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Speaker 1: Hello.

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Speaker 2: My name is Sanatasha Nabananga Bamblet. I'm a proud your

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Speaker 2: the Order, Kernie Whoalbury and a waddery woman. And before

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Speaker 2: we get started on She's on the Money podcast, I

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Speaker 2: would like to acknowledge the traditional custodians of the land

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Speaker 2: of which this podcast is recorded on a wondery country,

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Speaker 2: acknowledging the elders, the ancestors and the next generation coming

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Speaker 2: through as this podcast is about connecting, empowering, knowledge sharing

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Speaker 2: and the storytelling of you to make a difference for

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Speaker 2: today and lasting impact for tomorrow.

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Speaker 1: Let's get into it.

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Speaker 3: She's on the Money.

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Speaker 1: She's on the Money.

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Speaker 3: Hello, and welcome to She's on the podcast from millennials

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Speaker 3: who want financial freedom Today, we are diving deep into

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Speaker 3: the concept of bear markets, which, to be honest, is

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Speaker 3: a term I only heard for the first time in

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Speaker 3: the news very recently, and if I'm being Frank, I

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Speaker 3: don't really get it.

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Speaker 1: Your name's Georgia, not Frank.

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Speaker 3: A good one and thankfully here to shed a little

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Speaker 3: light and to explain what a bear market is, what

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Speaker 3: it means for us, and how it compares to a

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Speaker 3: bull market. It's Victoria Devine of course VD, welcome back

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Speaker 3: from Europe.

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Speaker 1: Good to have you, Gosh, thank you. I love that.

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Speaker 1: Just before this episode, we're having a chat and you

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Speaker 1: were like, what is a bear market? Like, how does

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Speaker 1: it work? Why is it called a bear market? What

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Speaker 1: does that mean? I'm like, it's legitimately a bear, the

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Speaker 1: animal bear like a bear, and then the bull market

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Speaker 1: is legitimately the bull How many people just didn't know

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Speaker 1: that and they were like, Oh, I must be this

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Speaker 1: complex investing term. It's not. It's real cute.

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Speaker 3: And that's what we're going to break down today. I

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Speaker 3: feel like the most sensible place to start is that

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Speaker 3: the start with the basics. What is a bear market?

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Speaker 1: That is a smart place to start at, George. But

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Speaker 1: before we get there, let's just have a chat about

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Speaker 1: investing markets as a whole. And I think we've seen

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Speaker 1: it in the She's on the Money community a lot recently, right,

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Speaker 1: like last six months, since Christmas, even before Christmas, right,

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Speaker 1: We've seen so many posts in the community. We're talking

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Speaker 1: about the Facebook community here about you know, oh my gosh,

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Speaker 1: my spaceship accounts down, or someone's like, oh my gosh,

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Speaker 1: my rais is down, or I was looking at my

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Speaker 1: portfolio and I'm still behind. And there's just been this

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Speaker 1: consistent piece of conversation around our investments as a whole

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Speaker 1: not doing well. And I think it started with like,

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Speaker 1: oh my gosh, is it spaceship and we're like, no,

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Speaker 1: it's not the platform, it's the market as a whole,

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Speaker 1: and we have been going in this direction down. Bear

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Speaker 1: market spoiler is when the market decreases in value. We'll

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Speaker 1: get to that in a hot second. But if we

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Speaker 1: look at the community and we look at the markets

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Speaker 1: as a whole, I feel like we've all been really

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Speaker 1: concerned about it and we haven't really known what's going on.

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Speaker 1: And obviously there's lots of implications. There's been war and

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Speaker 1: COVID and you know, after the bushfire, has so much

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Speaker 1: happened in Australia but also in the wider world, and

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Speaker 1: it now makes sense to be talking about it. Not

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Speaker 1: that we haven't been this entire time, but we're currently

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Speaker 1: or now officially in what is known as bear market George.

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Speaker 1: A bear market, to define it really quickly, is when

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Speaker 1: the market falls by twenty percent or more from its

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Speaker 1: fifty two week high. So many people say that it

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Speaker 1: is typically a sign of negative investor sentiment, which kind

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Speaker 1: of makes sense, like we're all feeling a little bit apprehensive,

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Speaker 1: we're more likely to, you know, stockpile some cash under

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Speaker 1: the mattress because of the tumultuous times that might be ahead,

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Speaker 1: especially after what we've been through. But essentially, a bear

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Speaker 1: market is where people are selling shares, getting rid of things,

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Speaker 1: stocking away their cash in their mattress, and hibernating for

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Speaker 1: the winter, which is where I mean, there's a lot

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Speaker 1: of hearsay around where bear came from, but we're going

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Speaker 1: to define it as we're hibernating. So a bear hibernates cute, right, sure.

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Speaker 1: The opposite bull market. You're not following yet, are you? No?

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Speaker 3: No, I'm picking up little bits.

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Speaker 1: The opposite is a bull market, and a bull as

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Speaker 1: an animal really aggressive, like you see them with the flags.

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Speaker 1: They'll go ya. But that is where the value of

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Speaker 1: the market has risen by a minimum of twenty percent

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Speaker 1: from the previous fifty two week high. So a bull

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Speaker 1: is buying shares and like charging at the market, and

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Speaker 1: a bear is kind of like stockpiling their acorns. Bears

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Speaker 1: eat acorns, no, but they do hibernate for the winter,

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Speaker 1: So lave it there? Does that make sense? Are you

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Speaker 1: following me? Now?

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Speaker 3: I feel like bear. It's also like kind of a

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Speaker 3: double meaning, like bear market means like people, there's barely

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Speaker 3: anyone there. It's a bear people are treating it's fair.

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Speaker 3: It works, you know, I'm not always silly.

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Speaker 1: What's the sentient on ball? Don't need one, don't mean.

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Speaker 3: One, don't know that's it? You said a fish there before,

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Speaker 3: Victoria Devine. So has this happened very recently, because I

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Speaker 3: have heard it has, but I haven't.

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Speaker 1: Been happy in June at my love. So as of

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Speaker 1: mid June, we officially made it into a bear market,

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Speaker 1: which means that the market has now officially fallen by

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Speaker 1: twenty percent, which sounds really scary and it absolutely shouldn't be.

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Speaker 1: At the same time as like, it is a good

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Speaker 1: time to review your investment strategy. It is a good

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Speaker 1: time to think about money, but it's also a good

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Speaker 1: time to And this is a quote that I have

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Speaker 1: seen all over the internet recently, purely because obviously the

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Speaker 1: markets have gone down. But when in doubt, zoom out,

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Speaker 1: so like when you're in doubt, obviously it feels really scary,

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Speaker 1: but we have been through so many market changes over time.

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Speaker 1: Like if we now look at a chart that shows us,

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Speaker 1: you know, investment performance over time, those blips that we

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Speaker 1: see on a market chart look really small now, but

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Speaker 1: then you look and go, wow, hold on, zoom in.

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Speaker 1: That's the GFC in two thousand and eight, two thousand

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Speaker 1: and nine that now look like a very small bump.

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Speaker 1: It went down and then it's obviously recovered and gone back.

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Speaker 1: We're at one of those blips again. So it's going

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Speaker 1: to feel really dramatic because twenty percent nobody Like if

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Speaker 1: I said to you, ge, do you want to invest?

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Speaker 1: You go yeah, V then you lost twenty percent. You're

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Speaker 1: gonna be happy with me.

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Speaker 3: I'm want to be loving that. No, it's going to

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Speaker 3: be loving it.

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Speaker 1: But if I took you back to two thousand and

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Speaker 1: nine and was able to show you what the future

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Speaker 1: looked like and that the market would recover and it

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Speaker 1: will be okay, and you're actually well above and beyond

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Speaker 1: what you were before, you'd be like, no, I want

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Speaker 1: to hold on. But in the moment, it is really scary.

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Speaker 1: And that's why on Sheese on the Money, we talk

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Speaker 1: so significantly about behavior all investing people, often, especially in

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Speaker 1: a bear market, they go, oh my gosh, everybody else

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Speaker 1: is selling. The market's going down. I want to save

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Speaker 1: my money, like I don't want to lose any more.

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Speaker 1: So they often crystallize their losses and pull their money

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Speaker 1: out and they're like, no, no, no, I don't want to

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Speaker 1: lose more, when in reality that can actually harm you

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Speaker 1: because you're pulling money out while it's worthless instead of

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Speaker 1: just riding the wave and going no, I know that

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Speaker 1: this is how it works. We're going to ride that

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Speaker 1: wave and it will rebound at some point in the future.

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Speaker 3: So what's happening right now? Why are we in a

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Speaker 3: bear market situation?

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Speaker 1: Oh, because bears are real cute and everyone's like, it's true,

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Speaker 1: let's switch. Well, not as cute as a bear, but no,

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Speaker 1: we're in a bear market right now, which is actually

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Speaker 1: called a correction. So the market's correcting our itself. It

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Speaker 1: was flying and going up, and remember there was just

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Speaker 1: like so many people, maybe like just pre COVID talking

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Speaker 1: about investing and being like, oh my god, investing, I'm

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Speaker 1: making so much money. Like everyone's gloating on shees on

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Speaker 1: the money, how much they're making their spaceship and their

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Speaker 1: raise accounts, and stuff. Remember that, and then they were

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Speaker 1: complaining about it because they're like, is it spaceship and

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Speaker 1: we need to remember that it's actually market driven, not

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Speaker 1: platform driven. If the underlying assets that your platform own

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Speaker 1: are you know, really reflective of the market. But essentially,

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Speaker 1: right now we're going through a market correction which has

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Speaker 1: been going on for a while now, and it's actually

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Speaker 1: due to one inflation, which we're hearing a lot about

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Speaker 1: at the moment. It's due to the ongoing impacts of

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Speaker 1: Russia's invasion into Ukraine, which is still terrifying, still baffles

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Speaker 1: me in twenty twenty two that that is what's going

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Speaker 1: on and the implications of that on global trade. So

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Speaker 1: obviously those things are really significant, but that is from

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Speaker 1: what all the economists are saying, is what is driving

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Speaker 1: current downturn in the market. And when you say that,

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Speaker 1: ve is this an Australian situation or is it GLO

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Speaker 1: global situation? It is global situation. So it's not something

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Speaker 1: where it's like, oh my god, it'sh Australian shares. No,

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Speaker 1: this is across the board. So a couple of weeks ago,

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Speaker 1: the inflation numbers out of the US came through and

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Speaker 1: everyone was really scared, but they were higher than expected,

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Speaker 1: and we know this because we've been talking about it

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Speaker 1: in the community. But essentially it hit a four decade

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Speaker 1: high in the US in Australia of eight point six percent,

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Speaker 1: So inflation in the US is now at a level

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Speaker 1: that has not been seen since December nineteen eighty one.

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Speaker 1: So it makes sense that we're a bit like, what

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Speaker 1: is going on? This is really scary. So we've seen

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Speaker 1: a lot and here in Australia, the Reserve Bank actually

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Speaker 1: early June, I believe it was like the seventh of June,

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Speaker 1: an announcement came out that the Reserve Bank had the

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Speaker 1: single biggest rise in the cash rate in twenty two years,

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Speaker 1: which is again scary. And Australia's Central Bank tried to

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Speaker 1: quash inflation before it got out of control, and the

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Speaker 1: RBA board, they have a regular monthly meeting, they lifted

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Speaker 1: the cash rate fifty basis points, so it went up

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Speaker 1: to zero point eight five And if you follow us

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Speaker 1: on Instagram, we posted about that and that was much

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Speaker 1: higher than what everybody expected. But essentially that happened because

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Speaker 1: we wanted to quash inflation, like it's not going to

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Speaker 1: stop it, but it's just stopping it impacting you as significantly.

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Speaker 1: And then closely following that, we got the announcement that

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Speaker 1: Albow had increased the minimum wage, which is obviously a

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Speaker 1: really good thing, but I do think that was really

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Speaker 1: driven by the fact that inflation is so significant right now.

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Speaker 1: If you're a She's on the Money regular, Hi, thanks

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Speaker 1: for listening. But also you've heard Jess and I and

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Speaker 1: George talk for weeks on the Friday Drinks episodes about

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Speaker 1: like fuel prices and how expensive things are, Like this

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Speaker 1: is impacting not just investors but everyday people who are

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Speaker 1: just trying to get to work and put food on

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Speaker 1: the table. So I think it's important to look at

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Speaker 1: what a bear market means, whether you're an investor or not.

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Speaker 1: It's not just like, oh, if you're a serious investor,

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Speaker 1: the bear market's really important to understand, No, it's not.

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Speaker 1: It's important to understand if you're an individual who uses money,

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Speaker 1: full stop, end of story, because inflation in the US

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Speaker 1: has you know, obviously been wild and not been seen

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Speaker 1: that high since December nineteen eighty one, Like that's crazy

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Speaker 1: to think that we're back there, and that's obviously then

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Speaker 1: sent the stock market further into a bit of a

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Speaker 1: bit of a panic. You're a bit worried. So I

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Speaker 1: think it's really important to understand that our governments are

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Speaker 1: doing a lot to try and curb this and put

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Speaker 1: us in a position where it doesn't impact the everyday

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Speaker 1: person as much. But if you're an investor, you're going

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Speaker 1: to feel this pretty significantly in your share portfolio. And

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Speaker 1: as an investor myself, it is not that fun logging

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Speaker 1: into my share portfolio. As you guys know, I'm a

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Speaker 1: pretty aggressive investor. It's down pretty significantly. I don't like

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Speaker 1: seeing that. Just because I run cheese on the money

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Speaker 1: doesn't mean I'm immune to feeling sick when I look

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Speaker 1: at my investment. But like I can't tell you you

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Speaker 1: never get over that. But what you do do is

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Speaker 1: you educate yourself and you're like, no, Victoria, you can't

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Speaker 1: sell your asset. Stop doing that, Stop thinking like that,

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Speaker 1: and go back to the advice you give everybody else. Yeah,

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Speaker 1: still easier to give advice than he needs to take it.

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Speaker 3: George, Well, that's the thing. It sounds to be, frank

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Speaker 3: quite scary. My mind is going, well, bear market, stressful times, recession,

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Speaker 3: that's like the line that I'm drawing, is that fair? Like?

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Speaker 3: Are we heading down that? Or is it not as

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Speaker 3: dark as that?

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Speaker 1: No, it is absolutely as dark as that. I absolutely

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Speaker 1: go to see a recession coming, and it's because the

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Speaker 1: market's in a way gotten away from us and it

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Speaker 1: needs to readjust. It does mean that we need to

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Speaker 1: be quite careful with our spending. I don't want to

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Speaker 1: scare people. We actually need to. I guess talk about

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Speaker 1: here market corrections and what that means, and a lot

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Speaker 1: of economists are predicting it, and we will probably do

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Speaker 1: an entire podcast on a recession and what that means

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Speaker 1: and how that works. But we are young, George, and

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Speaker 1: we're in that very privileged position where you know, if

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Speaker 1: you look at the risk return chart we have on

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Speaker 1: our side time and I've spoken to people in our

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Speaker 1: community who are sixteen and listening to the podcast. I've

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Speaker 1: spoken to people who are sixty six and listening to

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Speaker 1: the podcast, and we're all in different circumstances. To me,

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Speaker 1: if you are, you know, a millennial and you're an investor,

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Speaker 1: it is not anything that you need to jump up

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Speaker 1: and down about and really worry about unless you have

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Speaker 1: a very volatile employment situation, in which case I would

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Speaker 1: always recommend an emergency fund regardless of who you are

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Speaker 1: or what you do. But from my perspective, these types

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Speaker 1: of things really impact you if you're close to retirement,

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Speaker 1: where you know, a significant downturn in your investment portfolio

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Speaker 1: or your superannuation is going to mean that you're not

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Speaker 1: retiring within the timeframe that you want to. It could

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Speaker 1: also mean that, you know, George, let's say you own

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Speaker 1: a home and you're like, oh, v I wanted to

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Speaker 1: own the home for five years, but then a recession

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Speaker 1: hits and it's not worth as much as you wanted

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Speaker 1: it to be worth. So therefore your time frames on

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Speaker 1: your goals have changed, because we actually should push that

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Speaker 1: goal out because I don't want you losing money by

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Speaker 1: selling that property today and not getting what you needed

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Speaker 1: from it, if that makes sense. So a lot of

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Speaker 1: privilege plays into this as well, because during a recession,

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Speaker 1: a lot of people are forced to do a lot

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Speaker 1: of things that they wouldn't want to do, especially when

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Speaker 1: it comes to money, which is why I think it

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Speaker 1: is so important to go back to that emergency fund

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Speaker 1: piece and talk about what that means. But essentially all

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Speaker 1: of that in mind, and the fact that you know

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Speaker 1: inflation is so prevalent and such a big key point,

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Speaker 1: markets are now taking that into consideration. Hence the fall

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Speaker 1: like that has been very well timed, the fall in

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Speaker 1: the market with when inflation was announced in Australia internationally, Like,

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Speaker 1: that's what is driving that this time. And as much

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Speaker 1: as the economic news isn't great and it all sounds

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Speaker 1: really negative, let's flip this. Shares are on sale. Baby.

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Speaker 3: That's a good point. That's a nice spin that.

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Speaker 1: I love that. But prices falling means that we are

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Speaker 1: looking at having more attractive investment options if you're in

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Speaker 1: a position to invest, Like as an investor right now,

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Speaker 1: I'm looking at the market going like okay, cool, Like

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Speaker 1: what are some things I might want to pick up

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Speaker 1: that are discounted that are going to be really solid

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Speaker 1: players in my investment portfolio for the long term. Like

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Speaker 1: it's really exciting. Like when you're out shopping and you

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Speaker 1: see twenty percent off, you get excited. But when we

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Speaker 1: see it in the share market, we we nearly wet

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Speaker 1: our pair. It's Georgia King.

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Speaker 3: And we usually say, don't get sucked into sales.

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Speaker 1: But on this occasion, not about all shy if you can,

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Speaker 1: but also be really smart and have an emergency fund,

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Speaker 1: because we all want to be safe. But it's important

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Speaker 1: to understand that this is not just one platform that's

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Speaker 1: going to be impacted. It's not just your Spaceship account

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Speaker 1: or your Raise account, like everybody across the market is

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Speaker 1: going to be impacted. I'm a direct investor, I'm impacted.

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Speaker 1: It's not something that you know people are going to

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Speaker 1: be immune from. But I think we need to go

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Speaker 1: back to behavioral investing and understand that the behavioral investing

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Speaker 1: chart has ebbs and flows, and Warren Buffett said it

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Speaker 1: best be greedy when people are fearful, and be fearful

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Speaker 1: when people are greedy. And that goes back to if

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Speaker 1: the market's really high and people are really excited. Remember

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Speaker 1: Bitcoin when everyone was like super stoked on it, and

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Speaker 1: every man and his dog was buying a bitcoin. Not

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Speaker 1: that you can buy a single bitcoin because that is

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Speaker 1: now worthwait much, but they were buying parts of bitcoin

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Speaker 1: and then it crashed and then everybody was really worried.

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Speaker 1: Like that's the emotional rollercoaster that is investment, that is

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Speaker 1: the investing journey. And I think We need to just

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Speaker 1: be super aware of what that means and how that works,

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Speaker 1: because we can get carried away and we can crystallize losses.

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Speaker 1: Like how many people in the She's on the Money

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Speaker 1: community have we seen George message us going, oh my god,

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Speaker 1: my spaceship portfolio was down, so I just sold all

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Speaker 1: my shares or I got rid of it. And I'm like,

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Speaker 1: oh my gosh. Like I feel mean saying this, But

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Speaker 1: have I taught you, sir? Like I feel like a

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Speaker 1: mum at the dinner table, Like I remember way back when, right,

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Speaker 1: I was like at the dinner table with my dad,

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Speaker 1: have no idea what I was talking about, but I

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Speaker 1: was like, Dad, there's this great thing I did XYZN.

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Speaker 1: He just looked at me and he's like, are you joking?

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Speaker 1: And I was like, Dad, I'm really excited, Like why

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Speaker 1: aren't you sharing my excitement for this? Obviously very independent

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Speaker 1: in discovery, he is, I have been telling you that

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Speaker 1: for months.

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Speaker 3: Hang on, are you talking about investing?

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Speaker 1: No, it's interesting in general, no idea, but like I

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Speaker 1: thought i'd discovered it for the first time. I was

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Speaker 1: not listening to my dad. I feel like that's my

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Speaker 1: community today.

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Speaker 3: Sure, I guess what I kind of wanted to bring

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Speaker 3: up is that she's in the money. He's been alive

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Speaker 3: for three years. It was our third birthday last week.

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Speaker 1: Whild how cute do we?

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Speaker 3: And for a lot of us, this is our really

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Speaker 3: our first test into a real market downturn, and this

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Speaker 3: is kind of our challenge to take it upon ourselves

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Speaker 3: to be like, what have we learned over the past

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Speaker 3: three years? We hold on is that the message that

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Speaker 3: you would say to the girl.

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Speaker 1: Is absolutely and I think it's really important to remember

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Speaker 1: that it's actually about education, and the more educated you are,

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Speaker 1: the more comfortable you're going to be going through this.

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Speaker 1: And you know, not to call anybody out individually, but

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Speaker 1: if you have sold your shares because you've been really

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Speaker 1: concerned about the falling prices, I think now's the time

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Speaker 1: to go why did you make that decision, because usually

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Speaker 1: that decision has been made out of fear, and fear

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Speaker 1: comes from a lack of education. The more educated you

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Speaker 1: are about something, the less fearful you are of it,

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Speaker 1: because you're like, well, I know what that is. It

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Speaker 1: doesn't matter what it is or how it works. Like

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Speaker 1: people who are super educated on ghosts. George not scared

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Speaker 1: of them me terrified.

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Speaker 3: I love this, but it.

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Speaker 1: Makes sense, right, Like the more you know about a

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Speaker 1: particular topic. Our producer is laughing at us. I don't

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Speaker 1: know if I can carry on. But the more you

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Speaker 1: know about a certain topic, the more comfortable you are

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Speaker 1: with it when confronted with it.

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Speaker 3: Yeah, that's true.

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Speaker 1: So I think it's really important to go if I'm

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Speaker 1: scared about making this decision anywhere in life, Let's be honest.

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Speaker 1: Maybe I just need a bit more education. Maybe I

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Speaker 1: need to read a blog. Maybe I need to read

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Speaker 1: a book, maybe I need to listen to the Shees

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Speaker 1: on the Money podcast. Like, it's not a bad thing.

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Speaker 1: I think we just need to talk about it and

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Speaker 1: what it actually means. And a bear market is not

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Speaker 1: something to be scared of. It just means that the

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Speaker 1: US stock price declined. It declined twenty two percent from January.

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Speaker 1: It peaked in January, and share prices have been bouncing

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Speaker 1: around for the last twelve months. And now we're seeing

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Speaker 1: a term being put on that. But we all kind

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Speaker 1: of saw this coming. We've been having this conversation. We've

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Speaker 1: seen it. I've said before on the podcast, Well, I

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Speaker 1: feel like there might be a recession coming, like this

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Speaker 1: makes sense, and then economists are saying the same thing now,

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Speaker 1: and I'm like, yeah, this makes sense. I'm an educated investor, though,

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Speaker 1: and I want to be able to empower the rest

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Speaker 1: of the community with that education so that they have

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Speaker 1: that confidence to feel like, okay, cool, Like, let's reframe this.

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Speaker 1: Let's see this as an opportunity because I'm young, and

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Speaker 1: I can create wealth and I can do this, and

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Speaker 1: I can do that instead of going, oh my gosh,

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Speaker 1: everyone's talking about it being a terrible market, so your

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Speaker 1: shares are on sale.

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Speaker 3: Yeah, yeah, listen to your sisters at Cheese on the money,

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Speaker 3: take it seriously, but zap out the emotion. Yeah, what

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Speaker 3: I mean?

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Speaker 1: Right, let's go to it. Right, let's do it. Let's

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Speaker 1: more bear market and bullmarket when we gave back fabulous.

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Speaker 3: Alrighty, guys, welcome back. Great to have you.

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Speaker 1: If you're still with us, do you reckon they're still

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Speaker 1: with us? We are about such dry content. No, it's dry,

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Speaker 1: but I think the way that you've explained it.

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Speaker 3: Is genuinely so interesting and engaging and as I.

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Speaker 1: Said, really cute. So why would you go anywhere?

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Speaker 3: Well, they are, but as I said, at the top

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Speaker 3: of the episode, like, I've heard this term, but I

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Speaker 3: haven't understood it. It's kind of hard to grasp when

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Speaker 3: you're reading it on a page. So it's really good

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Speaker 3: to have you explain it. So thank you so much.

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Speaker 3: The you mentioned earlier the term market correction, I did,

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Speaker 3: how does that differ from a bear market? What does

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Speaker 3: it mean?

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Speaker 1: I feel like I accidentally used those a little bit interchangeably,

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Speaker 1: and they're actually two different things. So corrections in bear

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Speaker 1: markets are both defined not defined, but they're both associated

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Speaker 1: with you could say, falling share markets, so falling prices

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Speaker 1: of shares. The difference between the two is, I guess

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Speaker 1: how big that fall is. So a correction or a

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Speaker 1: market correction is typically defined as a share market fall

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Speaker 1: of about ten percent, okay, so half of a bear market.

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Speaker 1: And as we said before, a bear market is when

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Speaker 1: we have a minimum of a twenty percent drop. And

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Speaker 1: so in the month of June twenty twenty two, we

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Speaker 1: saw the US stock price, so the SMP five hundred index,

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Speaker 1: which you can ask me in a hot second to

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Speaker 1: what that is entered officially bear market territory when we

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Speaker 1: had a twenty two percent decline from its peak in January,

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Speaker 1: so officially we're there, but a market correction is about

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00:21:35,960 --> 00:21:38,360
Speaker 1: ten percent, and then a bear market's twenty.

433
00:21:38,240 --> 00:21:40,600
Speaker 3: Okay, so it's yeah, bear market's worse.

434
00:21:40,680 --> 00:21:41,439
Speaker 1: That's good to know.

435
00:21:41,600 --> 00:21:45,520
Speaker 3: Here we are what you said just before SMP markets.

436
00:21:45,800 --> 00:21:49,560
Speaker 1: Oh, the SMP five hundred, which you've probably seen before

437
00:21:50,000 --> 00:21:52,600
Speaker 1: usually like in the really tiny text at the bottom

438
00:21:52,680 --> 00:21:55,440
Speaker 1: of the TV when you're watching the news at night,

439
00:21:55,800 --> 00:21:57,520
Speaker 1: and you would hear people being like in the SMP

440
00:21:57,640 --> 00:21:59,800
Speaker 1: index is up by it or it's down by You've

441
00:21:59,800 --> 00:22:02,640
Speaker 1: heard this before, right, Like that feels familiar. So the

442
00:22:02,680 --> 00:22:05,720
Speaker 1: SMP is actually called the Standard and Pause five hundred,

443
00:22:05,840 --> 00:22:09,159
Speaker 1: or simply put the SMP five hundred, and it is

444
00:22:09,200 --> 00:22:12,680
Speaker 1: a stock market index tracking the stock performance of five

445
00:22:12,880 --> 00:22:16,560
Speaker 1: hundred large companies that are listed on the US Exchange

446
00:22:16,560 --> 00:22:18,840
Speaker 1: in the United States, and it is one of the

447
00:22:18,920 --> 00:22:22,000
Speaker 1: most commonly followed indices, so it is one of the

448
00:22:22,040 --> 00:22:25,040
Speaker 1: most commonly used I guess measures of what's going on

449
00:22:25,119 --> 00:22:27,280
Speaker 1: in the market. So if you ever hear sm P

450
00:22:27,440 --> 00:22:30,679
Speaker 1: five hundred, it's actually not that complex. It's just the

451
00:22:30,760 --> 00:22:33,959
Speaker 1: five hundred top companies that are used for us to

452
00:22:34,000 --> 00:22:35,919
Speaker 1: measure what's going on in the market.

453
00:22:36,240 --> 00:22:38,880
Speaker 3: Okay, makes sense, all right, sure for sure.

454
00:22:39,119 --> 00:22:41,960
Speaker 1: And as of today, George, if you google SMP five hundred,

455
00:22:42,000 --> 00:22:44,199
Speaker 1: I won't tell you what today's date is, but you

456
00:22:44,240 --> 00:22:47,000
Speaker 1: can work out what date we recorded by this number,

457
00:22:47,359 --> 00:22:49,760
Speaker 1: we are down eleven point six three percent, which is

458
00:22:49,800 --> 00:22:50,920
Speaker 1: point three percent today.

459
00:22:51,000 --> 00:22:56,719
Speaker 3: G So back to recession chats, love recession chats. The

460
00:22:56,760 --> 00:22:58,800
Speaker 3: word recession is terrifying.

461
00:22:58,480 --> 00:23:00,320
Speaker 1: It is, right, Why why do you feel feel like

462
00:23:00,320 --> 00:23:03,120
Speaker 1: that's terrifying? What are your attachments to that one?

463
00:23:03,200 --> 00:23:07,560
Speaker 3: So my mind goes to the global financial crisis over

464
00:23:07,600 --> 00:23:10,560
Speaker 3: in the US and visions of that for me, like

465
00:23:10,600 --> 00:23:13,440
Speaker 3: people losing their jobs, everyone's selling up, just a really

466
00:23:13,480 --> 00:23:14,800
Speaker 3: scary time.

467
00:23:14,760 --> 00:23:17,320
Speaker 1: Like great depression kind of vibes because that was also

468
00:23:17,600 --> 00:23:18,640
Speaker 1: a recession and.

469
00:23:18,560 --> 00:23:20,520
Speaker 3: People like losing their homes and all of these really

470
00:23:20,560 --> 00:23:23,879
Speaker 3: really serious things. And you just said before that like

471
00:23:23,920 --> 00:23:27,720
Speaker 3: a recession is coming, So how can we not be

472
00:23:27,840 --> 00:23:30,320
Speaker 3: afraid of that? Like is it as scary as that

473
00:23:30,359 --> 00:23:32,000
Speaker 3: picture I have in my head? Or is it not

474
00:23:32,040 --> 00:23:32,960
Speaker 3: going to be that bad?

475
00:23:33,200 --> 00:23:36,959
Speaker 1: Look a recession? Honestly, it is really scary and it

476
00:23:37,000 --> 00:23:40,000
Speaker 1: can be really scary, and like, let's define it. But essentially,

477
00:23:40,000 --> 00:23:43,280
Speaker 1: a recession is a significant decline in economic activity that

478
00:23:43,359 --> 00:23:46,520
Speaker 1: lasts for months or even years. Obviously, the Great Depression

479
00:23:46,680 --> 00:23:49,960
Speaker 1: is a really good example of that. That was so significant.

480
00:23:50,000 --> 00:23:52,120
Speaker 1: I mean at the time, it wasn't called the Great Depression.

481
00:23:52,160 --> 00:23:54,520
Speaker 1: They named it after that happened, because you don't know

482
00:23:54,520 --> 00:23:56,479
Speaker 1: what you're in for with a recession, you don't know

483
00:23:56,760 --> 00:23:59,640
Speaker 1: how long it's going to play out for. Then the GFC,

484
00:23:59,680 --> 00:24:02,080
Speaker 1: which is the Global financial crisis, which we should do

485
00:24:02,080 --> 00:24:05,800
Speaker 1: an entire episode on I reckon. That would be from

486
00:24:05,800 --> 00:24:08,879
Speaker 1: a financial advisers perspective, Maybe we should go out to

487
00:24:08,920 --> 00:24:10,840
Speaker 1: the community and they even ask so they want this,

488
00:24:10,960 --> 00:24:14,399
Speaker 1: but like, what is the global financial crisis? Why are

489
00:24:14,400 --> 00:24:16,439
Speaker 1: people still talking about it? When it happened in two

490
00:24:16,440 --> 00:24:18,840
Speaker 1: thousand and eight, two thousand and nine, What started it?

491
00:24:18,880 --> 00:24:21,919
Speaker 1: How did that work? But essentially, experts they declare a

492
00:24:21,960 --> 00:24:27,280
Speaker 1: recession when a nation's economy experiences negative gross domestic product GDP.

493
00:24:27,520 --> 00:24:30,800
Speaker 1: GD probably heard of that before, rising levels of unemployment,

494
00:24:31,160 --> 00:24:35,119
Speaker 1: falling retail sales, so people are shopping less and contracting

495
00:24:35,160 --> 00:24:38,280
Speaker 1: measures of income and manufacturing for an extended period of time,

496
00:24:38,520 --> 00:24:41,320
Speaker 1: which we I feel like we're starting to feel right

497
00:24:41,400 --> 00:24:46,760
Speaker 1: in the conversations we're having so lettus lettus, which is

498
00:24:46,880 --> 00:24:51,960
Speaker 1: twelve dollars lettuce, twelve dollar letters, petrol, petrol. All of

499
00:24:52,000 --> 00:24:54,600
Speaker 1: those things are indicators.

500
00:24:54,240 --> 00:24:54,880
Speaker 3: All of them.

501
00:24:55,440 --> 00:24:59,560
Speaker 1: All the lettuces and all of the petrols are indicators.

502
00:24:59,760 --> 00:25:03,199
Speaker 1: But they're genuine indicators of recession because we are in

503
00:25:03,240 --> 00:25:07,159
Speaker 1: a situation where our product and our ability to supply

504
00:25:07,320 --> 00:25:10,399
Speaker 1: product to the masses is not able to keep up

505
00:25:10,440 --> 00:25:15,000
Speaker 1: with demand, and so things become astronomically expensive and they

506
00:25:15,080 --> 00:25:18,800
Speaker 1: become really limited resources. And watching this happening is an

507
00:25:18,840 --> 00:25:22,719
Speaker 1: indicator of recession. But you can also see how it

508
00:25:22,840 --> 00:25:27,639
Speaker 1: might start to happen when there's global war and looking

509
00:25:27,680 --> 00:25:31,120
Speaker 1: at what's going on in Russia invading Ukraine and how

510
00:25:31,160 --> 00:25:36,399
Speaker 1: that's impacted the ability of product to flow around the world,

511
00:25:36,760 --> 00:25:39,400
Speaker 1: and you see it in our industry right. Like, I'm

512
00:25:39,400 --> 00:25:41,280
Speaker 1: probably a little bit more privy to this at the

513
00:25:41,280 --> 00:25:43,480
Speaker 1: moment because as a lot of you know, I'm trying

514
00:25:43,520 --> 00:25:46,760
Speaker 1: to renovate my house and it is so expensive. I'm

515
00:25:46,760 --> 00:25:48,520
Speaker 1: talking to my build out and they're like, look, they

516
00:25:48,880 --> 00:25:50,840
Speaker 1: we're going to be up for a minimum of thirty

517
00:25:50,920 --> 00:25:54,840
Speaker 1: percent more because that's how much more product is worth now.

518
00:25:55,160 --> 00:25:58,600
Speaker 1: So like timber, not that everybody else knows what this is.

519
00:25:58,600 --> 00:26:02,040
Speaker 1: But timber prices have increased by a minimum of thirty percent.

520
00:26:02,320 --> 00:26:04,199
Speaker 1: So now for me to build a wall, it is

521
00:26:04,240 --> 00:26:07,400
Speaker 1: going to be thirty percent more. That is putting significant

522
00:26:07,440 --> 00:26:11,679
Speaker 1: pressure one on my budget, but on everybody else's budget. Like,

523
00:26:12,480 --> 00:26:15,000
Speaker 1: think about the building industry and how many contracts have

524
00:26:15,040 --> 00:26:17,920
Speaker 1: been signed to you know, build your metricron home that's

525
00:26:17,960 --> 00:26:20,440
Speaker 1: now costing them more. And there are these contracts where

526
00:26:20,440 --> 00:26:24,240
Speaker 1: they're like, great, I signed this contract. It's now going

527
00:26:24,280 --> 00:26:27,560
Speaker 1: to cost that business far more. That's going to significantly

528
00:26:27,640 --> 00:26:30,919
Speaker 1: impact that business negatively. So it's kind of like a

529
00:26:30,960 --> 00:26:33,160
Speaker 1: snowball and you pick up small things along the way,

530
00:26:33,200 --> 00:26:35,359
Speaker 1: and small things become big things, and that big thing

531
00:26:35,400 --> 00:26:36,600
Speaker 1: happens to be the recession.

532
00:26:36,680 --> 00:26:39,320
Speaker 3: So it sounds like it's basically a perfect storm.

533
00:26:39,400 --> 00:26:39,520
Speaker 2: Right.

534
00:26:39,560 --> 00:26:42,320
Speaker 3: We've had the bushfires to kick us off, then we

535
00:26:42,400 --> 00:26:45,119
Speaker 3: had two years of lockdowns, a pandemic that ended so

536
00:26:45,160 --> 00:26:48,200
Speaker 3: many lives and impacted so many lives around the world. Yep,

537
00:26:48,560 --> 00:26:51,520
Speaker 3: and now we have a war happening in Ukraine.

538
00:26:51,920 --> 00:26:56,360
Speaker 1: It's insane. Yeah, the world is insane. But essentially, and unfortunately,

539
00:26:56,440 --> 00:27:00,760
Speaker 1: recessions are considered a very unavoidable part of business. And

540
00:27:01,000 --> 00:27:04,520
Speaker 1: of the business cycle. As we mentioned before, we have

541
00:27:04,680 --> 00:27:08,080
Speaker 1: been through recessions before. We will come out the other side.

542
00:27:08,320 --> 00:27:10,480
Speaker 1: But yeah, there are some negative things that are going

543
00:27:10,560 --> 00:27:12,760
Speaker 1: to come out of it, and people are going to

544
00:27:12,800 --> 00:27:15,240
Speaker 1: suffer through this because not everyone is going to get

545
00:27:15,240 --> 00:27:18,719
Speaker 1: away with it's got free. But essentially it's kind of

546
00:27:18,760 --> 00:27:21,919
Speaker 1: like the expansion and contraction of the market and working

547
00:27:21,960 --> 00:27:24,800
Speaker 1: out like if you grow too fast, your bubble's probably

548
00:27:24,840 --> 00:27:27,360
Speaker 1: going to pop, and that's kind of what's happening here.

549
00:27:28,240 --> 00:27:33,520
Speaker 3: Well, just on a light note, like light when we

550
00:27:33,600 --> 00:27:35,480
Speaker 3: come out the other side, is it going to be

551
00:27:35,480 --> 00:27:40,719
Speaker 3: like the Flapper era popping on our dresses? It's going

552
00:27:40,800 --> 00:27:43,359
Speaker 3: to be great, said my mind's gone. It's going to

553
00:27:43,440 --> 00:27:44,080
Speaker 3: be good eventually.

554
00:27:44,240 --> 00:27:48,440
Speaker 1: Yes and no, Yes and no, shut me out. Sorry, sorry,

555
00:27:48,520 --> 00:27:51,080
Speaker 1: Georgia King. I don't think we are going to be

556
00:27:51,119 --> 00:27:52,800
Speaker 1: going into the flapper era again.

557
00:27:52,840 --> 00:27:53,520
Speaker 3: I'm going back.

558
00:27:53,640 --> 00:27:57,040
Speaker 1: Okay, Well I can go to the party. Actually, I've

559
00:27:57,080 --> 00:27:59,320
Speaker 1: recently moved into a rental property, as you guys know,

560
00:27:59,520 --> 00:28:02,080
Speaker 1: perfect to hold a flapper parties to it. Let's see

561
00:28:02,119 --> 00:28:03,920
Speaker 1: it there. It was my birthdate. We hate to haven't

562
00:28:03,920 --> 00:28:06,320
Speaker 1: had a proper party. We we'll get onto that. Really

563
00:28:06,359 --> 00:28:09,479
Speaker 1: but when we're talking about timelines, I think it's important

564
00:28:09,480 --> 00:28:11,399
Speaker 1: to educate you on that. Did you know that the

565
00:28:11,480 --> 00:28:15,840
Speaker 1: average recession lasts eleven months? So if we look at

566
00:28:16,040 --> 00:28:20,000
Speaker 1: the average lengths of recessions from nineteen forty five until

567
00:28:20,040 --> 00:28:22,480
Speaker 1: two thousand and nine cough that was when our last

568
00:28:22,480 --> 00:28:26,240
Speaker 1: one was, the average recession actually lasts about eleven months,

569
00:28:26,320 --> 00:28:28,960
Speaker 1: or let's call it a year. And that is kind

570
00:28:28,960 --> 00:28:31,440
Speaker 1: of scary because we're not talking about like, oh, gee,

571
00:28:31,480 --> 00:28:33,800
Speaker 1: it'll just be a couple of months. Like eleven months

572
00:28:33,840 --> 00:28:36,960
Speaker 1: is a long time, Like that is longer than just

573
00:28:37,000 --> 00:28:40,120
Speaker 1: making a baby. Is that a good measure of time?

574
00:28:40,320 --> 00:28:40,600
Speaker 3: Sure?

575
00:28:40,880 --> 00:28:43,000
Speaker 1: I feel like it's too masure of time. It's a

576
00:28:43,000 --> 00:28:46,280
Speaker 1: really good measure of time. I literally use the time

577
00:28:46,320 --> 00:28:49,240
Speaker 1: it takes to create human life as a measure of things.

578
00:28:49,360 --> 00:28:50,360
Speaker 3: It is quite good.

579
00:28:50,840 --> 00:28:52,920
Speaker 1: Like if someone says, oh, three months, I'm like, oh,

580
00:28:53,000 --> 00:28:56,640
Speaker 1: that's like baby is cooked. Yeah. Literally, if someone's like

581
00:28:56,680 --> 00:28:59,000
Speaker 1: ten months, I'm like, guys, that's so long you could

582
00:28:59,040 --> 00:29:01,680
Speaker 1: literally create human in that period of time.

583
00:29:01,840 --> 00:29:05,680
Speaker 3: Interesting, it's not as long as I thought, recession wise.

584
00:29:05,720 --> 00:29:09,800
Speaker 3: But you saying that a recession typically lasts for eleven months,

585
00:29:09,840 --> 00:29:12,040
Speaker 3: does that mean we can predict these kinds of things

586
00:29:12,400 --> 00:29:14,920
Speaker 3: if we understand that, like why can't we you know

587
00:29:14,960 --> 00:29:15,800
Speaker 3: what I'm saying.

588
00:29:15,600 --> 00:29:20,640
Speaker 1: Look uncertain. So given that economic forecasting is uncertain, like

589
00:29:21,360 --> 00:29:23,320
Speaker 1: I've said it before on the podcast, like, if I

590
00:29:23,320 --> 00:29:26,040
Speaker 1: could predict the shell markets, sir, I'd be rich and

591
00:29:26,080 --> 00:29:28,560
Speaker 1: I wouldn't have to do this podcasts No.

592
00:29:28,520 --> 00:29:30,040
Speaker 3: I did do it anyway, because you love it.

593
00:29:30,160 --> 00:29:33,000
Speaker 1: I literally do. I did this when I wasn't being paid,

594
00:29:33,040 --> 00:29:35,480
Speaker 1: and now I'm being paid. I'm like, this is great, guys,

595
00:29:35,920 --> 00:29:38,760
Speaker 1: But no, you can't predict it in a really easy way,

596
00:29:38,800 --> 00:29:40,560
Speaker 1: in the same way you could predict when you're able

597
00:29:40,560 --> 00:29:43,000
Speaker 1: to see Mars in the sky. Right. But there are

598
00:29:43,120 --> 00:29:46,360
Speaker 1: a few things that were tell tale signs, and we've

599
00:29:46,400 --> 00:29:50,760
Speaker 1: spoken about them. Bushfires, coronavirus, war like, all of these

600
00:29:50,800 --> 00:29:55,280
Speaker 1: things add up to economists going there's probably gonna be

601
00:29:55,280 --> 00:29:58,360
Speaker 1: a recession at some point, but there are some indicators

602
00:29:58,440 --> 00:30:00,640
Speaker 1: or warning signs that can give you a little bit

603
00:30:00,640 --> 00:30:02,960
Speaker 1: more time to figure out how to plan for a

604
00:30:03,000 --> 00:30:07,480
Speaker 1: recession or when one is coming. So the first again

605
00:30:07,600 --> 00:30:11,720
Speaker 1: financial advisor had is being put on an inverted yield cycle.

606
00:30:11,880 --> 00:30:14,600
Speaker 1: So a yield cycle is a graph that essentially plots

607
00:30:14,640 --> 00:30:17,959
Speaker 1: market value or the yield. So yield is essentially how

608
00:30:18,000 --> 00:30:21,600
Speaker 1: much money it makes. And when an economy is functioning normally,

609
00:30:21,680 --> 00:30:24,360
Speaker 1: yield should be higher on long term bonds and you know,

610
00:30:24,760 --> 00:30:28,480
Speaker 1: solid assets. But when long term yields are lower than

611
00:30:28,560 --> 00:30:31,640
Speaker 1: short term yields, so when long term cash coming in

612
00:30:31,720 --> 00:30:34,560
Speaker 1: is lower than short term cash coming in, it shows

613
00:30:34,600 --> 00:30:37,840
Speaker 1: investors are a little bit worried about recession. So it

614
00:30:37,960 --> 00:30:40,200
Speaker 1: means that they're you know, not putting so many eggs

615
00:30:40,240 --> 00:30:42,640
Speaker 1: in so many baskets. They're holding their cards a little

616
00:30:42,640 --> 00:30:45,600
Speaker 1: bit closer to their chests. And this is like quote,

617
00:30:45,600 --> 00:30:49,400
Speaker 1: a phenomenon known as a yield curve inversion. And as

618
00:30:49,400 --> 00:30:53,080
Speaker 1: a financial advisor, I obviously look at this and I go, okay, cool,

619
00:30:53,160 --> 00:30:56,520
Speaker 1: that makes sense. I read the textbook. But economists will

620
00:30:56,560 --> 00:30:59,400
Speaker 1: look at that and go, hey, this has been something

621
00:30:59,440 --> 00:31:03,440
Speaker 1: that has happened before every single recession that has ever happened.

622
00:31:04,320 --> 00:31:08,840
Speaker 1: The next is declining consumer confidence. So consumer confidence is

623
00:31:08,880 --> 00:31:11,320
Speaker 1: like how willing you are to buy stuff? Like right now? Gee,

624
00:31:11,320 --> 00:31:13,240
Speaker 1: if I said got and invest, you'd be like, ah,

625
00:31:13,320 --> 00:31:15,600
Speaker 1: but the market's down, like not sure if I want

626
00:31:15,640 --> 00:31:18,680
Speaker 1: to do that? And this is able to be measured

627
00:31:18,680 --> 00:31:22,600
Speaker 1: with consumer spending. So if surveys that are done on

628
00:31:22,720 --> 00:31:26,840
Speaker 1: you know, what Australians and what Americans are spending shows

629
00:31:26,880 --> 00:31:30,520
Speaker 1: us sustained dropping consumer confidence, it could be a sign

630
00:31:30,720 --> 00:31:34,360
Speaker 1: that we're going into some economic trouble. So essentially, people

631
00:31:34,400 --> 00:31:36,800
Speaker 1: are spending less because they're trying to save more money

632
00:31:36,800 --> 00:31:40,600
Speaker 1: because they're a little bit apprehensive of the future. Another

633
00:31:40,800 --> 00:31:43,960
Speaker 1: is a sudden stock market decline, so we have just

634
00:31:44,160 --> 00:31:47,560
Speaker 1: seen that and ours was a result of inflation. And

635
00:31:47,600 --> 00:31:51,200
Speaker 1: then the other is rising unemployment. And we mentioned this before,

636
00:31:51,200 --> 00:31:53,560
Speaker 1: but it essentially goes without saying that if people are

637
00:31:53,560 --> 00:31:56,760
Speaker 1: losing their jobs, it's a pretty bad sign for the economy.

638
00:31:56,800 --> 00:31:58,880
Speaker 1: Like that ain't a good thing. And just a few

639
00:31:58,880 --> 00:32:01,880
Speaker 1: months of pretty steep job losses is a pretty good

640
00:32:02,000 --> 00:32:06,160
Speaker 1: indicator that there is an imminent recession, because that is businesses.

641
00:32:06,320 --> 00:32:08,360
Speaker 1: It's not because people are not willing to work and

642
00:32:08,400 --> 00:32:10,680
Speaker 1: they're all going on holiday and not coming back. It's

643
00:32:10,680 --> 00:32:13,840
Speaker 1: because businesses are being a little bit more apprehensive and

644
00:32:13,880 --> 00:32:16,400
Speaker 1: they're less likely to hire. They might go, gee, like,

645
00:32:16,440 --> 00:32:18,640
Speaker 1: I know we want to expand, but maybe let's put

646
00:32:18,640 --> 00:32:21,640
Speaker 1: this off another quarter or another six months. So there's

647
00:32:21,720 --> 00:32:24,880
Speaker 1: less jobs in the job market in saying that that's

648
00:32:24,960 --> 00:32:27,640
Speaker 1: quite contradictory to the information that she's on the money's

649
00:32:27,640 --> 00:32:30,240
Speaker 1: been talking about about the great resignation, right, like everyone's

650
00:32:30,600 --> 00:32:33,120
Speaker 1: getting a new job and it's really great. But that

651
00:32:33,280 --> 00:32:37,760
Speaker 1: is actually a really entitled view because that's for educated people,

652
00:32:38,200 --> 00:32:41,360
Speaker 1: not for the workers that usually lose their jobs during

653
00:32:41,360 --> 00:32:43,000
Speaker 1: a recession. If that makes sense.

654
00:32:43,080 --> 00:32:46,720
Speaker 3: Yeah, yeah, So v back to the bear market situation

655
00:32:47,000 --> 00:32:50,840
Speaker 3: where we currently are existing. Is there a particular type

656
00:32:50,880 --> 00:32:53,800
Speaker 3: of stock that people are fearfull of buying that they're

657
00:32:53,840 --> 00:32:56,400
Speaker 3: pulling out, that they're losing faith in or is it

658
00:32:56,800 --> 00:32:57,400
Speaker 3: lost the board?

659
00:32:57,480 --> 00:32:59,560
Speaker 1: I don't think people are losing faith in it, you

660
00:32:59,680 --> 00:33:00,400
Speaker 1: drama queen.

661
00:33:00,520 --> 00:33:00,640
Speaker 2: You.

662
00:33:00,880 --> 00:33:05,320
Speaker 1: I mean, this is some scary shit, but it's one

663
00:33:05,360 --> 00:33:08,320
Speaker 1: of those things where I don't think people are losing faith,

664
00:33:08,520 --> 00:33:11,360
Speaker 1: but they are less likely to buy things that are

665
00:33:12,160 --> 00:33:16,280
Speaker 1: not stockstanded. So this is where blue chip shares shine.

666
00:33:16,360 --> 00:33:19,200
Speaker 1: And I've spoken about it before, but essentially a blue

667
00:33:19,240 --> 00:33:22,880
Speaker 1: chip share is a share with a national or international

668
00:33:22,960 --> 00:33:27,440
Speaker 1: reputation of equality, reliability, and the ability to operate profitably

669
00:33:27,520 --> 00:33:30,600
Speaker 1: in good and bad times. And that's where people fall

670
00:33:30,640 --> 00:33:34,080
Speaker 1: back on industries that are going to stand the test

671
00:33:34,080 --> 00:33:39,560
Speaker 1: of time, Wollice Coals banks things that are essential for

672
00:33:39,640 --> 00:33:43,480
Speaker 1: the operation of our economy and less likely to invest

673
00:33:43,560 --> 00:33:45,720
Speaker 1: in things that are a little bit more frivolous. So

674
00:33:45,760 --> 00:33:48,000
Speaker 1: like people often end up pulling back on things like

675
00:33:48,120 --> 00:33:50,280
Speaker 1: tech where they're like, oh, I don't need that so much,

676
00:33:50,320 --> 00:33:52,400
Speaker 1: but I will invest in something that I know is

677
00:33:52,440 --> 00:33:55,120
Speaker 1: tried and true. In saying that, something that I think

678
00:33:55,120 --> 00:33:58,560
Speaker 1: you're going to find really interesting is the lipstick effect.

679
00:33:58,600 --> 00:33:59,840
Speaker 1: Have you heard of this before?

680
00:34:00,400 --> 00:34:04,800
Speaker 3: Uh? No, No, that was I was trying to think of.

681
00:34:04,880 --> 00:34:08,080
Speaker 3: I'm assuming it means like making something look glossier than

682
00:34:08,120 --> 00:34:08,520
Speaker 3: it is.

683
00:34:08,719 --> 00:34:10,799
Speaker 1: Oh that's cute. No, but it's not it at all.

684
00:34:10,840 --> 00:34:13,440
Speaker 1: But like, that's actually a really good analogy of it.

685
00:34:13,480 --> 00:34:14,719
Speaker 1: I thought you were going to be like the I

686
00:34:14,760 --> 00:34:18,279
Speaker 1: don't wear makeup, don't like lipstick, not gonna happen. Not wrong,

687
00:34:18,320 --> 00:34:21,200
Speaker 1: but it's quite interesting. So the lipstick effect is the

688
00:34:21,200 --> 00:34:24,880
Speaker 1: theory that when facing an economic crisis, consumers and people

689
00:34:24,920 --> 00:34:28,640
Speaker 1: are more likely to buy less costly luxury goods. So

690
00:34:28,719 --> 00:34:31,640
Speaker 1: instead of like buying designer bags and shoes and stuff like,

691
00:34:31,719 --> 00:34:34,840
Speaker 1: we're more likely to go and make ourselves feel better

692
00:34:34,880 --> 00:34:39,120
Speaker 1: with small purchases like lipstick. Interesting, and this is where

693
00:34:39,120 --> 00:34:43,000
Speaker 1: cosmetic companies thrive during a recession, which I probably bet

694
00:34:43,080 --> 00:34:43,880
Speaker 1: you didn't see coming.

695
00:34:43,960 --> 00:34:46,440
Speaker 3: So invest in Mecca is our advice today.

696
00:34:46,560 --> 00:34:50,439
Speaker 1: I will absolutely be doing that today and every day.

697
00:34:50,480 --> 00:34:53,080
Speaker 1: In fact, low key, I'm a little bit salty. Lost

698
00:34:53,160 --> 00:34:54,520
Speaker 1: by level three.

699
00:34:54,760 --> 00:34:55,800
Speaker 3: I don't know what that means.

700
00:34:55,960 --> 00:34:59,600
Speaker 1: Okay, well, if you know, you know, Just to be super.

701
00:34:59,280 --> 00:35:01,839
Speaker 3: Clear there, don't invest in Mecca. Do it if you want,

702
00:35:01,880 --> 00:35:03,840
Speaker 3: but we're certainly not telling you to because this is

703
00:35:03,920 --> 00:35:04,760
Speaker 3: not about financially.

704
00:35:04,760 --> 00:35:08,320
Speaker 1: I mean, invest in the products from Mecca. I'm sure

705
00:35:09,600 --> 00:35:13,040
Speaker 1: ten out of ten, kiss me stunning.

706
00:35:12,800 --> 00:35:15,279
Speaker 3: Back to it. We're about to wrap up, so I

707
00:35:15,320 --> 00:35:17,680
Speaker 3: want to You're going to rap fish, I'm gonna I'm

708
00:35:17,680 --> 00:35:20,799
Speaker 3: gonna start playing the Oscars music. I'm mean to end

709
00:35:20,800 --> 00:35:25,879
Speaker 3: it selfishly. How does this impact me personally? How does

710
00:35:25,880 --> 00:35:29,359
Speaker 3: it impact people community? What does this mean?

711
00:35:29,480 --> 00:35:31,080
Speaker 1: I mean, I could be really dramatic and be like,

712
00:35:31,120 --> 00:35:33,680
Speaker 1: you're at risk of losing your job, not you, Georgia King,

713
00:35:33,719 --> 00:35:37,319
Speaker 1: because we will continue to make content forever. But unemployment

714
00:35:37,400 --> 00:35:40,160
Speaker 1: levels are rising, and I think that it is important

715
00:35:40,239 --> 00:35:42,360
Speaker 1: to be quite aware of that and quite aware of

716
00:35:42,400 --> 00:35:45,480
Speaker 1: your education and what you're doing in case that job

717
00:35:46,040 --> 00:35:49,000
Speaker 1: is not as sustainable or as stable as you might

718
00:35:49,040 --> 00:35:53,320
Speaker 1: think it is. So not only is our community feels

719
00:35:53,320 --> 00:35:55,719
Speaker 1: so bad, but not only is our community much more

720
00:35:55,800 --> 00:35:57,719
Speaker 1: likely to lose their current job, it's going to be

721
00:35:57,760 --> 00:36:00,560
Speaker 1: harder to find a job replacement since more people are

722
00:36:00,600 --> 00:36:02,040
Speaker 1: out of work and looking for a job at the

723
00:36:02,040 --> 00:36:04,840
Speaker 1: same time. So it's a very competitive environment to be

724
00:36:04,880 --> 00:36:07,560
Speaker 1: and if you're looking for a new role, So people

725
00:36:07,600 --> 00:36:10,840
Speaker 1: who are keeping their jobs, they might see no pay rises.

726
00:36:10,920 --> 00:36:12,799
Speaker 1: So as much as inflation's going up and we have

727
00:36:12,880 --> 00:36:16,520
Speaker 1: this expectation that our employers will meet that level of inflation,

728
00:36:16,840 --> 00:36:18,879
Speaker 1: they might not be able to afford to do so,

729
00:36:19,320 --> 00:36:22,040
Speaker 1: and it might make it harder for you to negotiate

730
00:36:22,120 --> 00:36:25,279
Speaker 1: further pay rises, which obviously actually's on the money. We're

731
00:36:25,280 --> 00:36:28,319
Speaker 1: always like, no, you're worth but also, let's read the room,

732
00:36:28,400 --> 00:36:31,319
Speaker 1: and let's see how hard it is for our actual community. Right,

733
00:36:31,400 --> 00:36:33,560
Speaker 1: So it's going to be really dependent on the type

734
00:36:33,560 --> 00:36:35,480
Speaker 1: of business that you're in. You might be thriving, you

735
00:36:35,520 --> 00:36:37,400
Speaker 1: might get a massive pay rise. In a lot of

736
00:36:37,480 --> 00:36:42,000
Speaker 1: industries that might not be as possible. Investments like shares

737
00:36:42,160 --> 00:36:45,120
Speaker 1: and bonds and real estate is probably going to be

738
00:36:45,280 --> 00:36:48,359
Speaker 1: valued less which could be a blessing or it could

739
00:36:48,400 --> 00:36:51,399
Speaker 1: be a curse. Like if that's your investment and you're

740
00:36:51,440 --> 00:36:53,360
Speaker 1: looking at it going, oh my gosh, my ship football.

741
00:36:53,600 --> 00:36:56,840
Speaker 1: It's worth so much less. Not a good thing. It

742
00:36:56,880 --> 00:37:00,279
Speaker 1: will recover, It's okay, don't stress. But it also could

743
00:37:00,280 --> 00:37:03,240
Speaker 1: be a great opportunity if some people in our community

744
00:37:03,280 --> 00:37:06,000
Speaker 1: have been hustling and hustling to get their home deposit together.

745
00:37:06,160 --> 00:37:07,719
Speaker 1: And I'm hoping this is how it works out for

746
00:37:07,760 --> 00:37:11,600
Speaker 1: miss Jizicarucci. Property is going to be hopefully a little

747
00:37:11,600 --> 00:37:14,239
Speaker 1: bit cheaper, a little bit more affordable, a little bit

748
00:37:14,239 --> 00:37:18,320
Speaker 1: more accessible. Like I mean, surely everybody is seeing that coming.

749
00:37:18,360 --> 00:37:21,160
Speaker 1: Given avocados are what a dollar twenty at the supermarket.

750
00:37:21,360 --> 00:37:24,600
Speaker 1: Thing that I'm not that's true. If we can afford

751
00:37:24,640 --> 00:37:27,920
Speaker 1: avocados at that price, surely soon millennials will be taking

752
00:37:28,040 --> 00:37:32,600
Speaker 1: over the property market. So that is going to happen. Obviously,

753
00:37:32,920 --> 00:37:36,560
Speaker 1: when we see downturn in the share price, it means

754
00:37:36,560 --> 00:37:39,320
Speaker 1: that our retirement savings are going to look a little

755
00:37:39,440 --> 00:37:43,040
Speaker 1: less sexy. If you're in that situation where you are

756
00:37:43,239 --> 00:37:47,400
Speaker 1: planning for retirement, definitely speak to a financial advisor or

757
00:37:47,600 --> 00:37:52,880
Speaker 1: organize your financial affairs to be a little bit more stable. Unfortunately,

758
00:37:53,120 --> 00:37:56,200
Speaker 1: if you're in a situation where you know the prospect

759
00:37:56,320 --> 00:37:59,200
Speaker 1: of losing your job is real, it might make paying

760
00:37:59,239 --> 00:38:02,560
Speaker 1: bills really hard. It might make you know, keeping the

761
00:38:02,600 --> 00:38:05,640
Speaker 1: mortgage repayments up really challenging. And I think that that's

762
00:38:05,680 --> 00:38:09,239
Speaker 1: where to day and every day I'm a stauncher advocate

763
00:38:09,320 --> 00:38:12,040
Speaker 1: of an emergency fund, but I think now more than ever,

764
00:38:12,120 --> 00:38:14,640
Speaker 1: it's just really important to have that in your back pocket.

765
00:38:14,719 --> 00:38:17,200
Speaker 1: Or even if you're in the privileged position of being

766
00:38:17,239 --> 00:38:19,239
Speaker 1: able to beef it up a little bit more, I

767
00:38:19,360 --> 00:38:23,600
Speaker 1: absolutely would consider that because it's so important. As a

768
00:38:23,640 --> 00:38:25,799
Speaker 1: business owner. I know there are lots of business owners

769
00:38:25,840 --> 00:38:27,480
Speaker 1: in the Shees on the Money community because a little

770
00:38:27,480 --> 00:38:30,080
Speaker 1: while ago we did a census and twenty percent of

771
00:38:30,120 --> 00:38:32,000
Speaker 1: people said they were either a business owner or a

772
00:38:32,000 --> 00:38:36,080
Speaker 1: side hustler. Really really cool, and thankfully in Australia we

773
00:38:36,160 --> 00:38:39,160
Speaker 1: are in again a very privileged country where during a

774
00:38:39,239 --> 00:38:43,799
Speaker 1: recession our government usually tries very hard to support small businesses.

775
00:38:44,200 --> 00:38:47,080
Speaker 1: But small businesses are more likely to feel the brunt

776
00:38:47,120 --> 00:38:51,600
Speaker 1: of it, purely because people are like spending less and

777
00:38:52,000 --> 00:38:54,959
Speaker 1: small businesses are more likely to feel that because they're

778
00:38:55,440 --> 00:38:59,239
Speaker 1: already harder to access, right, I think understanding what a

779
00:38:59,239 --> 00:39:03,160
Speaker 1: bear market is and what preparing for a recession actually means.

780
00:39:03,239 --> 00:39:05,399
Speaker 1: But I think that all of the things that I'm

781
00:39:05,440 --> 00:39:09,279
Speaker 1: recommending are actually thinks we should be doing, regardless of

782
00:39:09,320 --> 00:39:12,760
Speaker 1: the economic situation, to put ourselves in the best possible

783
00:39:12,800 --> 00:39:15,120
Speaker 1: financial situation. So I don't want to end this on

784
00:39:15,200 --> 00:39:17,680
Speaker 1: a oh my gosh, everything's going up the wall, like

785
00:39:17,719 --> 00:39:20,200
Speaker 1: this isn't good at all, Like it is what it is.

786
00:39:20,640 --> 00:39:23,080
Speaker 1: We went through a market correction earlier this year when

787
00:39:23,120 --> 00:39:25,160
Speaker 1: it went down by ten percent. We're now at twenty

788
00:39:25,239 --> 00:39:28,120
Speaker 1: two percent, and it's been labeled a bear market. It's

789
00:39:28,160 --> 00:39:30,560
Speaker 1: not as scary as you think it is. The market

790
00:39:30,600 --> 00:39:33,759
Speaker 1: always recovers. If you are in doubt, zoom out and

791
00:39:33,840 --> 00:39:35,719
Speaker 1: have a look at the bigger picture and see what

792
00:39:35,920 --> 00:39:39,200
Speaker 1: every other market recovery has looked like and how long

793
00:39:39,239 --> 00:39:41,920
Speaker 1: that takes. But there is always light at the end

794
00:39:42,000 --> 00:39:45,440
Speaker 1: of the tunnel, and this is just how economics works perfectly.

795
00:39:45,680 --> 00:39:48,319
Speaker 3: Well, I'm feeling a little bit less frightened than I

796
00:39:48,480 --> 00:39:50,200
Speaker 3: was at the start, So thank you so much for

797
00:39:50,239 --> 00:39:52,480
Speaker 3: explaining it all, making it a little bit more understanding.

798
00:39:52,520 --> 00:39:55,080
Speaker 1: I've loved this chat. Though, let's do an entire one

799
00:39:55,120 --> 00:39:57,560
Speaker 1: on a recession and the GFC and all of this.

800
00:39:57,680 --> 00:40:00,200
Speaker 1: Do you think people want us excited? My d that

801
00:40:00,200 --> 00:40:02,160
Speaker 1: absolutely what you want us to do, I mean, also

802
00:40:02,280 --> 00:40:04,200
Speaker 1: makes my content planning a lot easier.

803
00:40:04,200 --> 00:40:04,560
Speaker 3: That's true.

804
00:40:04,600 --> 00:40:05,080
Speaker 1: That is true.

805
00:40:05,160 --> 00:40:07,840
Speaker 3: Thank you, boring but important stuff. Go for it, do

806
00:40:07,960 --> 00:40:10,640
Speaker 3: it alrighty guys. Please remember that the advice shared on

807
00:40:10,760 --> 00:40:13,000
Speaker 3: She's on the Money is general in nature and does

808
00:40:13,040 --> 00:40:15,920
Speaker 3: not consider your individual circumstances.

809
00:40:15,239 --> 00:40:17,240
Speaker 1: Except for when buying nas Shigo.

810
00:40:17,800 --> 00:40:20,680
Speaker 3: Ten out of ten. She's on the Money exists purely

811
00:40:20,719 --> 00:40:23,480
Speaker 3: for educational purposes and should not be relied upon to

812
00:40:23,480 --> 00:40:26,520
Speaker 3: make an investment or a financial decision. And we promise

813
00:40:26,640 --> 00:40:30,080
Speaker 3: Victoria Divine and She's on the Money are authorized representatives

814
00:40:30,200 --> 00:40:34,399
Speaker 3: in Focus Securities Australia Proprietary Limited, ABIAN four seven zero

815
00:40:34,440 --> 00:40:37,160
Speaker 3: nine seven seven nine seven zero four nine AFSL two

816
00:40:37,239 --> 00:40:40,160
Speaker 3: three six five two three. And please guys join us

817
00:40:40,160 --> 00:40:43,200
Speaker 3: in the Facebook community if you're not there already, especially

818
00:40:43,239 --> 00:40:45,239
Speaker 3: if you're feeling really daunted at the moment. It's the

819
00:40:45,280 --> 00:40:47,400
Speaker 3: safest place and there's going to be a lot of

820
00:40:47,440 --> 00:40:49,000
Speaker 3: girls in there that are feeling the same way, and

821
00:40:49,080 --> 00:40:50,160
Speaker 3: we can all support each other.

822
00:40:50,360 --> 00:40:51,160
Speaker 1: See her on Friday.

823
00:40:51,280 --> 00:41:02,440
Speaker 3: My Love bye guys,