic darlings because they had to manufacture those vaccines. 484 00:23:26,530 --> 00:23:28,119 Speaker 2: But when those vaccines were out, 485 00:23:28,500 --> 00:23:30,849 Speaker 2: the share prices just started to fall. That's right. So 486 00:23:30,859 --> 00:23:32,420 Speaker 2: you got to be careful as well. You want to 487 00:23:32,430 --> 00:23:37,050 Speaker 2: buy companies where the business is steady state staple businesses, 488 00:23:37,140 --> 00:23:40,890 Speaker 2: hopefully that will be needed in good times and bad times. 489 00:23:40,949 --> 00:23:44,040 Speaker 2: So consumer staples some degree of health care again, depending 490 00:23:44,050 --> 00:23:46,989 Speaker 2: on the individual. So a lot of factors go into. 491 00:23:47,000 --> 00:23:49,520 Speaker 2: But I think the key thing is this, do your research, 492 00:23:49,890 --> 00:23:51,750 Speaker 2: you got to learn how to read balance sheets. If 493 00:23:51,760 --> 00:23:54,339 Speaker 2: not get the help from somebody, look at these companies carefully, 494 00:23:54,349 --> 00:23:56,640 Speaker 2: talk to people. Don't be in a hurry to jump 495 00:23:56,680 --> 00:23:56,920 Speaker 2: in 496 00:23:57,329 --> 00:23:59,709 Speaker 2: head long. Do your research before you actually get into 497 00:23:59,719 --> 00:24:02,569 Speaker 2: these companies. And I think a good practice is actually 498 00:24:02,579 --> 00:24:05,260 Speaker 2: write down why you invested in the company based on 499 00:24:05,270 --> 00:24:07,790 Speaker 2: some of these parameters. Interesting practice is that something you 500 00:24:07,800 --> 00:24:09,770 Speaker 2: do as well? That's something I do. I write myself 501 00:24:09,780 --> 00:24:13,260 Speaker 2: a proposal. I mean, not a five page proposal job 502 00:24:13,270 --> 00:24:15,400 Speaker 2: hazard is, you know, you tend to write long. No, no, no, 503 00:24:15,410 --> 00:24:17,829 Speaker 2: I give myself maybe half a page. I tell myself why. 504 00:24:17,839 --> 00:24:18,160 Speaker 2: So that 505 00:24:18,750 --> 00:24:20,839 Speaker 2: I know why I've gone in. It's a discipline. It 506 00:24:20,849 --> 00:24:24,369 Speaker 2: forces you to put your thoughts down on paper and 507 00:24:24,380 --> 00:24:26,399 Speaker 2: it forces you to do the research. It forces you 508 00:24:26,410 --> 00:24:28,280 Speaker 2: to do research and think through what you're doing because 509 00:24:28,290 --> 00:24:30,959 Speaker 2: sometimes we have blind spots. But when you start writing 510 00:24:30,969 --> 00:24:32,250 Speaker 2: it down, it becomes a bit more 511 00:24:32,829 --> 00:24:35,300 Speaker 2: difficult to miss a blind spot. It forces you to 512 00:24:35,310 --> 00:24:38,099 Speaker 2: commit to it. Right. Also, like, why you have to 513 00:24:38,109 --> 00:24:40,589 Speaker 2: ask yourself why you're doing this, put pen to paper 514 00:24:40,599 --> 00:24:43,270 Speaker 2: and then you realize, ok, something's missing here. I need 515 00:24:43,280 --> 00:24:47,069 Speaker 2: to address that. Exactly. So, it's a good habit, practice 516 00:24:47,079 --> 00:24:49,979 Speaker 2: a dog and something that the listeners can think about. 517 00:24:50,000 --> 00:24:52,640 Speaker 2: Absolutely something I'm going to think about. I did. I mean, 518 00:24:52,650 --> 00:24:54,609 Speaker 2: it's old school, right? You don't think about it because 519 00:24:54,619 --> 00:24:57,099 Speaker 2: it's old school, but it works. There's a reason for it. 520 00:24:57,295 --> 00:24:59,175 Speaker 2: Exactly. So, you know, when you do that, then you 521 00:24:59,185 --> 00:25:02,895 Speaker 2: get a clearer picture of why literally a picture precisely. 522 00:25:02,905 --> 00:25:04,655 Speaker 2: So I think that's important and that's something that a 523 00:25:04,665 --> 00:25:06,194 Speaker 2: lot of people don't do because what they do is 524 00:25:06,204 --> 00:25:10,764 Speaker 2: they see the investments in a modular fashion. Yes. So yeah. 525 00:25:10,775 --> 00:25:12,375 Speaker 2: So when we talk about safe havens is really about 526 00:25:12,385 --> 00:25:15,015 Speaker 2: protecting your downside. Yeah. So part of protecting your downside 527 00:25:15,025 --> 00:25:18,305 Speaker 2: goes beyond just buying safe havens, but also making sure 528 00:25:18,314 --> 00:25:21,535 Speaker 2: that you add an element of safety to your investment approach. OK. 529 00:25:21,829 --> 00:25:24,239 Speaker 2: That's a fantastic tip. That's going to be my key 530 00:25:24,250 --> 00:25:26,569 Speaker 2: takeaway from this conversation, not the fact that it's safe havens, 531 00:25:26,579 --> 00:25:29,780 Speaker 2: but I joke. So aside from going through my drawer, 532 00:25:29,790 --> 00:25:33,280 Speaker 2: counting my gold bracelets, checking on my Japanese saying, flipping 533 00:25:33,290 --> 00:25:34,879 Speaker 2: through my bank accounts, 534 00:25:35,439 --> 00:25:39,409 Speaker 2: where can I invest in safe haven assets? What platforms 535 00:25:39,420 --> 00:25:42,819 Speaker 2: are available to me? Do? I need necessarily to treat 536 00:25:42,829 --> 00:25:46,180 Speaker 2: them via a bank through a Robo advisor. I mean, 537 00:25:46,189 --> 00:25:48,819 Speaker 2: there are gold etfs now as well. I'm sure there 538 00:25:48,829 --> 00:25:51,869 Speaker 2: are currency etfs also to think about like, how do 539 00:25:51,880 --> 00:25:54,159 Speaker 2: I go about doing this? Ok. I think you can 540 00:25:54,170 --> 00:25:55,909 Speaker 2: do it through various platforms. Some of the things that 541 00:25:55,920 --> 00:25:59,599 Speaker 2: you mentioned are the platforms that the listeners can think about. 542 00:26:00,140 --> 00:26:02,919 Speaker 2: We had O CBC allow you to actually 543 00:26:03,290 --> 00:26:07,500 Speaker 2: invest in gold through our digital app. And we've also 544 00:26:07,510 --> 00:26:11,229 Speaker 2: got a precious metal account at CBC on our Robo 545 00:26:11,260 --> 00:26:13,599 Speaker 2: Invest platform. And we're not the only ones. I mean, 546 00:26:13,609 --> 00:26:17,160 Speaker 2: there are other banks that also offer solutions that allow 547 00:26:17,170 --> 00:26:20,010 Speaker 2: you to invest in gold for those who want something 548 00:26:20,020 --> 00:26:24,219 Speaker 2: that's more tradable. For example, the Spider F that's listed 549 00:26:24,229 --> 00:26:26,619 Speaker 2: on the SGX, right? It's available both in sing dollars 550 00:26:26,630 --> 00:26:27,400 Speaker 2: and US dollars. 551 00:26:27,920 --> 00:26:30,349 Speaker 2: That's something that has become quite popular. So there are 552 00:26:30,359 --> 00:26:33,819 Speaker 2: various options out there. Similarly, for currencies, you talked about 553 00:26:33,829 --> 00:26:37,060 Speaker 2: a multi currency account or even putting your money into 554 00:26:37,069 --> 00:26:42,260 Speaker 2: a savings account, foreign currency savings account, buying currencies on platforms, right? 555 00:26:42,270 --> 00:26:45,479 Speaker 2: Non-bank platforms going through money changer, changing money, which is 556 00:26:45,489 --> 00:26:48,170 Speaker 2: what I've done partly with my Japanese Yen because my 557 00:26:48,180 --> 00:26:49,939 Speaker 2: plans are, you know, the next couple of years, my 558 00:26:49,949 --> 00:26:51,290 Speaker 2: holiday destinations are going to be Japan. 559 00:26:51,845 --> 00:26:54,234 Speaker 2: I've actually changed quite a bit of Japanese Yen in 560 00:26:54,244 --> 00:26:56,805 Speaker 2: preparation because if I don't use it at least I 561 00:26:56,816 --> 00:26:59,645 Speaker 2: hopefully get to benefit from price appreciation of the yen 562 00:26:59,656 --> 00:27:02,005 Speaker 2: as well. Yeah, that's a good tip for me as well. 563 00:27:02,015 --> 00:27:03,955 Speaker 2: I only have so many months to save up for Basu. 564 00:27:04,725 --> 00:27:07,855 Speaker 2: Thanks so much for unpacking all of this, the world 565 00:27:07,865 --> 00:27:10,595 Speaker 2: of safe haven investments with me here on the money 566 00:27:10,605 --> 00:27:12,906 Speaker 2: talks podcast. You've been a great help. I'm gonna, I'm 567 00:27:12,916 --> 00:27:14,765 Speaker 2: gonna write down my investment proposals now. 568 00:27:15,161 --> 00:27:17,501 Speaker 2: Thanks for that tip and a big thank you to 569 00:27:17,511 --> 00:27:20,171 Speaker 2: you too. Listener. If you like this episode, you got 570 00:27:20,182 --> 00:27:22,942 Speaker 2: to show it, leave us a comment or a rating 571 00:27:22,952 --> 00:27:25,811 Speaker 2: on wherever you get your podcasts. If you want to 572 00:27:25,821 --> 00:27:29,251 Speaker 2: find us, we're streaming on Apple podcasts and Spotify as 573 00:27:29,261 --> 00:27:32,751 Speaker 2: well as youtube. The team of Money Talks is made 574 00:27:32,761 --> 00:27:36,761 Speaker 2: up of Joanne Chan, Tiffany, Christina Roberts. You win and 575 00:27:36,771 --> 00:27:37,880 Speaker 2: I'm Andrea P.