1 00:00:00,640 --> 00:00:04,880 Speaker 1: Hello, my name's Santasha Nabananga Bamblet. I'm a proud yr 2 00:00:04,920 --> 00:00:08,639 Speaker 1: the Order, Kernie Whoalbury and a waddery woman. And before 3 00:00:08,640 --> 00:00:11,119 Speaker 1: we get started on She's on the Money podcast, I 4 00:00:11,160 --> 00:00:14,280 Speaker 1: would like to acknowledge the traditional custodians of the land 5 00:00:14,400 --> 00:00:17,639 Speaker 1: of which this podcast is recorded on a wondery country, 6 00:00:18,120 --> 00:00:22,560 Speaker 1: acknowledging the elders, the ancestors and the next generation coming through. 7 00:00:23,040 --> 00:00:27,120 Speaker 1: As this podcast is about connecting, empowering, knowledge sharing and 8 00:00:27,200 --> 00:00:30,560 Speaker 1: the storytelling of you to make a difference for today 9 00:00:31,040 --> 00:00:32,599 Speaker 1: and lasting impact for tomorrow. 10 00:00:33,280 --> 00:00:34,120 Speaker 2: Let's get into it. 11 00:00:34,760 --> 00:00:54,080 Speaker 3: She's on the Money, She's on the Money. 12 00:00:57,720 --> 00:01:01,040 Speaker 4: Hello, and welcome to She's on the Money the podcast 13 00:01:01,200 --> 00:01:04,600 Speaker 4: Millennials who want Financial Freedom. My name is Georgia King, 14 00:01:04,680 --> 00:01:07,000 Speaker 4: and joining me as she does each and every Wednesday, 15 00:01:07,080 --> 00:01:08,400 Speaker 4: is Victoria Divine V. 16 00:01:08,560 --> 00:01:11,000 Speaker 5: How are we I'm well, I just had a diet coach. 17 00:01:11,080 --> 00:01:13,000 Speaker 5: I don't know how this option is thriving. 18 00:01:13,520 --> 00:01:16,640 Speaker 4: With so many of our community members either interested in 19 00:01:16,640 --> 00:01:20,440 Speaker 4: investing or active investors, there is nothing we love more 20 00:01:20,480 --> 00:01:23,320 Speaker 4: than doing a deep dive episode into investing and all 21 00:01:23,360 --> 00:01:26,319 Speaker 4: the various topics within that to help people along on 22 00:01:26,440 --> 00:01:28,920 Speaker 4: their journey up on the show. Today we're looking at 23 00:01:28,959 --> 00:01:31,039 Speaker 4: active and passive investing. 24 00:01:31,120 --> 00:01:34,560 Speaker 5: Be this sounds very exciting for me, don't know about you. 25 00:01:34,840 --> 00:01:35,960 Speaker 5: How are you feeling about it? 26 00:01:36,040 --> 00:01:39,360 Speaker 4: Well, I'm curious to learn what it all means, So 27 00:01:39,400 --> 00:01:40,080 Speaker 4: I'm excited. 28 00:01:40,360 --> 00:01:44,319 Speaker 5: Sounds so apprecisive when we're not doing something that You're like, 29 00:01:44,800 --> 00:01:48,040 Speaker 5: I am passionate about this topic. Well, lucky, I am 30 00:01:48,160 --> 00:01:50,920 Speaker 5: really passionate about this topic. So there is going to 31 00:01:50,920 --> 00:01:53,040 Speaker 5: be so much on this episode to unpack when it 32 00:01:53,080 --> 00:01:56,000 Speaker 5: comes to investing, because your investment options and journey are 33 00:01:56,160 --> 00:01:58,320 Speaker 5: arguably as unique as you are. 34 00:01:58,640 --> 00:02:00,000 Speaker 2: Some of you real unique. 35 00:02:00,840 --> 00:02:05,400 Speaker 5: However, most investors usually fit into two categories, and those 36 00:02:05,440 --> 00:02:08,320 Speaker 5: categories are active and passive investors. 37 00:02:08,639 --> 00:02:10,840 Speaker 2: So this basically refers to the. 38 00:02:10,840 --> 00:02:14,880 Speaker 5: Two different ways of managing your investment portfolio, and today 39 00:02:14,960 --> 00:02:17,160 Speaker 5: we are going to define what each of these are 40 00:02:17,240 --> 00:02:19,240 Speaker 5: and look at some pros and cons for each to 41 00:02:19,280 --> 00:02:22,400 Speaker 5: help you choose what path might suit your capabilities and 42 00:02:22,480 --> 00:02:24,200 Speaker 5: your situation the best. 43 00:02:24,440 --> 00:02:27,280 Speaker 4: I like the sound of passive investing better just my 44 00:02:27,400 --> 00:02:28,960 Speaker 4: personal opinion of the top. 45 00:02:28,960 --> 00:02:31,400 Speaker 5: But I don't really know, because you're more of a passive, 46 00:02:31,560 --> 00:02:33,239 Speaker 5: caressive type of communicator. 47 00:02:33,240 --> 00:02:37,840 Speaker 4: Who who whoa more just like a passive person yess 48 00:02:37,960 --> 00:02:38,600 Speaker 4: like creature. 49 00:02:39,440 --> 00:02:41,240 Speaker 2: It's a cube with that covered off. 50 00:02:41,280 --> 00:02:43,639 Speaker 4: Now we know what I'm interested in. Let's talk about 51 00:02:43,680 --> 00:02:45,120 Speaker 4: active stuff. 52 00:02:45,160 --> 00:02:47,639 Speaker 5: On the sloth saying, have you seen that video by 53 00:02:47,919 --> 00:02:50,679 Speaker 5: Kristen Bell or it's got Kristen Bell in it? Oh, 54 00:02:50,880 --> 00:02:53,760 Speaker 5: kristin Kristen Bell. She's on Ellen and Ellen gets her 55 00:02:53,760 --> 00:02:56,240 Speaker 5: a sloth and she just breaks and cries, what do 56 00:02:56,280 --> 00:02:56,960 Speaker 5: you mean a sloth? 57 00:02:57,320 --> 00:02:58,080 Speaker 2: Are you joking? 58 00:02:58,240 --> 00:03:00,720 Speaker 5: So Kristen Bell said that her face favor animal in 59 00:03:00,760 --> 00:03:03,440 Speaker 5: the entire world was a sloth, and so she went 60 00:03:03,480 --> 00:03:07,400 Speaker 5: on the Ellen Show and then Ellen gotterisloth and she's 61 00:03:07,440 --> 00:03:08,120 Speaker 5: just there crying. 62 00:03:08,160 --> 00:03:09,080 Speaker 2: I'll show you after the ap. 63 00:03:09,440 --> 00:03:12,080 Speaker 5: Everyone should google it because it's real wholesome content. All right, 64 00:03:12,120 --> 00:03:14,519 Speaker 5: speaking of good content, let's go back to our sloth 65 00:03:14,639 --> 00:03:16,400 Speaker 5: versus like a cheater investing scheme. 66 00:03:16,520 --> 00:03:18,160 Speaker 4: I like that scheme. Did you say that? 67 00:03:18,280 --> 00:03:19,880 Speaker 2: Let's remove that worth? Yeap? Great? 68 00:03:20,080 --> 00:03:22,920 Speaker 4: Moving on active investing, tell me all about it all. 69 00:03:22,880 --> 00:03:25,640 Speaker 5: Right, Before we jump into defining exactly what those two 70 00:03:25,639 --> 00:03:29,080 Speaker 5: things are, Georgia King, let's do a little comparison. So 71 00:03:29,240 --> 00:03:31,840 Speaker 5: a big difference between these two different ways of managing 72 00:03:31,880 --> 00:03:35,440 Speaker 5: your portfolio. Is that generally an active investor is they're 73 00:03:35,440 --> 00:03:38,400 Speaker 5: trying to beat the market, whereas a passive investor is 74 00:03:38,400 --> 00:03:41,120 Speaker 5: trying to track the market. So we get a pinpoint 75 00:03:41,200 --> 00:03:43,520 Speaker 5: that there, so that you know right off the bat 76 00:03:43,560 --> 00:03:45,800 Speaker 5: there is quite a big difference between the two. It's 77 00:03:45,800 --> 00:03:48,720 Speaker 5: not just how you act towards your portfolio, it's also 78 00:03:48,720 --> 00:03:52,120 Speaker 5: about the types of returns you are anticipating as an investor. 79 00:03:52,640 --> 00:03:55,880 Speaker 5: Back to your question, what is an active investor? So 80 00:03:56,160 --> 00:03:59,520 Speaker 5: active investors tend to pretty keenly watch the market. They 81 00:03:59,520 --> 00:04:03,080 Speaker 5: are very likely to trade as they see fit, so 82 00:04:03,120 --> 00:04:05,800 Speaker 5: they will be in and out of their chase's portfolio 83 00:04:05,920 --> 00:04:10,120 Speaker 5: quite often, buying and selling assets because they have usually 84 00:04:10,600 --> 00:04:14,280 Speaker 5: a better education than the average bear. When it comes 85 00:04:14,320 --> 00:04:17,280 Speaker 5: to what the share market is doing, active investors are 86 00:04:17,320 --> 00:04:21,359 Speaker 5: generally chasing shorter term gains i'd say so quicker profits 87 00:04:21,360 --> 00:04:24,640 Speaker 5: from their investments. Let's remember what happens when you want 88 00:04:25,040 --> 00:04:29,479 Speaker 5: higher profits though, gee higher risk I'm not even needed. 89 00:04:30,360 --> 00:04:34,000 Speaker 5: And some active investors they choose to engage with professional 90 00:04:34,040 --> 00:04:37,400 Speaker 5: fund managers to actively manage their investments on their behalf. 91 00:04:37,760 --> 00:04:38,920 Speaker 2: So just because you're an. 92 00:04:38,839 --> 00:04:41,159 Speaker 5: Active investor doesn't mean you're going straight to your shares's 93 00:04:41,240 --> 00:04:43,559 Speaker 5: or your share trading platform and buying and selling shares 94 00:04:43,600 --> 00:04:46,880 Speaker 5: on your own. You might actually choose a managed fund 95 00:04:46,960 --> 00:04:50,840 Speaker 5: to put your money in. That's actively investing on your behalf. 96 00:04:51,480 --> 00:04:56,360 Speaker 5: Keep in mind here, active investing is usually more expensive 97 00:04:56,440 --> 00:04:58,880 Speaker 5: than passive investing. I'm sure we'll get to this later 98 00:04:58,960 --> 00:05:01,640 Speaker 5: with the questions that you've got, but I'm just pinning 99 00:05:01,680 --> 00:05:05,080 Speaker 5: it here for good reference. And the reason is because 100 00:05:05,120 --> 00:05:08,560 Speaker 5: active investing requires a lot more work than just passively 101 00:05:08,600 --> 00:05:11,039 Speaker 5: tracking or just going and buying an ETF or just 102 00:05:11,080 --> 00:05:14,360 Speaker 5: tracking the index of a market, whereas active investing is 103 00:05:14,400 --> 00:05:16,080 Speaker 5: really about buying and selling and trying to get a 104 00:05:16,120 --> 00:05:19,520 Speaker 5: really good profit. And again more risk, but also more work. 105 00:05:19,760 --> 00:05:20,880 Speaker 2: Okay, it makes sense. 106 00:05:20,920 --> 00:05:24,560 Speaker 4: It's interesting. Yes, this makes sense. It sounds slightly exhausting, 107 00:05:24,600 --> 00:05:28,440 Speaker 4: but that's okay. Tell me, first off, the pros of 108 00:05:28,560 --> 00:05:30,120 Speaker 4: active investing, please. 109 00:05:29,839 --> 00:05:30,360 Speaker 2: Be all right. 110 00:05:30,400 --> 00:05:33,200 Speaker 5: So, because investors are trying to beat the market, as 111 00:05:33,200 --> 00:05:36,440 Speaker 5: we said before, when they succeed, it can pay off, 112 00:05:36,520 --> 00:05:41,960 Speaker 5: which is nice. They have usually higher than average returns. However, 113 00:05:42,279 --> 00:05:45,200 Speaker 5: that obviously I'm going to keep going back to, it 114 00:05:45,240 --> 00:05:47,440 Speaker 5: goes back to their risk profile. So this might not 115 00:05:47,560 --> 00:05:52,120 Speaker 5: be for everyone. This approach obviously, also, George requires a 116 00:05:52,160 --> 00:05:55,440 Speaker 5: bit more experience, a lot more confidence when it comes 117 00:05:55,480 --> 00:05:58,800 Speaker 5: to investing, and a higher level of engagement. So when 118 00:05:58,839 --> 00:06:00,599 Speaker 5: I say a higher level of ink agent, we're not 119 00:06:00,600 --> 00:06:03,320 Speaker 5: talking about rings here or if you'd like to see mine, 120 00:06:03,400 --> 00:06:06,120 Speaker 5: just ask any time. I'm willing to show it off. 121 00:06:06,360 --> 00:06:08,600 Speaker 5: But it's more about the time, energy and effort that 122 00:06:08,640 --> 00:06:11,080 Speaker 5: you need to put into looking at the markets and 123 00:06:11,120 --> 00:06:14,920 Speaker 5: your portfolio, whereas passive will be a bit different then 124 00:06:15,120 --> 00:06:18,039 Speaker 5: it would typically involve, as we said before, higher risk. 125 00:06:18,120 --> 00:06:20,440 Speaker 5: I need to disclaimer this a million times because if 126 00:06:20,440 --> 00:06:23,440 Speaker 5: we're going to talk about strategies, the higher the reward, 127 00:06:23,560 --> 00:06:28,440 Speaker 5: the higher the risk, which should always be taken into account. Obviously, George, 128 00:06:28,440 --> 00:06:31,080 Speaker 5: this is for a lot of people a con but 129 00:06:31,200 --> 00:06:33,760 Speaker 5: it can also be a pro that it involves higher 130 00:06:33,839 --> 00:06:37,120 Speaker 5: risk because with higher risk comes higher reward, which does 131 00:06:37,200 --> 00:06:39,800 Speaker 5: need to be taken into consideration, which is why some 132 00:06:39,839 --> 00:06:42,960 Speaker 5: people actually choose to engage with an active fund manager 133 00:06:43,000 --> 00:06:46,560 Speaker 5: to oversee their investments instead of taking all of that 134 00:06:46,640 --> 00:06:48,960 Speaker 5: on themselves. And I mean, I don't think it's the 135 00:06:48,960 --> 00:06:51,840 Speaker 5: worst idea to outsource it instead of being a direct 136 00:06:51,880 --> 00:06:54,840 Speaker 5: share investor, because if I'm trying to be risky. Who 137 00:06:54,839 --> 00:06:57,279 Speaker 5: am I going to trust to help me? Probably a 138 00:06:57,320 --> 00:07:00,680 Speaker 5: fund manager who does that forty hours on them. It's 139 00:07:00,720 --> 00:07:03,000 Speaker 5: not forty hours, they work like sixty hour weeks being 140 00:07:03,000 --> 00:07:05,719 Speaker 5: fund managers. But I'm probably going to look at a 141 00:07:05,720 --> 00:07:08,160 Speaker 5: fund manager instead of me, who might be a nurse 142 00:07:08,200 --> 00:07:10,440 Speaker 5: or a midwife, Like, how on earth would you not 143 00:07:10,520 --> 00:07:11,040 Speaker 5: as how would you. 144 00:07:11,080 --> 00:07:12,040 Speaker 4: Keep up with it exactly? 145 00:07:12,120 --> 00:07:14,520 Speaker 5: How are you going to allocate that much time, energy 146 00:07:14,560 --> 00:07:17,400 Speaker 5: and effort into tracking the markets? I just I'm a 147 00:07:17,520 --> 00:07:20,440 Speaker 5: very strong believer in seeking professional advice where you can 148 00:07:20,480 --> 00:07:20,960 Speaker 5: afford it. 149 00:07:21,080 --> 00:07:23,360 Speaker 4: Yeah, Okay, I was going to say, this does seem 150 00:07:23,400 --> 00:07:26,840 Speaker 4: too complex to kind of do yourself unless you're someone. 151 00:07:26,680 --> 00:07:29,120 Speaker 5: Like Cant, But I also have lots of friends who 152 00:07:29,120 --> 00:07:31,679 Speaker 5: are just really interested in it, right YEA, Like since 153 00:07:31,680 --> 00:07:34,560 Speaker 5: we've been working with Chasy's. Absolutely not a shameless plug, 154 00:07:34,720 --> 00:07:37,240 Speaker 5: but since we've been working with Chazy's, I feel like 155 00:07:37,640 --> 00:07:39,240 Speaker 5: a lot of our community and a lot of my 156 00:07:39,320 --> 00:07:42,440 Speaker 5: friends have felt as though it's a bit more accessible 157 00:07:42,520 --> 00:07:44,760 Speaker 5: than it used to be to like download an investing 158 00:07:44,840 --> 00:07:46,600 Speaker 5: up like Jess ask her. 159 00:07:46,720 --> 00:07:47,680 Speaker 2: She now has her. 160 00:07:47,600 --> 00:07:50,800 Speaker 5: Own little chaseas platform and she buys shares that she 161 00:07:51,160 --> 00:07:53,920 Speaker 5: wants and believes in, and I think that that's kind 162 00:07:53,920 --> 00:07:56,800 Speaker 5: of cool. And this goes back to we've spoken about 163 00:07:56,800 --> 00:07:59,960 Speaker 5: it on the podcast before, about the strategy you employed, 164 00:08:00,000 --> 00:08:02,360 Speaker 5: and if we're going to talk about Jess, she has 165 00:08:02,400 --> 00:08:05,040 Speaker 5: what's called a core satellite approach, and I'm only talking 166 00:08:05,040 --> 00:08:06,520 Speaker 5: about it because I know we've mentioned it on the 167 00:08:06,520 --> 00:08:09,560 Speaker 5: podcast before. And that's why she has a core portfolio 168 00:08:10,080 --> 00:08:14,080 Speaker 5: of tried, true products that she doesn't really manage herself 169 00:08:14,480 --> 00:08:16,960 Speaker 5: and then shares is for her. Is her like dabble 170 00:08:17,000 --> 00:08:19,240 Speaker 5: in things she's really interested in and keep up with 171 00:08:19,280 --> 00:08:22,240 Speaker 5: the market. But she's never investing as much on that 172 00:08:22,320 --> 00:08:25,400 Speaker 5: platform as she is in her actual investment account. So 173 00:08:25,520 --> 00:08:29,440 Speaker 5: investment account, I would argue, is more of a passive investment, 174 00:08:30,000 --> 00:08:32,840 Speaker 5: but she's still actively investing on the side. And I 175 00:08:32,880 --> 00:08:36,160 Speaker 5: think that's important to mention here because you might see 176 00:08:36,200 --> 00:08:38,760 Speaker 5: pros and cons on both sides of the table. That 177 00:08:38,800 --> 00:08:40,640 Speaker 5: doesn't mean you have to only sit on one side 178 00:08:40,640 --> 00:08:43,120 Speaker 5: of the table, because that's actually kind of how I 179 00:08:43,280 --> 00:08:46,720 Speaker 5: employ my own investment strategy as well. Most of my 180 00:08:46,840 --> 00:08:50,120 Speaker 5: wealth or most of my share portfolio is sitting in 181 00:08:50,360 --> 00:08:54,480 Speaker 5: a relatively passive investment type but because I am who 182 00:08:54,520 --> 00:08:56,920 Speaker 5: I am, and I'm obsessed with the markets. You best 183 00:08:56,960 --> 00:08:59,319 Speaker 5: believe I'm having a bit of fun on the side. 184 00:08:59,600 --> 00:09:01,440 Speaker 5: So I think it's interesting to just talk about it 185 00:09:01,440 --> 00:09:03,560 Speaker 5: in that way, because as much as you might be 186 00:09:03,600 --> 00:09:05,080 Speaker 5: more of a passive or you might be more of 187 00:09:05,080 --> 00:09:07,200 Speaker 5: an active investor, doesn't mean you can't have a look 188 00:09:07,240 --> 00:09:09,520 Speaker 5: at both and find a way to make that work 189 00:09:09,559 --> 00:09:12,840 Speaker 5: for you. Because who am I, I'm Victoria, I'm a 190 00:09:13,120 --> 00:09:17,280 Speaker 5: arguably quite passive investor. Am I actively investing to well, yes, 191 00:09:17,679 --> 00:09:20,120 Speaker 5: but we need to have a talk about that structure 192 00:09:20,160 --> 00:09:22,560 Speaker 5: and how it might work for you or not work 193 00:09:22,600 --> 00:09:25,040 Speaker 5: for you, because it depends on your ability to take 194 00:09:25,080 --> 00:09:27,560 Speaker 5: on risk. So the last point I want to mention 195 00:09:27,720 --> 00:09:31,840 Speaker 5: there is we talked about active fund managers managing your 196 00:09:32,040 --> 00:09:35,360 Speaker 5: actively invested portfolio, and one of the other benefits to 197 00:09:35,480 --> 00:09:39,000 Speaker 5: having a fund manager if you're in that circumstance is 198 00:09:39,200 --> 00:09:42,959 Speaker 5: often fund managers have access to products that the average 199 00:09:43,000 --> 00:09:44,680 Speaker 5: person can't get access to. 200 00:09:45,400 --> 00:09:46,839 Speaker 4: That doesn't seem fair. 201 00:09:47,000 --> 00:09:49,280 Speaker 5: Look it's not fair, but it actually makes sense. So 202 00:09:49,679 --> 00:09:54,040 Speaker 5: often in that circumstance, your active fund manager plays the 203 00:09:54,080 --> 00:09:57,440 Speaker 5: third party, and when it comes to different asset types, 204 00:09:57,880 --> 00:10:01,600 Speaker 5: often with the more active when they're issued by the. 205 00:10:01,679 --> 00:10:02,679 Speaker 2: Product issue, you are. 206 00:10:02,880 --> 00:10:05,240 Speaker 5: The product issue is like, I don't want to deal 207 00:10:05,320 --> 00:10:08,000 Speaker 5: with George from down the street. I don't care George 208 00:10:08,000 --> 00:10:11,400 Speaker 5: if you've got five hundred dollars to invest I'm a big, active, 209 00:10:11,440 --> 00:10:14,240 Speaker 5: billion dollar company. I just want to deal with big 210 00:10:14,240 --> 00:10:16,439 Speaker 5: dogs because it makes my life a whole lot easier. 211 00:10:16,640 --> 00:10:18,480 Speaker 5: So I'm going to put this product on the market. 212 00:10:18,840 --> 00:10:21,280 Speaker 5: I'm then going to put an entry point on that 213 00:10:21,400 --> 00:10:25,360 Speaker 5: product to say, all right, this is a actively managed product 214 00:10:25,480 --> 00:10:27,439 Speaker 5: and you need a minimum of thirty thousand dollars to 215 00:10:27,520 --> 00:10:30,400 Speaker 5: invest in it. Some of them are even more so 216 00:10:30,920 --> 00:10:33,400 Speaker 5: wouldn't be accessible for you if you wanted to get 217 00:10:33,400 --> 00:10:35,600 Speaker 5: into it, although I know you're a pretty good saver, 218 00:10:35,760 --> 00:10:36,560 Speaker 5: so maybe it would be. 219 00:10:36,720 --> 00:10:37,320 Speaker 2: Who knows. 220 00:10:37,960 --> 00:10:41,040 Speaker 5: However, an active fund manager might go all right, no problems. 221 00:10:41,080 --> 00:10:43,840 Speaker 5: Product provider will buy fifty of those, They put that 222 00:10:43,960 --> 00:10:46,360 Speaker 5: in their fund, and then when you bring your money 223 00:10:46,400 --> 00:10:49,839 Speaker 5: to your fund manager, they go, hey, here's an ETF 224 00:10:49,920 --> 00:10:52,240 Speaker 5: or here's a product that we've made up, and we 225 00:10:52,320 --> 00:10:56,440 Speaker 5: will give you access via us to that product that's 226 00:10:56,559 --> 00:11:00,520 Speaker 5: usually inaccessible. So you're five hundred dollars now can be 227 00:11:00,559 --> 00:11:03,160 Speaker 5: invested in that product, but it could never go directly 228 00:11:03,200 --> 00:11:04,400 Speaker 5: to the product issuer. 229 00:11:04,559 --> 00:11:05,440 Speaker 2: Does that make sense? 230 00:11:05,520 --> 00:11:08,200 Speaker 4: Yeah, yeah, it does. Okay, thank you for covering that up. 231 00:11:08,320 --> 00:11:08,880 Speaker 2: No problem. 232 00:11:09,000 --> 00:11:12,319 Speaker 4: The tell me about the negative side to active investment. 233 00:11:12,040 --> 00:11:14,600 Speaker 5: Right, Long story short, George, you still need to do 234 00:11:14,640 --> 00:11:16,880 Speaker 5: your due diligence, like you don't get out of that. 235 00:11:17,080 --> 00:11:18,960 Speaker 5: You need to make sure that you are making a 236 00:11:19,000 --> 00:11:22,680 Speaker 5: good decision when choosing a fund manager. Because you're placing 237 00:11:22,720 --> 00:11:24,880 Speaker 5: a lot of trust in them. It's a bit more risky. 238 00:11:25,080 --> 00:11:28,760 Speaker 5: Human error is still possible, and basically they could misjudge 239 00:11:28,800 --> 00:11:32,240 Speaker 5: the market and choose underperforming stocks l DR. That's what 240 00:11:32,360 --> 00:11:35,000 Speaker 5: could happen, and that could be a pretty negative outcome 241 00:11:35,040 --> 00:11:37,920 Speaker 5: for you because there's usually a little bit more to 242 00:11:38,040 --> 00:11:41,800 Speaker 5: lose in active stocks because risk return reward chart. 243 00:11:42,000 --> 00:11:44,480 Speaker 4: In terms of choosing a fund manager, though, v is 244 00:11:44,520 --> 00:11:46,920 Speaker 4: that as simple as plugging it into Google and seeing 245 00:11:46,920 --> 00:11:48,440 Speaker 4: what comes up. How do you actually find someone? 246 00:11:48,559 --> 00:11:49,280 Speaker 2: You could google it. 247 00:11:49,559 --> 00:11:51,320 Speaker 5: Another way to do it would be to just go 248 00:11:51,400 --> 00:11:54,320 Speaker 5: to the ASX website and see who is listed as 249 00:11:54,320 --> 00:11:57,080 Speaker 5: a fund manager. They actually have a full page that's 250 00:11:57,160 --> 00:12:01,360 Speaker 5: called fund Managers and Responsible Entity and they've got names 251 00:12:01,400 --> 00:12:03,839 Speaker 5: on there that you've probably heard of before. So you've 252 00:12:03,840 --> 00:12:07,840 Speaker 5: got amp Capital, you've got Antari's, you've got Antipdes, you've 253 00:12:07,880 --> 00:12:10,600 Speaker 5: got os Bill, Australian Ethical. You might have heard of 254 00:12:10,640 --> 00:12:13,840 Speaker 5: equity trustees before. You might have heard of in Sync 255 00:12:14,080 --> 00:12:17,760 Speaker 5: or Investo or JP Morgan. They've got Macquarie and MLC. 256 00:12:17,840 --> 00:12:21,160 Speaker 5: I'm perpetual. I'm not recommending any of those, but they 257 00:12:21,160 --> 00:12:24,960 Speaker 5: are brands that you've arguably heard of before that you 258 00:12:25,000 --> 00:12:27,840 Speaker 5: could look into as an option for you. Something I 259 00:12:27,880 --> 00:12:30,280 Speaker 5: would say first is, before you go, I want to 260 00:12:30,280 --> 00:12:33,000 Speaker 5: be an active investor, sit down and write a list 261 00:12:33,000 --> 00:12:36,160 Speaker 5: of your values and what you're actually looking for, because 262 00:12:36,160 --> 00:12:40,480 Speaker 5: it can be so overwhelming going to platforms and going okay, 263 00:12:40,520 --> 00:12:41,640 Speaker 5: well what does Alan Gray do? 264 00:12:41,760 --> 00:12:43,640 Speaker 2: Alright, look at this, this, this, and this. 265 00:12:44,000 --> 00:12:46,000 Speaker 5: You can probably wipe off more than half of them 266 00:12:46,000 --> 00:12:48,679 Speaker 5: to begin with, because you might have written down on 267 00:12:48,720 --> 00:12:51,440 Speaker 5: your list of you know, non negotiables, that you don't 268 00:12:51,480 --> 00:12:54,160 Speaker 5: want to invest in fossil fuels, and that you wanted 269 00:12:54,200 --> 00:12:57,040 Speaker 5: ethical portfolio, and you want all these other things. So 270 00:12:57,200 --> 00:12:59,800 Speaker 5: from my perspective, i'd get my values in line before 271 00:12:59,800 --> 00:13:02,559 Speaker 5: a go and find a product, because it's much easier 272 00:13:02,600 --> 00:13:05,319 Speaker 5: to find a product that aligns to your values, then 273 00:13:05,360 --> 00:13:07,760 Speaker 5: look at every single product and go would I accept 274 00:13:07,840 --> 00:13:10,200 Speaker 5: this or not? So that's what I would be doing 275 00:13:10,200 --> 00:13:13,840 Speaker 5: when it comes to picking a fund, having chats with friends, 276 00:13:13,920 --> 00:13:16,959 Speaker 5: understanding what they're doing. Seeing a financial advisor if you're 277 00:13:16,960 --> 00:13:19,520 Speaker 5: planning on being an active investor, I do think it's 278 00:13:19,559 --> 00:13:22,880 Speaker 5: really important to consider advice if it's within your financial 279 00:13:22,920 --> 00:13:26,840 Speaker 5: realm of capabilities. If not, obviously I get it. Many 280 00:13:26,880 --> 00:13:31,280 Speaker 5: financial advisors are aligned with institutions though, so I would 281 00:13:31,320 --> 00:13:35,920 Speaker 5: be quite aware of that when seeking financial advice here 282 00:13:35,920 --> 00:13:39,120 Speaker 5: in Australia. I would say, not everyone's going to agree 283 00:13:39,120 --> 00:13:40,679 Speaker 5: with me, but you guys will probably get a bit 284 00:13:40,720 --> 00:13:44,720 Speaker 5: out of this. There's three types of financial advisor. There's 285 00:13:44,760 --> 00:13:48,440 Speaker 5: insto advisors, so they're financial advisors who might work for 286 00:13:48,480 --> 00:13:51,480 Speaker 5: a specific institution. So you might go down to one 287 00:13:51,520 --> 00:13:53,680 Speaker 5: of the big four banks and say, hello, big four bank, 288 00:13:53,679 --> 00:13:55,920 Speaker 5: I'd like to speak to one of your financial advisors. 289 00:13:56,320 --> 00:13:59,400 Speaker 5: And that doesn't mean that they're not qualified. They absolutely are. 290 00:13:59,640 --> 00:14:03,720 Speaker 5: But the product access they have is always within the 291 00:14:03,880 --> 00:14:06,880 Speaker 5: silo of that bank. So if you went to Westpac, 292 00:14:07,040 --> 00:14:10,360 Speaker 5: they're only going to offer you Westpac products because that 293 00:14:10,440 --> 00:14:13,880 Speaker 5: makes sense right. Then you have the difference, and I 294 00:14:13,880 --> 00:14:16,160 Speaker 5: think a lot of people get confused here because you go, 295 00:14:16,280 --> 00:14:19,800 Speaker 5: are you independent or not? If you ask me that question, 296 00:14:20,360 --> 00:14:23,560 Speaker 5: I hate answering it because I'm technically not an independent 297 00:14:23,640 --> 00:14:27,640 Speaker 5: financial advisor because I am signed through a licensee. So 298 00:14:27,720 --> 00:14:29,840 Speaker 5: you guys know that at the end of every single 299 00:14:29,840 --> 00:14:33,440 Speaker 5: episode you would hear our disclaimer about general advice and 300 00:14:33,520 --> 00:14:37,160 Speaker 5: that I am signed within Focus in Focus hold my 301 00:14:37,240 --> 00:14:40,520 Speaker 5: financial services license and I pay them a fee each 302 00:14:40,560 --> 00:14:42,960 Speaker 5: and every single year to make sure that I meet 303 00:14:43,000 --> 00:14:45,720 Speaker 5: compliance that I'm doing the right thing. They're kind of 304 00:14:45,800 --> 00:14:48,840 Speaker 5: like my financial guardian. They do a lot to make 305 00:14:48,880 --> 00:14:51,720 Speaker 5: sure that I'm safe and my clients are safe. And 306 00:14:51,800 --> 00:14:54,640 Speaker 5: they have what's called an APL so they have an 307 00:14:54,680 --> 00:14:58,320 Speaker 5: approved products list, but that products list is not just 308 00:14:58,400 --> 00:15:02,160 Speaker 5: one product, it's basically everything in the market that meets 309 00:15:02,200 --> 00:15:06,000 Speaker 5: their criteria for being safe to invest in that they go, 310 00:15:06,080 --> 00:15:09,640 Speaker 5: we'd be comfortable with you doing that. However, as a 311 00:15:09,680 --> 00:15:14,240 Speaker 5: financial advisor working with them, if I then decide, all right, well, 312 00:15:14,280 --> 00:15:17,080 Speaker 5: I've looked at Georgia king circumstances, and I've done a 313 00:15:17,080 --> 00:15:19,640 Speaker 5: whole heap of research, and what I found is that 314 00:15:19,800 --> 00:15:22,080 Speaker 5: her circumstances lead me down the track of picking this 315 00:15:22,160 --> 00:15:25,200 Speaker 5: product that's not on my apl I can actually go 316 00:15:25,280 --> 00:15:28,280 Speaker 5: have a chat within Focus be like, this is G's situation, 317 00:15:28,720 --> 00:15:30,600 Speaker 5: this is the product I want to put her in. 318 00:15:30,760 --> 00:15:33,480 Speaker 5: Here are the reasons, and they go, no problems at all. 319 00:15:33,800 --> 00:15:36,800 Speaker 5: We will do what's called a non core approval, and 320 00:15:36,840 --> 00:15:39,880 Speaker 5: so that is where they approve me to give advice 321 00:15:39,920 --> 00:15:42,680 Speaker 5: to you because it's putting you in the best possible position, 322 00:15:42,880 --> 00:15:46,160 Speaker 5: but it's not part of their core offering. So in 323 00:15:46,200 --> 00:15:48,080 Speaker 5: Focus are always trying to put my clients in the 324 00:15:48,120 --> 00:15:51,120 Speaker 5: best possible position where I can use whatever I like 325 00:15:51,160 --> 00:15:53,240 Speaker 5: as long as I can justify it and put my 326 00:15:53,280 --> 00:15:54,760 Speaker 5: clients in the best possible position. 327 00:15:54,920 --> 00:15:55,120 Speaker 4: Right. 328 00:15:55,960 --> 00:16:00,960 Speaker 5: Then you have traditional independent advisors. That's where they have 329 00:16:01,040 --> 00:16:04,920 Speaker 5: their own license, so the compliance and all the management 330 00:16:05,040 --> 00:16:07,160 Speaker 5: is on them and they run it and they can 331 00:16:07,200 --> 00:16:10,560 Speaker 5: basically do whatever they would like. And there's always been 332 00:16:10,760 --> 00:16:15,600 Speaker 5: this er towards wanting a financial advisor who's independent, But 333 00:16:15,680 --> 00:16:19,160 Speaker 5: from my perspective, I just don't want someone who's aligned 334 00:16:19,200 --> 00:16:22,320 Speaker 5: to a particular type of product. I want someone who 335 00:16:22,520 --> 00:16:25,480 Speaker 5: doesn't take commission or my investment product at all, because 336 00:16:25,520 --> 00:16:28,360 Speaker 5: I find that very unethical and I want someone to 337 00:16:28,400 --> 00:16:30,640 Speaker 5: put me in the best possible position. So whether you 338 00:16:30,720 --> 00:16:33,440 Speaker 5: go with someone who has a financial services license through 339 00:16:33,480 --> 00:16:37,120 Speaker 5: a third party or you go with someone who's completely independent. 340 00:16:37,480 --> 00:16:40,360 Speaker 5: To me, it's more about are you going to put 341 00:16:40,360 --> 00:16:43,360 Speaker 5: me in the best possible position, do you have great reviews, 342 00:16:43,600 --> 00:16:46,120 Speaker 5: have you put clients in the best possible position for 343 00:16:46,200 --> 00:16:49,040 Speaker 5: a while, and are you not clipping the ticket on 344 00:16:49,160 --> 00:16:52,000 Speaker 5: my investment product? Because to me, that's ikey. Does that 345 00:16:52,040 --> 00:16:55,120 Speaker 5: make sense in terms of those three level they're not 346 00:16:55,240 --> 00:16:58,720 Speaker 5: levels really, it's just like three ways that financial advisors 347 00:16:58,840 --> 00:17:00,720 Speaker 5: exist here in a yep. 348 00:17:00,880 --> 00:17:02,360 Speaker 2: Yeah, So that's a little bit of a tangent. 349 00:17:02,440 --> 00:17:05,240 Speaker 5: So a few more cons of active investing before I 350 00:17:05,320 --> 00:17:07,160 Speaker 5: let you go to a quick break because I think 351 00:17:07,200 --> 00:17:09,360 Speaker 5: you need a breather after I'm like throwing. 352 00:17:09,040 --> 00:17:09,680 Speaker 4: This at you. 353 00:17:10,320 --> 00:17:14,120 Speaker 5: But it does cost more money for you to actively invest. 354 00:17:14,240 --> 00:17:17,200 Speaker 5: As we said before, often fees for managed funds include 355 00:17:17,240 --> 00:17:20,280 Speaker 5: management and administration because it does take a bit more. 356 00:17:20,680 --> 00:17:23,760 Speaker 5: But remember that performance can greatly differ between managed funds, 357 00:17:23,760 --> 00:17:26,760 Speaker 5: so the fees they charge are important to take into consideration. 358 00:17:27,560 --> 00:17:31,600 Speaker 5: But as somebody who works with a lot of active investors, 359 00:17:31,640 --> 00:17:33,280 Speaker 5: I'm happy to pay a higher fee for a better 360 00:17:33,359 --> 00:17:35,879 Speaker 5: quality product. I'm happy to pay a higher fee for 361 00:17:35,920 --> 00:17:38,520 Speaker 5: a better fund manager. So I think it's just all 362 00:17:38,560 --> 00:17:41,600 Speaker 5: about not finding the cheapest but finding the best outcome 363 00:17:41,680 --> 00:17:46,159 Speaker 5: for your particular circumstances. And then, obviously, active investing is 364 00:17:46,160 --> 00:17:48,560 Speaker 5: a highly involved strategy, so you need to be quite 365 00:17:48,600 --> 00:17:51,240 Speaker 5: aware of the time you need for stock analysis and 366 00:17:51,320 --> 00:17:53,840 Speaker 5: keeping up with market movements if you choose this strategy 367 00:17:53,880 --> 00:17:56,000 Speaker 5: and you're not going to go with a fund manager. 368 00:17:56,359 --> 00:17:57,760 Speaker 5: But I reckon we can leave it there because I 369 00:17:57,760 --> 00:18:00,360 Speaker 5: feel like, do you get what active investing is and. 370 00:18:00,280 --> 00:18:01,359 Speaker 2: How it works and what that means? 371 00:18:01,600 --> 00:18:03,520 Speaker 4: Yep, I get the gist. But on the other side, 372 00:18:03,520 --> 00:18:05,159 Speaker 4: we're going to talk about passive investing. 373 00:18:05,560 --> 00:18:06,680 Speaker 2: So let's let's do. 374 00:18:06,720 --> 00:18:14,960 Speaker 4: It already, be straight back into it. Let's talk about 375 00:18:15,000 --> 00:18:19,439 Speaker 4: passive investing, the exact opposite of active investing. Tell me 376 00:18:19,480 --> 00:18:19,919 Speaker 4: all about it. 377 00:18:20,000 --> 00:18:23,280 Speaker 2: We can work in seeing. Okay, yeah, there are two kinds. 378 00:18:23,320 --> 00:18:26,080 Speaker 5: You don't have to be one or the other, but 379 00:18:26,240 --> 00:18:28,600 Speaker 5: you will fall into one category. Doesn't mean you can't 380 00:18:28,600 --> 00:18:31,160 Speaker 5: go across the road and have a turn at their path. Sure, 381 00:18:31,200 --> 00:18:33,480 Speaker 5: it's all right, grass is always screener. You can go 382 00:18:33,520 --> 00:18:35,880 Speaker 5: over see how they muld. I like that you can 383 00:18:35,920 --> 00:18:38,440 Speaker 5: go over there whenever you want, but let's get into 384 00:18:38,440 --> 00:18:41,120 Speaker 5: the needy gritty of it. Passive investing tends to suit 385 00:18:41,160 --> 00:18:42,959 Speaker 5: those who would rather take more of a set and 386 00:18:43,000 --> 00:18:46,320 Speaker 5: forget approach in saying that it's not set and forget. 387 00:18:46,440 --> 00:18:48,720 Speaker 5: No type of investment is ever set and forget. You 388 00:18:48,760 --> 00:18:50,399 Speaker 5: don't just get to drop it over there and then 389 00:18:50,400 --> 00:18:53,080 Speaker 5: wait until you're sixty five. So set and forget is 390 00:18:53,160 --> 00:18:57,240 Speaker 5: just a term that is used in the financial services industry. 391 00:18:56,840 --> 00:18:58,480 Speaker 2: Because it's less active. 392 00:18:58,640 --> 00:19:01,720 Speaker 5: Yeah, in general, I'd say that passive investors have a 393 00:19:01,760 --> 00:19:06,040 Speaker 5: lower risk tolerance when compared to active investors, and passive 394 00:19:06,040 --> 00:19:09,600 Speaker 5: investors are often investing for long periods of time, so 395 00:19:09,640 --> 00:19:12,360 Speaker 5: they adopt a buy and hold tactic and they're very 396 00:19:12,600 --> 00:19:14,439 Speaker 5: likely to go, you know what, I'm just trying to 397 00:19:14,440 --> 00:19:17,520 Speaker 5: make use of compound interest over the long term, which 398 00:19:17,560 --> 00:19:20,680 Speaker 5: makes sense. And a lot of people who passively invest 399 00:19:20,720 --> 00:19:23,600 Speaker 5: will pick something like an index, so like a market index, 400 00:19:23,720 --> 00:19:25,760 Speaker 5: or they might pick an ETF that has the top 401 00:19:25,800 --> 00:19:28,639 Speaker 5: two hundred shares in Australia and they go, I'm happy 402 00:19:28,680 --> 00:19:30,680 Speaker 5: with that because I'll get the average returns of those 403 00:19:30,680 --> 00:19:33,199 Speaker 5: two hundred companies and I'm just going to track that 404 00:19:33,320 --> 00:19:37,040 Speaker 5: over time feels a little bit more stable. They tend 405 00:19:37,040 --> 00:19:39,119 Speaker 5: to keep an eye on the price, which is very nice, 406 00:19:39,160 --> 00:19:42,080 Speaker 5: and ignore short term setbacks. So someone who is a 407 00:19:42,080 --> 00:19:46,280 Speaker 5: passive investor wouldn't be too concerned about the market downturn 408 00:19:46,320 --> 00:19:48,919 Speaker 5: we've currently gone through because I'd be like whatever, Like, 409 00:19:49,160 --> 00:19:50,520 Speaker 5: over the long term, this will. 410 00:19:50,400 --> 00:19:53,440 Speaker 2: All work out. But if you're an active investor, you 411 00:19:53,520 --> 00:19:55,320 Speaker 2: might have been like, oh my gosh, like I've got 412 00:19:55,359 --> 00:19:56,280 Speaker 2: to be way. 413 00:19:56,080 --> 00:19:58,840 Speaker 5: More active in my investment portfolio and sell things or 414 00:19:58,840 --> 00:20:01,320 Speaker 5: trade things, or you know, see an opportunity. It can 415 00:20:01,440 --> 00:20:05,359 Speaker 5: actually be quite a frenzied period of time for active investors, 416 00:20:05,480 --> 00:20:08,520 Speaker 5: whereas passive investors are very likely to be like, ah 417 00:20:08,680 --> 00:20:11,959 Speaker 5: gking this you will pass. Yeah, And that's kind of 418 00:20:12,000 --> 00:20:15,280 Speaker 5: the different mentalities they adopt. And you have to adopt 419 00:20:15,400 --> 00:20:19,280 Speaker 5: those different mentalities to actually adhere to your strategy, right, Like, 420 00:20:19,320 --> 00:20:22,160 Speaker 5: if you're a passive investor and you buy into that frenzy, 421 00:20:22,440 --> 00:20:26,359 Speaker 5: you're compromising your strategy. If you're an active investor and 422 00:20:26,359 --> 00:20:29,359 Speaker 5: you're like, yeah, this too shall pass, like your strategy 423 00:20:29,480 --> 00:20:32,040 Speaker 5: is not going to be like you're meant to be 424 00:20:32,119 --> 00:20:34,920 Speaker 5: buying and trading guys, You're shooting yourself in the foot. 425 00:20:35,119 --> 00:20:38,440 Speaker 5: So there's different mentalities that surround these type of investing 426 00:20:38,480 --> 00:20:41,840 Speaker 5: profiles and then kind of a money win. I suppose 427 00:20:42,320 --> 00:20:45,360 Speaker 5: passive investing is a more low cost and low maintenance 428 00:20:45,400 --> 00:20:48,280 Speaker 5: way to invest, which involves way less time analyzing the 429 00:20:48,320 --> 00:20:51,159 Speaker 5: market and costs when it comes to buying and selling. 430 00:20:51,200 --> 00:20:53,520 Speaker 5: Like you're not so concerned about brokerage or sell out 431 00:20:53,520 --> 00:20:56,639 Speaker 5: fees because you're not really doing that all too often. 432 00:20:56,800 --> 00:20:59,280 Speaker 4: Brilliant, Okay, So the low cost and low maintenance were 433 00:20:59,280 --> 00:21:02,560 Speaker 4: definitely be one of the pros of passive investing. What 434 00:21:02,640 --> 00:21:05,240 Speaker 4: else would be the potential positives? 435 00:21:05,480 --> 00:21:08,240 Speaker 5: It involves less time commitment. As we said before, you 436 00:21:08,280 --> 00:21:11,200 Speaker 5: don't have to jump in and become an automatic shared trader. 437 00:21:11,560 --> 00:21:14,440 Speaker 5: It can be a way more affordable way to access 438 00:21:14,480 --> 00:21:17,200 Speaker 5: the market. So, as you guys know, you can jump 439 00:21:17,240 --> 00:21:20,600 Speaker 5: on and buy an ETF and that's a pretty easy 440 00:21:20,800 --> 00:21:23,320 Speaker 5: entry point because you're not paying the fees that come 441 00:21:23,359 --> 00:21:28,640 Speaker 5: alongside active fund managers. Also, passive investors generally have complete 442 00:21:28,680 --> 00:21:32,320 Speaker 5: transparency over their investments. You know exactly where your money 443 00:21:32,400 --> 00:21:34,600 Speaker 5: is and you can remove it and reinvest it as 444 00:21:34,600 --> 00:21:35,240 Speaker 5: you please. 445 00:21:35,520 --> 00:21:37,040 Speaker 2: It's very easy. 446 00:21:37,119 --> 00:21:41,640 Speaker 5: When you are a active investor with that third party 447 00:21:41,680 --> 00:21:45,959 Speaker 5: in mind, sometimes it's a little less transparent. There are 448 00:21:46,080 --> 00:21:48,919 Speaker 5: very transparent active options, please don't get me wrong, but 449 00:21:48,960 --> 00:21:52,480 Speaker 5: there can be a lack of transparency sometimes. And sometimes 450 00:21:52,480 --> 00:21:54,520 Speaker 5: that's just because the fund managers doing what. 451 00:21:54,480 --> 00:21:56,840 Speaker 2: They do best. And that's okay. It's not saying they're 452 00:21:56,840 --> 00:21:57,600 Speaker 2: doing the wrong thing. 453 00:21:57,880 --> 00:21:59,560 Speaker 5: But if you are, I really want to be in 454 00:21:59,560 --> 00:22:01,159 Speaker 5: control of this, and I want to hit a button 455 00:22:01,240 --> 00:22:03,359 Speaker 5: and sell down all my shares if I wanted to, 456 00:22:04,040 --> 00:22:06,119 Speaker 5: active might not be it because it can be a 457 00:22:06,160 --> 00:22:09,119 Speaker 5: little bit more of an arduous task. And then you 458 00:22:09,200 --> 00:22:11,240 Speaker 5: don't have to worry about whether you've chosen the right 459 00:22:11,280 --> 00:22:14,919 Speaker 5: professional fund manager, because most of them don't actually have 460 00:22:15,040 --> 00:22:18,639 Speaker 5: fund managers because they're just the top two hundred stocks 461 00:22:18,680 --> 00:22:21,879 Speaker 5: in the country or the top two hundred tech companies, 462 00:22:22,200 --> 00:22:25,480 Speaker 5: or it might be tracking an index of the average 463 00:22:25,480 --> 00:22:28,840 Speaker 5: of the market, so it's less about human error and 464 00:22:28,920 --> 00:22:30,919 Speaker 5: more about averages and indexes. 465 00:22:31,160 --> 00:22:34,520 Speaker 4: Perfect, okay, tell me the negatives to passive investing. 466 00:22:34,200 --> 00:22:34,520 Speaker 2: All right. 467 00:22:34,600 --> 00:22:38,080 Speaker 5: So there are fewer products available that suit passive investing 468 00:22:38,200 --> 00:22:41,960 Speaker 5: as an approach. Investors are basically limited to index funds 469 00:22:42,080 --> 00:22:45,760 Speaker 5: like an index ETF and an index managed fund, keep 470 00:22:45,800 --> 00:22:48,880 Speaker 5: in mind that just because we're talking about ETFs here 471 00:22:49,000 --> 00:22:52,720 Speaker 5: in passive investment, that doesn't mean they aren't actively managed 472 00:22:52,720 --> 00:22:56,679 Speaker 5: ETFs because there are. Just because you're looking up ETF 473 00:22:56,840 --> 00:23:00,320 Speaker 5: does not mean that it will automatically be passive. You 474 00:23:00,400 --> 00:23:02,879 Speaker 5: need to actually look at that. When I said an 475 00:23:02,880 --> 00:23:06,320 Speaker 5: index ETF, though, that will always be a passive asset 476 00:23:06,640 --> 00:23:09,920 Speaker 5: because indexes track the average of the average. Right, Yeah, 477 00:23:10,040 --> 00:23:13,040 Speaker 5: you will also never beat the market at the end 478 00:23:13,040 --> 00:23:15,600 Speaker 5: of the day. A passive approach means that you ride 479 00:23:15,600 --> 00:23:17,560 Speaker 5: the lows and the highs of the market because you're 480 00:23:17,600 --> 00:23:20,440 Speaker 5: tracking the market. But that also means you're never going 481 00:23:20,480 --> 00:23:24,520 Speaker 5: to overperform it bonus of that though g not a pro, 482 00:23:24,800 --> 00:23:25,400 Speaker 5: it's a con. 483 00:23:25,720 --> 00:23:27,240 Speaker 2: You're never going to underperform the market. 484 00:23:27,320 --> 00:23:27,560 Speaker 1: Either. 485 00:23:27,720 --> 00:23:30,560 Speaker 2: That's good, that's not bad. So that's not bad. 486 00:23:31,320 --> 00:23:34,119 Speaker 5: So V you did say earlier that we can do 487 00:23:34,200 --> 00:23:37,200 Speaker 5: a little bit of both, but again or last star exactly. 488 00:23:37,280 --> 00:23:40,639 Speaker 4: But if you are trying to decide which strategy works 489 00:23:40,680 --> 00:23:42,959 Speaker 4: for you better, what kind of tips would you have? 490 00:23:43,200 --> 00:23:46,239 Speaker 5: Look It really comes down to personal preference and what 491 00:23:46,400 --> 00:23:49,280 Speaker 5: suits you and your investment goals. So as I gave 492 00:23:49,280 --> 00:23:51,719 Speaker 5: you an example before of you might want all right, 493 00:23:51,960 --> 00:23:54,040 Speaker 5: I'm really not willing to take a risk, but I'm 494 00:23:54,080 --> 00:23:57,840 Speaker 5: so interested in this fee. All right, maybe a passive 495 00:23:58,119 --> 00:24:01,119 Speaker 5: core approach makes the most, said Yen's for you. That 496 00:24:01,160 --> 00:24:03,720 Speaker 5: doesn't mean you can't go and download Jazy's and have 497 00:24:03,800 --> 00:24:06,360 Speaker 5: a little play with it on the side. Right, It's 498 00:24:06,400 --> 00:24:09,240 Speaker 5: all about what makes sense to you. We need to 499 00:24:09,240 --> 00:24:13,320 Speaker 5: talk about time frame, so that's going to be really important. Obviously, 500 00:24:13,359 --> 00:24:15,879 Speaker 5: if we have a really long period of time, we 501 00:24:15,960 --> 00:24:18,960 Speaker 5: don't need to take as much risk. If you're investing 502 00:24:19,000 --> 00:24:21,640 Speaker 5: for the next forty years, gee, why would we risk 503 00:24:21,680 --> 00:24:24,120 Speaker 5: it when we have time on outside, Like, let's make 504 00:24:24,160 --> 00:24:28,119 Speaker 5: decisions that make sense for our actual situation, not what 505 00:24:28,240 --> 00:24:30,399 Speaker 5: looks sexiest. Because I know a lot of you are 506 00:24:30,400 --> 00:24:32,720 Speaker 5: going to look at this and go ohm active investing 507 00:24:32,800 --> 00:24:33,680 Speaker 5: is glad sexy. 508 00:24:33,760 --> 00:24:34,280 Speaker 2: I get it. 509 00:24:34,480 --> 00:24:37,879 Speaker 5: That's why I also actively invest, But I have my 510 00:24:37,960 --> 00:24:40,040 Speaker 5: head screwed on and I've picked a strategy that works 511 00:24:40,040 --> 00:24:43,520 Speaker 5: for my personal circumstances. Then consider how old are you, 512 00:24:43,600 --> 00:24:45,800 Speaker 5: how quickly do you need access to these funds, what 513 00:24:45,840 --> 00:24:48,240 Speaker 5: are they actually going to be used for? And how 514 00:24:48,280 --> 00:24:52,120 Speaker 5: confident are you around the markets? What does that actually mean? 515 00:24:52,320 --> 00:24:53,480 Speaker 5: How is that going to work? 516 00:24:53,560 --> 00:24:53,840 Speaker 1: For you. 517 00:24:54,119 --> 00:24:56,000 Speaker 5: But at the end of the day, I would go 518 00:24:56,080 --> 00:24:59,960 Speaker 5: back and listen to our episode on risk profiles. Understand 519 00:25:00,200 --> 00:25:03,520 Speaker 5: that google how to maybe work out your own risk 520 00:25:03,600 --> 00:25:06,919 Speaker 5: profile and write down your goals and what you're trying 521 00:25:06,960 --> 00:25:10,480 Speaker 5: to achieve, and then pick your strategy. And once you've 522 00:25:10,520 --> 00:25:13,480 Speaker 5: picked your strategy, then we can talk about product. The 523 00:25:13,600 --> 00:25:16,080 Speaker 5: number one question I get around investing is what do 524 00:25:16,160 --> 00:25:16,879 Speaker 5: I invest in? 525 00:25:17,240 --> 00:25:17,639 Speaker 2: I don't know. 526 00:25:17,800 --> 00:25:19,520 Speaker 5: There's a whole heap of steps we need to go 527 00:25:19,640 --> 00:25:22,640 Speaker 5: through before we talk about product. And I can't even 528 00:25:22,720 --> 00:25:26,600 Speaker 5: talk about products with you because I can't give you personality. 529 00:25:26,000 --> 00:25:27,159 Speaker 2: Because it's illegal. 530 00:25:27,520 --> 00:25:31,919 Speaker 4: It's illegal, right, Okay, perfect feed. This is one of 531 00:25:31,960 --> 00:25:35,040 Speaker 4: our investing episodes. And if you are someone who's new 532 00:25:35,080 --> 00:25:37,359 Speaker 4: to investing, or you're curious and you want to know more, 533 00:25:37,640 --> 00:25:40,080 Speaker 4: we have been talking about investing for almost three years now. 534 00:25:40,160 --> 00:25:43,200 Speaker 5: We haven't guessed what comes On the twentieth of September. 535 00:25:44,280 --> 00:25:45,960 Speaker 2: I have a whole investing book. 536 00:25:46,000 --> 00:25:49,240 Speaker 5: It is no secret that I'm shamelessly going to plug that. 537 00:25:49,440 --> 00:25:52,040 Speaker 5: But I have been over the last few weeks recording 538 00:25:52,080 --> 00:25:54,439 Speaker 5: the audiobook version of that, and I don't know. 539 00:25:54,520 --> 00:25:55,800 Speaker 2: I've got a few tickets on myself. 540 00:25:56,400 --> 00:25:58,440 Speaker 5: Oh look, I knew it was all right because I 541 00:25:58,440 --> 00:26:01,160 Speaker 5: spent so much time, energy and effort and crying on it. 542 00:26:01,560 --> 00:26:03,280 Speaker 2: I was like, oh, this is pretty good. Like I'm 543 00:26:03,359 --> 00:26:04,400 Speaker 2: very happy with the product. 544 00:26:04,520 --> 00:26:06,199 Speaker 5: Now I'm reading it aloud, I'm like, I think the 545 00:26:06,200 --> 00:26:08,160 Speaker 5: community is gonna be happy with this product. 546 00:26:08,359 --> 00:26:09,960 Speaker 4: I'm excited to listen to it. 547 00:26:11,040 --> 00:26:12,680 Speaker 2: But I think that's all we have time. 548 00:26:12,800 --> 00:26:15,040 Speaker 4: That is all we have time for. But let's wrap 549 00:26:15,160 --> 00:26:19,920 Speaker 4: with the boring but important stuff, George. The advice shared 550 00:26:19,960 --> 00:26:22,080 Speaker 4: on She's on the Money is general in nature and 551 00:26:22,200 --> 00:26:25,720 Speaker 4: just not consider your individual circumstances. She's on the Money 552 00:26:25,880 --> 00:26:29,040 Speaker 4: exists purely for educational purposes and should not be relied 553 00:26:29,119 --> 00:26:32,119 Speaker 4: upon to make an investment or a financial decision. And 554 00:26:32,200 --> 00:26:34,920 Speaker 4: we promise Victoria Divine and she Is on the Money 555 00:26:35,000 --> 00:26:39,960 Speaker 4: are authorized representatives in Focused Securities. Australia Priortary Limited ABN 556 00:26:40,040 --> 00:26:42,520 Speaker 4: four seven zero nine seven seven nine seven zero four 557 00:26:42,640 --> 00:26:45,000 Speaker 4: nine AFSL two three six five two. 558 00:26:45,480 --> 00:26:49,560 Speaker 5: You're a fancy go thank you so much here on Friday, guys, 559 00:26:49,640 --> 00:27:02,040 Speaker 5: you will Bye, guys,