WEBVTT - Bite: Building wealth beyond property

0:00:01.000 --> 0:00:03.600
<v Speaker 1>You're listening to a sharseise podcast.

0:00:04.040 --> 0:00:06.960
<v Speaker 2>I saw some research out of the UK that said

0:00:07.000 --> 0:00:10.039
<v Speaker 2>that anyone over fifty five, you ask three of them

0:00:10.039 --> 0:00:12.119
<v Speaker 2>about atfs, only one of them is going to have

0:00:12.119 --> 0:00:15.680
<v Speaker 2>heard of those. You ask anyone under thirty four, and

0:00:15.920 --> 0:00:18.720
<v Speaker 2>probably like ninety percent or more will be able to

0:00:18.720 --> 0:00:21.720
<v Speaker 2>tell you what an ETF is. Is there a consistent

0:00:21.800 --> 0:00:26.400
<v Speaker 2>picture that you find and your practice and around the world, Yeah.

0:00:26.440 --> 0:00:29.080
<v Speaker 1>I think so. Yeah, Yeah, I think that's pretty consistent globally,

0:00:30.080 --> 0:00:34.120
<v Speaker 1>And honestly, I think it's driven by one really key

0:00:34.159 --> 0:00:37.200
<v Speaker 1>thing in particular, and that is the demographics around those

0:00:37.200 --> 0:00:40.239
<v Speaker 1>different age groups. So you know, it's quite likely for

0:00:40.280 --> 0:00:42.879
<v Speaker 1>anyone over fifty five that they've been pretty lucky to

0:00:42.960 --> 0:00:46.080
<v Speaker 1>be a property owner in a period where property has

0:00:46.120 --> 0:00:50.959
<v Speaker 1>done extremely well. For people under thirty five, it's very

0:00:50.960 --> 0:00:53.640
<v Speaker 1>hard to get on the property ladder in in most

0:00:53.680 --> 0:00:57.440
<v Speaker 1>property markets globally because price has gone up so much,

0:00:57.640 --> 0:01:01.760
<v Speaker 1>lending has got harder, or borroing's got harder, should say,

0:01:02.120 --> 0:01:04.160
<v Speaker 1>And so you know that there is a whole cohort

0:01:04.200 --> 0:01:07.480
<v Speaker 1>of people now coming through in that age group, under

0:01:07.480 --> 0:01:09.440
<v Speaker 1>a thirty five age group, who are really looking for

0:01:09.480 --> 0:01:13.560
<v Speaker 1>other ways to grow their wealth, and ETFs play a

0:01:13.560 --> 0:01:14.520
<v Speaker 1>big role in that.

0:01:15.360 --> 0:01:18.840
<v Speaker 2>The research that I saw suggested that the kinds of

0:01:18.840 --> 0:01:20.840
<v Speaker 2>people I mean it literally said, it's like a young

0:01:20.880 --> 0:01:25.160
<v Speaker 2>guys game, overwhelming the demographic in the UK, younger males

0:01:25.200 --> 0:01:27.479
<v Speaker 2>eighteen to thirty four are kind of strongly using it.

0:01:27.600 --> 0:01:30.120
<v Speaker 2>They're using it a lot, They're they're making some quite

0:01:30.240 --> 0:01:32.920
<v Speaker 2>quick trades. But some other research I saw out a

0:01:32.959 --> 0:01:35.160
<v Speaker 2>morning Star suggested that a lot of the times people

0:01:35.160 --> 0:01:38.120
<v Speaker 2>investing in ETFs are kind of buying late and missing

0:01:38.240 --> 0:01:41.840
<v Speaker 2>the market, they're trading them quite quite quickly. I mean,

0:01:42.319 --> 0:01:46.200
<v Speaker 2>is there a lesson there just about general investment hygiene?

0:01:46.200 --> 0:01:48.480
<v Speaker 2>I suppose, no matter what financial product you're using.

0:01:48.760 --> 0:01:51.520
<v Speaker 1>Were certainly we know that people that there there are

0:01:51.520 --> 0:01:54.200
<v Speaker 1>investors that are using ets more as trading tools than

0:01:54.360 --> 0:01:58.240
<v Speaker 1>investing tools. The key difference. Being a trading tool is

0:01:58.280 --> 0:02:00.280
<v Speaker 1>basically you just buy and hold it for very short

0:02:00.320 --> 0:02:02.960
<v Speaker 1>period of time. An investing tool you buy and hole

0:02:03.000 --> 0:02:06.600
<v Speaker 1>for a long period of time. Key difference. So we

0:02:06.640 --> 0:02:09.840
<v Speaker 1>do see a bit of that encouragingly, certainly in New Zealand.

0:02:10.520 --> 0:02:12.760
<v Speaker 1>You know, if we look back to for example, COVID

0:02:12.800 --> 0:02:15.959
<v Speaker 1>and some of the other more volatile market periods, we've

0:02:15.960 --> 0:02:20.040
<v Speaker 1>actually seen investors holding through those periods and if anything,

0:02:20.040 --> 0:02:23.320
<v Speaker 1>actually continuing to buy through those periods. So we're starting

0:02:23.320 --> 0:02:25.720
<v Speaker 1>to see more of a buy the mentality here, which

0:02:25.720 --> 0:02:27.799
<v Speaker 1>I think is fantastic. That's the right way to think

0:02:27.840 --> 0:02:31.079
<v Speaker 1>about it. You know, you invest in shares, you invest

0:02:31.120 --> 0:02:33.800
<v Speaker 1>in you buy most things when they're on sale. You know,

0:02:34.160 --> 0:02:36.120
<v Speaker 1>why not buy shares when they're on sale as well?

0:02:37.320 --> 0:02:39.960
<v Speaker 1>So yeah, I think it's slightly different here. Definitely at

0:02:39.960 --> 0:02:43.240
<v Speaker 1>the margin you see more trading. But again, the more

0:02:43.280 --> 0:02:45.600
<v Speaker 1>you trade, the more it costs you, and the more

0:02:45.680 --> 0:02:47.160
<v Speaker 1>likelihood there is of making a mistake.

0:02:48.000 --> 0:02:50.240
<v Speaker 2>Just looking more broadly and more globally, I suppose, have

0:02:50.360 --> 0:02:53.239
<v Speaker 2>we seen any evidence or have you come across any

0:02:53.240 --> 0:02:56.280
<v Speaker 2>suggestion that ETFs are kind of inherently adding to the

0:02:56.320 --> 0:02:59.440
<v Speaker 2>amount of liquidity or volatility in the market.

0:03:00.919 --> 0:03:05.000
<v Speaker 1>They certainly add liquidity. Yeah, you know, if you think about,

0:03:07.040 --> 0:03:10.600
<v Speaker 1>you know, wanting to exit a particular investment, if you

0:03:10.639 --> 0:03:12.840
<v Speaker 1>have a single stock, you know, it might be quite difficult.

0:03:12.840 --> 0:03:14.760
<v Speaker 1>Part could if it's sort of a smaller company or

0:03:14.760 --> 0:03:17.480
<v Speaker 1>that type of thing. Whereas in ETFs, you know, because

0:03:17.480 --> 0:03:22.160
<v Speaker 1>they're broadly diversified, there were sort of get a little

0:03:22.200 --> 0:03:23.960
<v Speaker 1>little technical here, but there are kind of three levels

0:03:23.960 --> 0:03:27.200
<v Speaker 1>of liquidity with ETFs. So you know, essentially, if you

0:03:27.200 --> 0:03:30.120
<v Speaker 1>think about going into a grocery a dairy grocery store,

0:03:30.680 --> 0:03:32.680
<v Speaker 1>you know, and there's a fridge of coke on the floor,

0:03:33.280 --> 0:03:36.600
<v Speaker 1>that's that's your sort of on market liquidity. And then

0:03:36.760 --> 0:03:38.880
<v Speaker 1>you know the dairy's probably got a palette of coke

0:03:39.680 --> 0:03:41.920
<v Speaker 1>sort around the back somewhere in the warehouse, so that's

0:03:42.000 --> 0:03:46.080
<v Speaker 1>your market maker inventory. So in the market makers in

0:03:46.160 --> 0:03:50.680
<v Speaker 1>ETF always holding inventory to meet demand. And then you know,

0:03:50.720 --> 0:03:52.840
<v Speaker 1>if you really need to go big and do a

0:03:52.920 --> 0:03:56.440
<v Speaker 1>very large trade, you've got the individual stocks underlying the ETF,

0:03:56.560 --> 0:03:59.720
<v Speaker 1>which is the factory essentially, so you know you've got

0:03:59.720 --> 0:04:02.160
<v Speaker 1>this momultiple lads of liquidity and ETFs which just don't

0:04:02.200 --> 0:04:03.480
<v Speaker 1>exist in individual shares.

0:04:03.520 --> 0:04:06.560
<v Speaker 2>For example, investing involves the risk you might lose the

0:04:06.560 --> 0:04:09.280
<v Speaker 2>money you start with. We recommend talking to a licensed

0:04:09.280 --> 0:04:13.800
<v Speaker 2>financial advisor. We also recommend reading product disclosure documents before

0:04:13.800 --> 0:04:14.760
<v Speaker 2>deciding to invest.