WEBVTT - All things diversification, with Victoria from The Curve 0:00:00.200 --> 0:00:02.639 Put your hand up if you've kissed more than one person, 0:00:03.120 --> 0:00:05.960 and people will put their hand up and we're like, well, 0:00:05.960 --> 0:00:08.920 that's diversification. You know, you're spreading the love. You're not 0:00:08.960 --> 0:00:12.360 putting all your eggs in one basket. You hear so 0:00:12.640 --> 0:00:16.040 many horror stories about investing in the stock market, which 0:00:16.079 --> 0:00:19.319 I hate because nine times out of ten it's from. 0:00:19.200 --> 0:00:20.480 People that haven't diversified. 0:00:20.840 --> 0:00:23.200 I would rather go to sleep and not have to 0:00:23.720 --> 0:00:25.840 wake up in the middle of night to make sure 0:00:25.880 --> 0:00:28.360 that my portfolio hasn't fallen off a cliffs. One of 0:00:28.440 --> 0:00:31.040 the easiest ways, and it's not a lazy way. It's 0:00:31.080 --> 0:00:34.400 not a cheating way, it's not a you know, get 0:00:34.479 --> 0:00:37.560 rich quick way. It's literally a strategy that many many 0:00:37.560 --> 0:00:38.800 great vestas have used. 0:00:39.159 --> 0:00:42.159 Kyota and Welcome to Shared Lunch, brought to you by Charesia's. 0:00:42.560 --> 0:00:45.600 I'm Sonia Williams, co CEO and co founder at chairs 0:00:45.600 --> 0:00:48.400 EA's and we're on a mission to create financial empowerment 0:00:48.440 --> 0:00:52.159 for everyone. Today on the podcast, I'm excited to welcome 0:00:52.240 --> 0:00:56.760 back Victoria Harris, co founder from financial education and investment 0:00:56.800 --> 0:01:00.360 platform The Curve. In this episode, we'll get into the 0:01:00.440 --> 0:01:04.560 nitty gritty of diversification, what it means, when to do it, 0:01:04.600 --> 0:01:07.040 and some potential ways on how to do it. Before 0:01:07.080 --> 0:01:09.520 we get started, here's some important information. 0:01:10.280 --> 0:01:13.360 Investing involves risk. You might lose the money you start with. 0:01:13.640 --> 0:01:17.400 We recommend talking to a licensed financial advisor. We also 0:01:17.440 --> 0:01:21.400 recommend reading product disclosure documents before deciding to invest. Everything 0:01:21.440 --> 0:01:23.480 you're about to see and here is current at the 0:01:23.520 --> 0:01:24.240 time of recording. 0:01:24.400 --> 0:01:26.360 Victoria, Welcome back to the podcast. 0:01:26.560 --> 0:01:29.080 Hi, how are you? Thanks for having me. 0:01:29.480 --> 0:01:32.840 Really cool to have you here to talk about a topic, 0:01:32.920 --> 0:01:34.560 a very cool investing topic. 0:01:34.680 --> 0:01:39.080 Diversification one of my favorite words. Well love that. 0:01:40.080 --> 0:01:41.720 Do you want to tell us a bit about what 0:01:42.720 --> 0:01:43.720 diversification is? 0:01:44.040 --> 0:01:45.600 Yes, So diversification is. 0:01:45.800 --> 0:01:48.160 It sounds like a mouthful, but really it's all about 0:01:48.360 --> 0:01:52.640 spreading your risks, So investing in lots of different things, 0:01:52.720 --> 0:01:57.280 spreading the love, splitting up your investments so you're not susceptible. 0:01:57.400 --> 0:01:59.880 If you know, if you put all your investments into 0:02:00.040 --> 0:02:02.240 into one company and it didn't do well, then you 0:02:02.280 --> 0:02:05.280 wouldn't be too happy. So it's spreading the love around 0:02:05.280 --> 0:02:08.200 and spreading investments around so you're less susceptible to one 0:02:08.240 --> 0:02:08.919 bad decision. 0:02:09.600 --> 0:02:11.760 Yeah, so let's jump into that a little bit more like, so, 0:02:11.800 --> 0:02:14.079 what are the benefits why diversify? 0:02:14.400 --> 0:02:16.240 The best thing that we want to do when we 0:02:16.320 --> 0:02:19.800 invest is we want to get great returns with the 0:02:19.800 --> 0:02:22.959 lowest amount of risk, and that's what everyone wants to 0:02:22.960 --> 0:02:24.120 do at the end of the day. And the best 0:02:24.120 --> 0:02:28.080 way to do that is to spread your investments around 0:02:28.160 --> 0:02:32.240 multiple things, whether it's investing in lots of different companies, 0:02:32.320 --> 0:02:34.960 so like investing in the S and P five hundred, 0:02:34.960 --> 0:02:36.800 which is the top five hundred companies in the years, 0:02:37.200 --> 0:02:42.120 or spreading your money around different assets so that could 0:02:42.120 --> 0:02:47.760 be property in stocks, or investing in in different sectors. 0:02:47.800 --> 0:02:51.000 There's lots of ways that you can diversify. But essentially 0:02:51.040 --> 0:02:54.000 diversification is so that you are reducing your risk and 0:02:54.480 --> 0:02:57.760 it's just a really great investment strategy for building long, 0:02:58.200 --> 0:02:58.919 long term wealth. 0:02:59.280 --> 0:03:01.520 He touched on it, well, it's also like looking at 0:03:01.520 --> 0:03:05.440 your whole wealth picture and how you might split or 0:03:05.520 --> 0:03:09.280 consider diversifying, you know, your income or things like that. 0:03:09.440 --> 0:03:11.880 Yeah, that's that's a really good point. You can diversify 0:03:11.960 --> 0:03:15.320 in many ways throughout your life. The end of the day, 0:03:15.320 --> 0:03:17.280 it's just all all about reducing your risk. If you 0:03:17.360 --> 0:03:21.480 had diversified income streams and you lost your job and 0:03:21.520 --> 0:03:23.959 you still had your side hustle, then that's great, you'd 0:03:24.000 --> 0:03:27.720 be you'd have less stress if something happened or if 0:03:27.720 --> 0:03:30.560 something didn't go right. And so that's the whole point 0:03:30.600 --> 0:03:32.959 of justification is to kind of, I guess, reduce the 0:03:33.000 --> 0:03:37.080 stress when something doesn't go right, protect yourself while also 0:03:37.560 --> 0:03:41.640 on the investing side, build your wealth in a really sustainable, 0:03:42.760 --> 0:03:44.720 sustainable kind of wealth creation way. 0:03:45.120 --> 0:03:47.600 Is it just something you should consider when you're getting started, 0:03:47.760 --> 0:03:50.960 or is it, you know, something that you need to 0:03:51.000 --> 0:03:52.840 worry about when you're an experienced invested. 0:03:53.480 --> 0:03:56.320 When we've started educating and we were talking about diversification 0:03:56.600 --> 0:04:01.120 and we were talking to beginner investors, what we noticed 0:04:01.240 --> 0:04:04.520 was that it was almost stressing them out more because 0:04:04.520 --> 0:04:06.840 they were like, well, you know, I'm investing. All I 0:04:06.880 --> 0:04:09.520 want to focus on is finding the right investment, investing 0:04:09.520 --> 0:04:11.240 in one thing let alone, something else or something else 0:04:11.240 --> 0:04:15.680 and something else, and diversifying. And someone said one day 0:04:15.680 --> 0:04:18.800 to me. They were like, they were like, diversify when 0:04:18.839 --> 0:04:21.680 you can. So if you're investing in the stock market 0:04:22.200 --> 0:04:24.719 and then you have the financial ability to invest in 0:04:24.720 --> 0:04:27.120 the property market, then you should. So it's like but 0:04:27.240 --> 0:04:29.880 don't stress yourself out being like, oh gosh, I have 0:04:29.920 --> 0:04:32.920 to invest in property and stocks and diversify within property 0:04:32.960 --> 0:04:35.920 and diversy within stocks, and get stressed out about how 0:04:36.000 --> 0:04:37.280 much you have to diversify. 0:04:37.720 --> 0:04:40.080 It's like start, start with one thing. 0:04:40.800 --> 0:04:43.960 And diversify in that if you can, and then diversify 0:04:44.000 --> 0:04:44.440 beyond that. 0:04:44.720 --> 0:04:47.760 Yeah, yeah, I just saw that kind of meme pop 0:04:47.760 --> 0:04:50.680 into my head of the person staring off into middle distance. 0:04:50.320 --> 0:04:52.480 While all the calculations are coming on. 0:04:52.520 --> 0:04:57.160 As you're talking within diversifying and diversifying. 0:04:57.000 --> 0:05:01.400 Even diversifying the word itself diversification, people's eyes glaze over 0:05:01.440 --> 0:05:03.520 and we say, put your hand up if you've kissed 0:05:03.560 --> 0:05:06.280 more than one person, And people will put their hand up, 0:05:06.320 --> 0:05:09.880 and we're like, well, that's diversification. You know, you're spreading 0:05:09.880 --> 0:05:12.360 the love. You're not putting all your eggs in one basket. 0:05:12.560 --> 0:05:14.560 If you start dating, you don't want to date just 0:05:14.560 --> 0:05:16.440 just one guy in case you might be a plunker 0:05:16.480 --> 0:05:18.520 and then you've got to start again. You know, it's 0:05:18.520 --> 0:05:21.120 like just you know, not date multiple gill at once, 0:05:21.160 --> 0:05:23.280 but you know, keep your options open. You know you 0:05:23.360 --> 0:05:24.960 might have a successfu one, you might have a done 0:05:24.960 --> 0:05:27.159 so It's the same with investing. It's like invest in 0:05:27.160 --> 0:05:28.840 lots of different things. So if one doesn't do as well, 0:05:28.880 --> 0:05:31.000 it's like, so what, I've got all these other ones 0:05:31.000 --> 0:05:33.000 that are doing well, and it's it's it's not going 0:05:33.040 --> 0:05:35.600 to be as impactful for me on almost stress levels 0:05:35.640 --> 0:05:36.920 but also my finances. 0:05:37.960 --> 0:05:41.080 Yeah, totally. So now that we've established that, it's really cool. 0:05:43.120 --> 0:05:46.360 It's really important as part of your investing, you know, 0:05:46.680 --> 0:05:49.760 and considering wealth as a whole. You know, when should 0:05:49.760 --> 0:05:53.240 people and how should people consider to start seriously thinking 0:05:53.279 --> 0:05:57.080 about diversifying or moving different things into different buckets. 0:05:57.480 --> 0:06:02.280 Yeah, I think the simplest and easiest way is to 0:06:02.320 --> 0:06:08.760 start with ETFs. It removes the thought process of like, okay, 0:06:08.760 --> 0:06:11.200 well how many how many stocks we have to invest in? 0:06:11.400 --> 0:06:13.680 It is it four? Is it ten? Is it twenty? 0:06:13.920 --> 0:06:15.400 Do I have to pack all those companies? 0:06:15.440 --> 0:06:15.640 You know? 0:06:15.720 --> 0:06:18.640 It's it removes that that that decision making element, while 0:06:18.680 --> 0:06:22.119 you still get access to stop the US stock market. 0:06:22.160 --> 0:06:24.599 Say, if you're invested in the S and P five hundred. 0:06:25.120 --> 0:06:29.839 And you're just owning one thing in your portfolio, which 0:06:29.880 --> 0:06:32.880 is a share in an ETF, you're getting access to 0:06:33.000 --> 0:06:35.400 all these underlying companies that are in it, and I 0:06:35.440 --> 0:06:38.080 think that is one of the easiest ways. And it's 0:06:38.080 --> 0:06:41.080 not a lazy way. It's not a cheating way. It's 0:06:41.120 --> 0:06:44.160 not a you know, get rich quick way. It's literally 0:06:44.240 --> 0:06:47.680 a strategy that many, many great investors have used, which 0:06:47.760 --> 0:06:53.080 is buying ETFs and getting diversification that way. We get 0:06:53.080 --> 0:06:56.359 a lot of questions of people asking, you know, do 0:06:56.400 --> 0:06:58.800 I have to direct do I have to directly pickstocks? 0:06:59.320 --> 0:07:02.240 And if I want to diversify, what is a correct amount? 0:07:02.320 --> 0:07:04.200 Is it five? Is it ten? Is at twenty? And 0:07:04.240 --> 0:07:05.360 there's no real answer. 0:07:05.440 --> 0:07:09.720 It's you know, you could have ten companies that you're 0:07:09.720 --> 0:07:12.680 investing in that are all in the healthcare industry. Yes, 0:07:12.720 --> 0:07:16.920 you're diversified, but you're not You're not very well diversified 0:07:16.960 --> 0:07:22.160 because you've still got exposure to one industry. So it's 0:07:22.200 --> 0:07:26.240 really thinking about you know, diversification can reach so many 0:07:26.240 --> 0:07:26.840 different areas. 0:07:26.840 --> 0:07:29.040 It can be diversification and size of company. 0:07:29.320 --> 0:07:32.440 It can be diversification in sector, it can be diverstic 0:07:32.760 --> 0:07:39.360 diversification and country. It can be diversification in your asset classes, 0:07:39.360 --> 0:07:40.640 so stocks. 0:07:40.200 --> 0:07:42.680 Bonds, property, like, yeah, it's it's never ending. 0:07:43.640 --> 0:07:46.120 Can you tell us a bit about different asset classes. 0:07:46.160 --> 0:07:49.360 We've talked about those, but maybe might be helpful to 0:07:49.400 --> 0:07:52.000 go into those in a bit more detail. 0:07:52.280 --> 0:07:58.960 Yeah, So there's typically four asset classes. So we've got stocks, bonds, property, 0:07:59.000 --> 0:08:02.880 and cash. And the reason that assets are lumped into 0:08:02.920 --> 0:08:06.200 those classes is because they move in different ways. 0:08:06.480 --> 0:08:08.680 We've got stocks, which. 0:08:08.440 --> 0:08:11.840 Are high on the kind of risk but then higher 0:08:11.840 --> 0:08:15.880 the reward spectrum in general, and then we've got then 0:08:15.880 --> 0:08:18.000 we've got property next, and then we've got bonds, and 0:08:18.000 --> 0:08:20.280 then we've got cash. So cash is at the bottom. 0:08:20.360 --> 0:08:22.800 It's low risk, but it's also low return. If you 0:08:22.840 --> 0:08:25.840 put one thousand dollars in the bank, you pretty much 0:08:25.880 --> 0:08:28.320 know unless you've spent some of it that in a 0:08:28.400 --> 0:08:31.000 year's time, you're going to wake up and there'll be 0:08:31.040 --> 0:08:34.600 a thousand dollars in there. But because of that guarantee 0:08:34.760 --> 0:08:38.480 or that I guess that security, you're not taking a 0:08:38.520 --> 0:08:40.640 lot of risks, so therefore you're not compensated for that, 0:08:40.679 --> 0:08:43.040 so there's not not a lot of return, whereas with 0:08:43.240 --> 0:08:46.559 stocks at the other end of the spectrum, because you're 0:08:46.600 --> 0:08:51.240 taking a lot more risk, then you're getting compensated for 0:08:51.280 --> 0:08:56.520 it by a higher return on average. 0:08:56.600 --> 0:08:59.559 Yeah, co and how about currencies. 0:09:00.080 --> 0:09:03.840 With currencies, it is something to consider when investing a 0:09:03.880 --> 0:09:05.360 lot of the companies that we invest in, a lot 0:09:05.360 --> 0:09:09.560 of the household companies that we know companies in the 0:09:09.600 --> 0:09:12.600 S and P. Five hundred, they're all US dollar companies, 0:09:12.960 --> 0:09:15.760 and so we do have to transfer our New Zealand 0:09:15.760 --> 0:09:19.120 dollars into US dollars. So therefore, if the currency moves 0:09:19.200 --> 0:09:22.600 in the opposite direction, say our stocks go up, but 0:09:22.640 --> 0:09:25.840 the currency moves in the opposite direction, and that's going 0:09:25.840 --> 0:09:28.520 to impact our overall return in a negative way. 0:09:28.800 --> 0:09:30.240 And so we're not going to get as much of 0:09:30.280 --> 0:09:32.120 a return when we. 0:09:32.080 --> 0:09:35.839 Convert our profits, all the money that we've made in 0:09:35.840 --> 0:09:38.640 those stocks back to New Zealand dollars, and the opposite 0:09:38.800 --> 0:09:40.960 happened can happen as well though, So if you invest 0:09:40.960 --> 0:09:44.520 in US dollars and then the currency moves in your favor, 0:09:45.120 --> 0:09:49.280 that can boost your returns. So I try, particularly for 0:09:49.360 --> 0:09:52.000 beginner investors, to not get too hung up about currency. 0:09:52.679 --> 0:09:58.160 I yeah, there's it's very hard to predict, you know, 0:09:59.040 --> 0:10:02.960 currency moves, and I think if you just accept that, 0:10:03.160 --> 0:10:05.600 you know, sometimes it will benefit you, sometimes it might not. 0:10:06.240 --> 0:10:09.520 But over the long term, you know, it should be 0:10:09.520 --> 0:10:11.680 the returns of the of what you're investing in. That 0:10:11.679 --> 0:10:14.200 that's the most important. So you've been investing for a 0:10:14.200 --> 0:10:18.719 while now, as you have and I have. Are there 0:10:18.720 --> 0:10:20.839 any blind spots or what are the blind spots? What 0:10:21.280 --> 0:10:26.040 catches people out? You hear so many horror stories about 0:10:26.080 --> 0:10:29.360 investing in the stock market, which I hate because nine 0:10:29.400 --> 0:10:31.920 times out of ten it's from people that haven't diversified, 0:10:31.960 --> 0:10:35.480 and it's from people that have put, you know, their 0:10:35.679 --> 0:10:39.720 entire life savings into bitcoin, for example, and that hasn't 0:10:39.760 --> 0:10:44.040 gone to plan. And so that's and then those stories, 0:10:44.160 --> 0:10:46.040 you know, flow down to beginner investors, and they get 0:10:46.040 --> 0:10:48.360 spooked and they get stick scared, and then they or 0:10:48.520 --> 0:10:50.800 they put they don't diversify from day one, and they 0:10:50.800 --> 0:10:52.800 have the same experience and they never invest again. And 0:10:52.840 --> 0:10:56.240 that's that's the opposite of what we want here. But 0:10:56.320 --> 0:10:59.840 some other blind spots, I think you might might not 0:10:59.920 --> 0:11:03.800 be as diversified as you thought, Like I was talking 0:11:03.800 --> 0:11:08.240 about with you know, investing in maybe a healthcare healthcare 0:11:08.280 --> 0:11:11.480 ETF for example, Yes you're diversified, but you're still in 0:11:11.480 --> 0:11:14.720 the healthcare space. So say we had an election that 0:11:14.760 --> 0:11:18.000 cut a whole lot of healthcare spending, then that ETF 0:11:18.040 --> 0:11:20.760 would be impacted even though you're still investing in a 0:11:20.760 --> 0:11:25.880 whole bunch of companies within that ETF, you're still you're 0:11:25.920 --> 0:11:30.760 overexposed or investing heavily in one sector. That's why the 0:11:30.800 --> 0:11:33.280 S and P five hundred is so great, because that 0:11:33.320 --> 0:11:38.280 ETF has over five hundred companies across, like over nearly 0:11:38.280 --> 0:11:42.480 twelve different sectors. Big companies, small companies, companies that get 0:11:42.520 --> 0:11:46.520 most of their revenue from offshore or outside of the US, 0:11:46.640 --> 0:11:48.520 companies that get their revenue from inside the US. So 0:11:48.520 --> 0:11:51.720 there's a lot of I guess, risk mitigation going on 0:11:51.920 --> 0:11:55.800 within that ETF. For example, it's probably not a blind spot, 0:11:55.800 --> 0:11:59.480 but it's more of like something that people might stress 0:11:59.480 --> 0:12:05.000 out about is is having too much focus on being 0:12:05.040 --> 0:12:07.160 too diversified. So there's kind of I guess what I'm 0:12:07.160 --> 0:12:10.880 getting at is there is a middle ground. Don't stress 0:12:10.880 --> 0:12:14.080 yourself out about being you know, super super diversified and 0:12:14.160 --> 0:12:18.720 owning you know, twenty different ETFs like that's you know, 0:12:18.760 --> 0:12:20.280 if you've got if you've got a handful of them, 0:12:20.280 --> 0:12:24.720 that's that's fine, or even just one well diversified ETF. 0:12:25.120 --> 0:12:29.200 But yeah, don't stress yourself outself out about being you know, 0:12:31.080 --> 0:12:35.840 needing to be so diversified that you're just owning things 0:12:35.840 --> 0:12:38.800 for owning them, for owning them's sake. You know, you're 0:12:38.800 --> 0:12:42.480 not actually owning them. You're actually making a conscious decision 0:12:42.520 --> 0:12:45.000 of why you own that ETF or stock. 0:12:46.520 --> 0:12:48.040 Yeah, that's such a good point, and we see that 0:12:48.080 --> 0:12:50.400 play out and the data. 0:12:50.200 --> 0:12:51.920 Around like how people use shares these as well. 0:12:52.080 --> 0:12:55.600 So we've got over seven hundred thousand people investing and 0:12:55.679 --> 0:12:58.240 most have you know, a few a few funds and. 0:12:58.200 --> 0:13:01.720 A few companies like that. It's like level of data. 0:13:01.760 --> 0:13:04.960 So yeah, or satellite approach. 0:13:05.320 --> 0:13:08.080 I'm like, I should be I should be direct stock 0:13:08.120 --> 0:13:10.000 picking all my stocks, but I don't give time. 0:13:10.080 --> 0:13:11.559 I'm trying to like run a business as well. 0:13:11.600 --> 0:13:14.080 And it's so I'm still interested in investing, and of 0:13:14.120 --> 0:13:16.000 course I want to grow my money and grow my 0:13:16.360 --> 0:13:17.400 you know, grow my wealth. 0:13:17.679 --> 0:13:20.360 So I'm going to put eighty percent in ETFs and. 0:13:20.679 --> 0:13:23.439 Funds, But then I might read about a company that 0:13:23.480 --> 0:13:27.760 I'm like, oh that's interesting, or yeah, by buy companies 0:13:27.760 --> 0:13:29.800 that I that I want to almost like double down 0:13:29.840 --> 0:13:32.320 and support because I think they're going to do They're 0:13:32.320 --> 0:13:33.280 going to do really well. 0:13:33.440 --> 0:13:35.280 So I'll do that as well, So. 0:13:35.880 --> 0:13:38.520 There's no right or wrong, it's it's kind of what 0:13:38.600 --> 0:13:39.640 works for you as well. 0:13:40.559 --> 0:13:43.480 Yeah, that's that's so great to hear it because that's 0:13:43.520 --> 0:13:47.400 exactly how I invest as well. And and it's one 0:13:47.400 --> 0:13:49.480 of those almost myths that we're trying to bust, which 0:13:49.520 --> 0:13:52.000 is when people say, oh, I'm just a beginner, so 0:13:52.040 --> 0:13:53.959 I invest like this, and it's like, well, I've actually 0:13:54.080 --> 0:13:56.480 been using for a while now and I miss like 0:13:56.600 --> 0:14:00.079 that too, Like I know, yeah, So it's kind of 0:14:00.160 --> 0:14:04.040 almost like you know, trying to that is we you know, 0:14:04.160 --> 0:14:07.000 it's the great principles to start with, great principles to 0:14:07.040 --> 0:14:11.120 continue doing. And it's cool to hear that, you know, 0:14:11.160 --> 0:14:14.280 and and it's well known like that really sophisticated investors 0:14:14.280 --> 0:14:16.600 can continue to invest in that way. 0:14:17.480 --> 0:14:18.160 Coming back to. 0:14:18.200 --> 0:14:21.320 Your comment about like when you come across like a 0:14:21.360 --> 0:14:24.080 few companies you're keen to invest in as part of 0:14:24.120 --> 0:14:27.760 that course satellite approach, there's another phrase that you hear 0:14:27.800 --> 0:14:29.680 a lot in investing, which is like invest in what 0:14:29.800 --> 0:14:33.880 you know? How do you think about that? And what 0:14:33.920 --> 0:14:35.200 do you what are your reckons? 0:14:36.000 --> 0:14:37.040 Yeah? I love it. 0:14:37.120 --> 0:14:40.560 I love that phrase, and that was one of I 0:14:40.560 --> 0:14:43.680 remember my first day as an analyst, and my boss 0:14:44.400 --> 0:14:47.120 threw a book down on my my DearS can. He said, 0:14:47.120 --> 0:14:48.520 I don't want to do anything today. I just want 0:14:48.520 --> 0:14:51.280 you to read this book and it was Peter Lynch 0:14:51.280 --> 0:14:54.360 One Up on Wall Street. And the key takeaway from 0:14:54.360 --> 0:14:57.200 that book is invest in what you know. And that 0:14:57.360 --> 0:14:59.640 is just stood buy me. You know, my entire investing 0:14:59.640 --> 0:15:02.680 in career. And it's so true. 0:15:02.760 --> 0:15:09.040 And I think investing has got, you know, so complicated. 0:15:08.400 --> 0:15:11.520 And can be so overwhelming and confusing for so many people. 0:15:11.520 --> 0:15:14.520 But if you strip it back, it's like what do 0:15:14.600 --> 0:15:16.880 you enjoy, what are you passionate about, what are you 0:15:16.920 --> 0:15:21.880 interested in? What products do you use? Yeah, and it's 0:15:21.880 --> 0:15:24.440 like what are your values? All of that just comes 0:15:24.480 --> 0:15:28.240 down to investing in what you know. And for me, 0:15:28.480 --> 0:15:32.040 it's like, I don't know biotech. I'm not going to 0:15:32.120 --> 0:15:34.680 know if some clinical trial is going to be a success. 0:15:34.880 --> 0:15:37.200 I'm not going to invest in those companies like I'll 0:15:37.280 --> 0:15:38.840 leave them for someone else to invest in. 0:15:39.080 --> 0:15:40.600 I'm going to stick to. 0:15:40.600 --> 0:15:45.880 Companies that I'm interested in, like technology companies, media companies, retailers. 0:15:46.240 --> 0:15:49.760 All of that really interests me, and I it doesn't 0:15:49.800 --> 0:15:55.960 seem like like it's it's tiresome, or it's just something 0:15:56.000 --> 0:15:58.080 I have to do. It's because I'm interested in it. 0:15:58.440 --> 0:16:01.800 I'm following those companies, I'm reading articles on them, I'm 0:16:02.320 --> 0:16:05.360 using their products, I'm looking, you know, using their new features. 0:16:05.400 --> 0:16:08.400 So I know, because I'm a user and it's and 0:16:08.400 --> 0:16:12.600 it's a company. I know if for whatever reason I don't, 0:16:12.680 --> 0:16:14.800 I don't use it anymore, or I see all my 0:16:14.880 --> 0:16:18.200 friends not using it, or they're using something some other platform, 0:16:18.320 --> 0:16:22.000 or or they're buying a different product, then that is 0:16:22.080 --> 0:16:24.880 that's research, and that's investment research. And so I'll be like, oh, 0:16:25.160 --> 0:16:28.200 hang on, if all these people and myself are now 0:16:28.360 --> 0:16:30.600 no longer using this product or no longer interested in 0:16:30.640 --> 0:16:34.240 this in this company, surely there must be other people. 0:16:34.280 --> 0:16:35.720 And so you start to. 0:16:36.960 --> 0:16:40.840 Be in this investing world without realizing it. And at 0:16:40.840 --> 0:16:42.760 the end of the day, you know, if you're a 0:16:42.800 --> 0:16:46.080 consumer and you're you're you're voting with your wallet for 0:16:46.120 --> 0:16:48.440 that company, you know you may as well benefit as 0:16:48.440 --> 0:16:51.800 an investor as well and benefit from that company's growth. 0:16:51.840 --> 0:16:53.840 If you're kind of giving it the tick of approval 0:16:53.840 --> 0:16:57.600 as a customer, it kind of makes sense to double 0:16:57.640 --> 0:17:01.600 down and benefit from it as an as well. 0:17:01.760 --> 0:17:04.320 Yeah, I love that, And I think the way I 0:17:04.320 --> 0:17:06.520 think about it too is, you know it really you 0:17:06.560 --> 0:17:10.480 can turn observation into your superpower because when you invest 0:17:10.520 --> 0:17:13.040 in the things that you're just around and you're amongst, 0:17:13.119 --> 0:17:17.600 and you're observing, you can really say huh, like yeah, 0:17:17.640 --> 0:17:19.679 as you say, like the taste of this thing has 0:17:19.800 --> 0:17:22.520 changed or they've changed the recipe, I'm not that into it. 0:17:22.680 --> 0:17:25.960 And something like for women, it's like we make up 0:17:26.000 --> 0:17:29.400 eighty percent of global spending and so it's like, yes, 0:17:29.440 --> 0:17:33.480 you're a consumer, so it's like you are dictating where 0:17:33.520 --> 0:17:36.159 that money is spent, you know as a gender or 0:17:36.240 --> 0:17:39.200 you know your majority of spending. It's like you can 0:17:39.280 --> 0:17:43.600 see these trends and you are almost part of the trend. 0:17:44.280 --> 0:17:49.560 So you've got that foresight before a lot of other people, particularly. 0:17:49.080 --> 0:17:49.720 Men, might have. 0:17:49.880 --> 0:17:52.080 You know. It's like using these these things to your 0:17:52.119 --> 0:17:55.159 advantage rather than kind of being like, oh, it's not 0:17:55.200 --> 0:17:58.280 a world for me, or it's I'm not part of it. 0:17:58.280 --> 0:17:59.919 It's like we're all part of it, whether we are 0:17:59.960 --> 0:18:00.520 like it or not. 0:18:01.080 --> 0:18:03.920 Like yeah, it's such a good point. 0:18:04.560 --> 0:18:07.240 Let's deep dive into rest, Like how how does risk 0:18:07.280 --> 0:18:10.280 plan to diversification and you know, how do we think 0:18:10.320 --> 0:18:11.760 about how should people think about that? 0:18:12.960 --> 0:18:17.400 Yeah, so risk is effectively the movement up and down 0:18:17.840 --> 0:18:22.639 of prices. So if something is got big movements in 0:18:22.680 --> 0:18:25.720 its in its price, then it's got a lot of risk. 0:18:26.160 --> 0:18:29.879 So things like cryptocurrency, they you know, there's big moves 0:18:29.880 --> 0:18:32.920 in cryptocurrency. You know, Bitcoin for example, has has moved 0:18:32.960 --> 0:18:34.800 around a lot over the last couple of years. 0:18:34.960 --> 0:18:36.520 Therefore it's quite risky. 0:18:37.760 --> 0:18:42.879 So when it comes to risk and diversification, the the 0:18:43.000 --> 0:18:47.240 two intertwined, and the fact that yes, if you if 0:18:47.280 --> 0:18:49.720 you spread your risk, so you invest in lots of 0:18:50.119 --> 0:18:53.280 lots of different companies. Let's say, for argument's sake, you 0:18:53.359 --> 0:18:55.920 invest in lots of different companies. Some of them might 0:18:55.960 --> 0:18:58.200 have big moves, some of them might not move at all, 0:18:58.720 --> 0:19:03.159 but the average of those is not a lot of movement. 0:19:03.920 --> 0:19:06.800 I think it comes back to you never know what's 0:19:06.920 --> 0:19:13.800 around the corner. And yes, you might invest in something 0:19:13.880 --> 0:19:18.360 that has done very well over the last few years, 0:19:18.520 --> 0:19:21.800 and you know the ins and outs of that investment 0:19:21.880 --> 0:19:23.760 or that company or whatever it is, and you are 0:19:24.000 --> 0:19:27.119 so positive that it's going to do well, but that 0:19:27.320 --> 0:19:29.399 just the world is so unknown and you never know 0:19:30.040 --> 0:19:32.840 also how other investors are going to react, because when 0:19:32.880 --> 0:19:36.639 you're buying and selling a share that's off other investors, 0:19:36.680 --> 0:19:39.679 So how they react is you also have to take 0:19:39.720 --> 0:19:41.840 into consideration if they don't want to own this stock 0:19:41.880 --> 0:19:45.240 anymore or this company, but you do, and there's a 0:19:45.280 --> 0:19:47.080 whole lot more of them than there are of you, 0:19:47.200 --> 0:19:48.680 than the share price is going to go down. So 0:19:49.240 --> 0:19:51.600 it's you've got to take all that into consideration as 0:19:51.600 --> 0:19:54.199 well as kind of what's going on with the company, 0:19:54.000 --> 0:19:57.240 the world that there's a lot of There's a lot 0:19:57.280 --> 0:20:00.119 going on that you need to consider if you it's 0:20:00.119 --> 0:20:02.800 going to be still one thing we didn't foresee COVID, 0:20:02.840 --> 0:20:05.400 for example, and that led to a lot of sheer 0:20:05.440 --> 0:20:09.240 price falls. But again that's probably a really good example 0:20:09.240 --> 0:20:12.919 of diversification. If you'd owned, you know, heading into COVID, 0:20:12.960 --> 0:20:17.840 if you'd owned just travel companies, then your portfolio would 0:20:17.840 --> 0:20:21.359 have looked pretty dire, Whereas if you'd owned some travel 0:20:21.359 --> 0:20:24.600 companies and some tech companies, you would have, you know, 0:20:24.920 --> 0:20:27.240 feared a lot better. Yes, the travel companies would have 0:20:27.240 --> 0:20:29.200 gone down and the tech companies would have gone up. 0:20:29.280 --> 0:20:31.320 It can be an event like that, but it can 0:20:31.359 --> 0:20:34.480 also just be the subtle changes of trends or how 0:20:34.560 --> 0:20:37.000 people you know, Like I think even at the moment 0:20:37.040 --> 0:20:39.800 when you consider like run club culture, like that feels 0:20:39.880 --> 0:20:44.080 like something that's like really a fundamental shift that it's 0:20:44.119 --> 0:20:47.359 like almost going back to you know, like aerobics in 0:20:47.400 --> 0:20:49.719