1 00:00:00,960 --> 00:00:05,560 Speaker 1: You're listening to a Sheerseise podcast. I've been really hardened 2 00:00:05,559 --> 00:00:08,920 Speaker 1: to see the response to this period of volatility, where 3 00:00:09,280 --> 00:00:11,720 Speaker 1: the latest figures from the Cheess's Index over the quarter 4 00:00:11,840 --> 00:00:16,599 Speaker 1: January to March showed again continuing strong netbuying through this period, 5 00:00:17,360 --> 00:00:20,439 Speaker 1: and then also a shift away from sort of more 6 00:00:20,520 --> 00:00:25,440 Speaker 1: individual companies and into more ETFs and diversified funds as 7 00:00:25,440 --> 00:00:29,680 Speaker 1: well as into defensive individual companies as well. And I 8 00:00:29,720 --> 00:00:32,080 Speaker 1: do think that reflects the fact that we are probably 9 00:00:32,080 --> 00:00:35,800 Speaker 1: in for a period of continued volatility, and diversification is 10 00:00:35,840 --> 00:00:40,280 Speaker 1: a really sort of important thing to make your portfolio 11 00:00:40,360 --> 00:00:43,600 Speaker 1: more resilient to sort of withstand with send that period. 12 00:00:44,040 --> 00:00:49,320 Speaker 1: I also think actually even before this tariff war and 13 00:00:49,360 --> 00:00:52,199 Speaker 1: these geopolitical events that we're seeing play out, you know, 14 00:00:52,240 --> 00:00:55,440 Speaker 1: if I look at twenty twenty four, in the year, 15 00:00:55,640 --> 00:00:57,319 Speaker 1: the S and P five hundred was up, I think 16 00:00:57,320 --> 00:01:00,639 Speaker 1: about twenty five percent, but about half of those companies 17 00:01:00,880 --> 00:01:04,760 Speaker 1: had losses so had a negative return for that period. 18 00:01:05,240 --> 00:01:08,080 Speaker 1: And actually it's a very few number of companies that 19 00:01:08,160 --> 00:01:11,360 Speaker 1: accounted for the majority of that return. And I think 20 00:01:11,400 --> 00:01:12,880 Speaker 1: that is a trend that we're seeing more and more, 21 00:01:12,880 --> 00:01:16,959 Speaker 1: particularly as you have large tech players with high operating leverage, 22 00:01:17,200 --> 00:01:21,959 Speaker 1: and you're seeing some more global companies and unless you 23 00:01:22,000 --> 00:01:24,680 Speaker 1: can you know, really pick who those winners will be, 24 00:01:24,920 --> 00:01:27,000 Speaker 1: it's got to be hard to even beat the market 25 00:01:27,040 --> 00:01:29,880 Speaker 1: return if you haven't got decent exposure to those very 26 00:01:29,920 --> 00:01:32,039 Speaker 1: few sort of fewer and fewer stocks that are driving 27 00:01:32,080 --> 00:01:37,160 Speaker 1: the big outcomes. And so I do think that moving 28 00:01:37,200 --> 00:01:40,400 Speaker 1: more to that diversified approach is really helpful as we're 29 00:01:40,400 --> 00:01:44,080 Speaker 1: seeing that trend even beyond you know, the volatility we're 30 00:01:44,080 --> 00:01:46,440 Speaker 1: seeing off the back of the Trump saga. 31 00:01:46,680 --> 00:01:50,360 Speaker 2: It's hard to look at say like QQQ, the Nasdaq 32 00:01:50,400 --> 00:01:52,559 Speaker 2: ET or the S and P five hundred and really 33 00:01:52,600 --> 00:01:55,680 Speaker 2: consider either of those to be diversified, given the concentration 34 00:01:55,760 --> 00:01:59,240 Speaker 2: of Magnificent seven and you know, just thinking about like 35 00:01:59,320 --> 00:02:01,840 Speaker 2: you know, people on shares this platform, this is key 36 00:02:01,920 --> 00:02:06,720 Speaker 2: we investors being drawn more to US stocks and they're 37 00:02:06,720 --> 00:02:09,840 Speaker 2: going down this. You get told to diversify your portfolio. 38 00:02:09,960 --> 00:02:12,520 Speaker 2: This American market should be one that you should go into. 39 00:02:12,680 --> 00:02:15,040 Speaker 2: But if you're only going into seven companies that are 40 00:02:15,040 --> 00:02:16,880 Speaker 2: making up the dominance of it, it's hard to wrap 41 00:02:16,880 --> 00:02:20,120 Speaker 2: your head around how you're actually diversifying your investment there, 42 00:02:20,240 --> 00:02:21,840 Speaker 2: or if you're just trying to ride the wave that 43 00:02:21,840 --> 00:02:24,160 Speaker 2: we've all been doing for what last seven eight nine 44 00:02:24,200 --> 00:02:24,639 Speaker 2: years now. 45 00:02:24,800 --> 00:02:26,880 Speaker 1: I remember a time on the ins oft X fifty 46 00:02:26,919 --> 00:02:29,359 Speaker 1: where I think it was fishing, Facal, Healthcare, and A 47 00:02:29,400 --> 00:02:33,359 Speaker 1: two milk collectively we're something like thirty percent of the index, 48 00:02:33,440 --> 00:02:36,240 Speaker 1: and so unless you had for fund managers that didn't 49 00:02:36,240 --> 00:02:38,680 Speaker 1: have a massive exposure to those two, they almost always 50 00:02:38,960 --> 00:02:42,440 Speaker 1: underperformed index at that time. What we are also seeing 51 00:02:42,440 --> 00:02:46,240 Speaker 1: because we call a lot of our KEYSAB members and 52 00:02:46,320 --> 00:02:50,120 Speaker 1: we are are tornture investors all the time. And another 53 00:02:50,160 --> 00:02:53,839 Speaker 1: thing we're seeing is we're actually finalarging investors, not disengaged. 54 00:02:53,919 --> 00:02:55,639 Speaker 1: They're not going I just put my head on the 55 00:02:55,680 --> 00:02:57,800 Speaker 1: set end and try and just forget about this period. 56 00:02:58,240 --> 00:03:01,360 Speaker 1: We are seeing investors actually continue to check in with 57 00:03:01,440 --> 00:03:04,320 Speaker 1: their balances, but also they're saying, actually, this is just 58 00:03:04,400 --> 00:03:06,960 Speaker 1: part and parcel of being an investor. And I think 59 00:03:07,000 --> 00:03:09,600 Speaker 1: that really is a shift in mentality of what we've 60 00:03:09,600 --> 00:03:14,160 Speaker 1: seen in previous periods, particularly amongst retail I'm talking to investors, 61 00:03:14,160 --> 00:03:18,280 Speaker 1: I've seen a really big shift in psychology where where 62 00:03:18,400 --> 00:03:21,040 Speaker 1: it is much more volatility is the price of investing, 63 00:03:21,280 --> 00:03:23,600 Speaker 1: and it's not a penalty. It's not for doing something wrong, 64 00:03:23,639 --> 00:03:27,480 Speaker 1: it's literally the price of being in the market. And actually, 65 00:03:27,520 --> 00:03:29,840 Speaker 1: when I do talk to investors, the things that they're 66 00:03:29,880 --> 00:03:32,720 Speaker 1: worried about is not volatility in the short term and 67 00:03:32,880 --> 00:03:35,000 Speaker 1: they shouldn't be like for investors taking a long enough 68 00:03:35,040 --> 00:03:38,680 Speaker 1: time horizon and advertiate. Volatility in in itself shouldn't be 69 00:03:38,760 --> 00:03:42,120 Speaker 1: the issue. The issue is, you know, can I lose 70 00:03:42,160 --> 00:03:44,440 Speaker 1: some all of my money or am I going to 71 00:03:44,560 --> 00:03:47,160 Speaker 1: get inadequate returns for the risk I'm taking on. Those 72 00:03:47,160 --> 00:03:49,120 Speaker 1: are the issues that investors need to be concerned with, 73 00:03:49,960 --> 00:03:53,440 Speaker 1: not that short term volatility. Investing involves the risk you 74 00:03:53,520 --> 00:03:56,000 Speaker 1: might lose the money you start with. We recommend talking 75 00:03:56,040 --> 00:04:00,000 Speaker 1: to a licensed financial advisor. We also recommend breading products 76 00:04:00,000 --> 00:04:02,200 Speaker 1: displosure documents before deciding to invest.