WEBVTT - Quick Bite: Bonds vs. equities–investing in an uncertain market 

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<v Speaker 1>You're listening to a shares these podcast, So what is

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<v Speaker 1>the recommendations for investors? Do you think to see you? Then,

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<v Speaker 1>I think bonds actually still look good, so yields, and

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<v Speaker 1>you've got to think about the risks that they're hedging

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<v Speaker 1>you for. If you look back to twenty twenty two,

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<v Speaker 1>everyone says our bonds didn't work. My equities went down,

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<v Speaker 1>my bonds went down. It was just horrible. There's no diversification.

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<v Speaker 1>Bonds don't ensure you for an inflation shock. They ensure

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<v Speaker 1>you for a growth shock. And right now, the consensus

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<v Speaker 1>view is that everything goes along really, really well, and

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<v Speaker 1>that's why bond yields are higher than they are. Us

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<v Speaker 1>growth will be pretty robust, but the world is a

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<v Speaker 1>mysterious place where things like COVID nineteen happen, and then

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<v Speaker 1>you need your bonds to ensure your portfolio. You are

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<v Speaker 1>getting paid to be there at the moment. The one

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<v Speaker 1>caveat i'd really give is that the additional return you're

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<v Speaker 1>getting for buying a corporate bond or a corporate bond

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<v Speaker 1>fund is really really low at the moment. So i'd

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<v Speaker 1>favor I do favor in portfolio is having more of

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<v Speaker 1>a sovereign bent than a corporate bent, because that's rarely

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<v Speaker 1>going to help you with your downside protection. So yeah,

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<v Speaker 1>I think they look good, as I said, New Zealand,

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<v Speaker 1>but more relatively attractive compared to global shares. And that's

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<v Speaker 1>largely because of just how wide the breadth of expensiveness goes,

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<v Speaker 1>particularly in the US, to a lesser extent globally as well.

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<v Speaker 2>You know, when you talk about downside protection, I think

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<v Speaker 2>it's worth thinking hard about that because the one thing

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<v Speaker 2>that I think has changed from in the last say,

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<v Speaker 2>three or four years compared to almost the whole of

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<v Speaker 2>the rest of my career is we've been through a

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<v Speaker 2>period of globalization, trade liberalization, internationally accepted rules. We're now

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<v Speaker 2>into where economy kind of trumped politics. We're into an

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<v Speaker 2>era now where politics trump's the economy and trade. So

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<v Speaker 2>there is a lot of uncertainty and baked into that.

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<v Speaker 2>It can just be Trump saying something different every day,

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<v Speaker 2>or it can be the Chinese economy tanking so badly

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<v Speaker 2>that they need to create a distraction and decide to

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<v Speaker 2>invade Taiwan. You know, all sorts of things can happen

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<v Speaker 2>when politicians rather than markets are driving things which you

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<v Speaker 2>don't see coming. So I do think that while there's

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<v Speaker 2>a lot of upside there in the US story, and

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<v Speaker 2>I really take your point about new Ually it may

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<v Speaker 2>not look very exciting, but if it's cheap enough, it's

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<v Speaker 2>always exciting. I would be taking a lot of cognizance

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<v Speaker 2>of the potential for something to come created by our

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<v Speaker 2>fellow man and women, but mainly man, which will up

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<v Speaker 2>end the apple cart, and which has nothing to do

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<v Speaker 2>with actual economic conditions and has everything to do with geopolitics.

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<v Speaker 1>Investing involves a risk you might lose the money you

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<v Speaker 1>start with. We recommend talking to a licensed financial advisor.

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<v Speaker 1>We also recommend b reading product disclosure documents before deciding

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<v Speaker 1>to invest. Everything you're about to see and hear is

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<v Speaker 1>current at the time of recording.