The Art of Investing in Volatile Markets

With the turbulent state of today’s markets, it’s no surprise that there’s been a lot of noise around the future of Australia’s market and what it means for investors.

With many conflicting trends and numbers, and a lack of clarity around the origins of Australia’s inflation, it’s hard to know what remedy is needed from the Reserve Bank of Australia or how to keep successfully investing in such markets.

In Part 2 of this educational series, Ben Kingsley, Managing Director of Empower Wealth and Michael Savy, Partner and Chief Financial Planner of Empower Wealth, break down this market data, what “noise” you should and shouldn’t be listening to, and how to remain calm during unpredictable market conditions.

In case you missed Part 1, be sure to check it out here >> COVID-19 & Share Market Analysis

Timestamps

0:00 – Where we left off…
0:54 – The Car Analogy
4:39 – Where did Australia’s inflation come from?
6:51 – Taming Inflation
9:09 – Inflation & Interest Rates
13:28 – Data Dependent
17:13 – Markets
22:38 – What opportunities are there today?
24:29 – What happens when inflation runs away…
25:27 – How to keep investing in volatile markets

Transcript

Ben Kingsley:

Hi, Ben Kingsley here, Managing Director of Empower Wealth, and I’m with Michael Savy, who’s a partner in our advisory practise and heads up our Financial Planning team. If this is the first time you’ve watched an update from us too, you would’ve missed an original update that we did back in March, as COVID was just coming out , we thought we’d do another important update for you and look at a bit of the data out in the marketplace to just set the scene because we are coming out of a post COVID period and there are a few clouds forming in regards to the broader global economy and also what’s happening on the share market. So Michael, thanks for your time today. What I thought we’d start with is just, we did an analogy or a story around what was happening during that COVID period. So let’s, let’s use that as a starting point in terms of where we saw the marketplace at that time.

Michael Savy:

Yeah, look at the time, you know, this big uncertainty, a health issue. We were going into lockdown, well, potentially going into lockdowns. We didn’t quite know what it was like. So I used, to try and simplify the scenario and explain it to a lot of our clients, I used a car analogy where we were looking to go on holidays, but we couldn’t because of lockdown etcetera.

Michael Savy:

And, you know the Federal Reserve and the RBA, I complimented them on how great a job they did for keeping the car ready to go and keeping us from a recession. So I thought it’d be apt to use a similar car analogy just to try and walk and explain to our clients as simply as I can, some of the issues that are facing the Federal Reserve and how that then subsequently impacts us and even our individual households as well. So in this case let’s say we’re gonna use this car analogy. Now the difference here is that the driver on this occasion, in this instance is not us. It’s the Reserve Bank Governor, Philip Lowe and the Fed Reserve. Now, essentially they’re in the car and they need to get to the airport cause they’ve got a flight booked and we all know that feeling.

Michael Savy:

And here in Melbourne, we’re on the M3 heading towards the airport, but then we come to this sudden break where we need to stop because there’s an accident and all of a sudden were trickling through, slowly through past the accident. And then we realise that, “oh, we’ve just lost some time and we know we’ve gotta get there so we can put our bags and whatnot”. So well, naturally most people would, what would they do? They floor it, you know, And more than likely we’re going a little bit above the speed limit essentially. That was the COVID, you know, we had this slow lockdown. We tried to get out of it by putting stimulus in.

Ben Kingsley:

Heaps of fuel in the tank.

Michael Savy:

Exactly.

Ben Kingsley:

Plenty of cash in the household.

Michael Savy:

Exactly. Exactly. And now we’re accelerating to try and make that flight to, but the problem is, we’re well above speed limit. Yeah. Our ultimate goal or the RBA’s ultimate goal is to either fly to get to within a 2 to 3% interest rate range. Yeah. So they are mindful of that and they are mindful of the fact that they are speeding. Now the problem is that, and I’m gonna steal and paraphrase from Ben, the role of the government and the tools at their disposal. It’s a bit like being behind the wheel looking at the odometer or the dashboard, which is not working the best. Yeah. So it’s a bit sticky. So we don’t quite know a lot of noise in it. We can see that we’re probably doing a hundred hundred a bit, but we need to slow down. So then therefore we’re gonna have to step on the brakes a little bit.

Michael Savy:

Yeah. Now the problem with this car with a bit like the tools available to the RBA is that it’s a bit sticky. So putting the foot on the brake, it takes a little bit of time for it to kick in. Yeah. Similarly, when we accelerate, it takes a little bit of time to kick in and that is the transmission mechanism of interest rates. You know, it takes somewhere which between 6 12 18 months Yeah. To fully deploy. So that’s the position that they’re at. They know that they need to get to the airport so they can catch their flight. Yeah. They know they’re about their speeding, but they don’t want to cop a speeding phone, but they’ve got these dodgy odometer. Yeah. And a couple of dodgy breaks and

Ben Kingsley:

Accelerator. I think it’s a, a wonderful analogy because effectively we are trying to get on top of inflation. Yeah, that’s right. As soon as we possibly can. So that’s that urgency. Um, and like what you’re saying around pumping the brakes, even though we’re pumping them, we’re not getting enough fluid in there. So it’s not slowing the car down that’s quick enough. That’s right. So it’s this sort of stop start sort of situation that we’ve got. So I thought okay, let’s, um, let’s turn to some of the data that we wanted to talk to. The first one is obviously very much this inflation story now mm-hmm. <affirmative>, unless you’ve been living under a rock, um, you would, you would know that inflation originally occurred through, uh, Russia’s invasion into, um, Ukraine as well as obviously all of the supply chain issues and bottlenecks that we saw during that stop start covid experiments and, and those types of things that were also happening as well. So we’ve now starting to see, you know, some really good examples of, um, uh, shipping costs coming down. Um, some of those bottlenecks starting to, so that supply side inflation story, whilst we still have Russia and Ukraine and, and energy costs and all that, you know, very, very high. We’re starting to see that sort of now come off a little bit when we’ve now got a little bit of demand led inflation that’s in there. And that comes back to we’re all cashed up.

Michael Savy:

Yeah. Look and, and absolutely. So I mean all else being equal, you know, the more money we dump into the system as what um, the government did during the covid, which was the bit that I was compliment them, complimenting them on previously, the more money we have in the system, the more that we can bid for assets and that’s where we get the inflation now. Yeah. This is one of those strange periods in time. A confluence of all a number of different factors that come through. So we have the demand side more money in the system where you have geopolitical factors. Yep. And we have have different covid policies around the world, which is cause supply, supply chain disruptions. Yeah. And so they’ve all come together. The hard part for the RBA is to work out what is the systemic general inflation, What is this, um, the inflation that’s come through because of those one off factors or, um, so for example, the Ukraine situation.

Michael Savy:

Um, so we all knew that inflation was gonna kick in at some point. Now what we’ve noticed is that, uh, or the data support presenting is that especially in the us which we get to see a little bit of a gauge because here in Australia we are in lockdown when they were still opening up. Yeah. We can sort of see the trajectory of which where we’re gonna head towards, which is similar to theirs. Maybe not quite as high. No. But absolutely the inflation’s gone up quite significantly the the highest in quite some time. Yeah. Um, in decades. And so the RBA and the Fed reserve needs to reign that in. Okay.

Ben Kingsley:

Yeah. Well let’s have a look at the, so there’s the headline US inflation number that we saw, and then we also are seeing the Australian headline inflation. So we are definitely lagging the US and the uk and we are definitely seeing a synchronised, um, uh, attempt by all of the Fed reserves around, you know, in the reserve banks around the world, in the western developed world, they’re starting to raise those interest rates cuz everyone’s trying to bring that inflation genie and bring it back into the bottle. And, and so through that mechanism, um, in terms of, you know, the, the, the conflicting data points and, and understanding of where that’s going to land, it’s very hard to determine because we still have a lot of pent up demand and we still have obviously cash in bank. So it’s just how far the reserve are gonna have to

Michael Savy:

Go and this, and the reason why I’ve got, I’ve got a point there with regards to, you know, when there was a slowdown even in the gfc, um, everything slowed down. Uh, we nearly, we avoided recession. Other countries went into the recession. Even for us here in Australia, we uh, had to increase with all the stimulus money that we had going into the system, the RBA did have to increase rates from about 3% up to around about 4.75 because of all the stimulus money Yeah. To sort of, again, slow down and keep the inflation in rain. And, and now that as much as difficult and as, uh, bad as the GFC was, it’s not as confusing as what we’ve got now because again, we have these conflicting data points where, for example, property prices are going down in certain areas. Yep. Usually that’s a company with unemployment and increase in unemployment. Yep. But yet here we’ve got low unemployment record lower

Ben Kingsley:

Exactly 50 year at low

Michael Savy:

Property prices coming down. It’s

Ben Kingsley:

A, it’s a perfect segueway Michael into obviously the next chart that we wanted to show. And we can definitely see that when inflation comes into the markets, what’s, generally speaking, what happens is that the, the investors are looking at those businesses that make up the equity markets and they’re sort of saying if inflation’s coming in and the reserve banks and governors are trying to slow down the economy, so it’s a manufactured slowdown, then everyone’s worried about earnings, everyone’s worried about profitability and we see an adjustment when it comes to, you know, the asset prices and the valuations of those businesses. And you are referring to this, this example. So talk us through this

Michael Savy:

Example. Um, so what I’ve got here, so one of the benefits of working at Empower Wealth is that we have a lot of clients who have property portfolio investment property portfolios, and intuitively Australians being lovers of property. We know that when the RBA increases interest rates, property prices generally will come

Ben Kingsley:

Down. Generally speaking,

Michael Savy:

Generally speaking. Now the same thing also happens in the stock market world. The difference here is that um, we are probably more reliant on the 10 year bond rate. Yeah. As, as our, uh, that’s the preferred data point that we use as opposed to the rba. That’s not that we ignore the RBA rate. Um, in fact that’s where we look at the yield curve. Um, essentially, but what I wanted to highlight there was that uh, the relationship between interest rates and the investment markets are pretty strong. So you can see there, I’ve just put in the US 10 year rate. Yeah. Um, and the three different markets, the ASEX 200, the s and p 500 in the us which is a broad base index. Yeah. And then the nasdaq, which a lot of people familiar with, they have the high growth pe, high pe, sorry, high growth, uh, tech stocks and things like that.

Michael Savy:

Yeah. Now if you look at that chart, if you flip that 10 year rate upside down, you’ll notice that the stock market actually operates and moves very similarly. But on top of that, different markets and different types of stocks get hit differently. Equally in that when the interest rates went up high PE stocks, and that can include CSL and those types as well. Yep. They will get hit more than, let’s say, if you’ve got a big blue chip with high profits, high income, which is why in the news you’ll probably see, or if you’re reading the financial papers in, in the Herald, they are talking about, look, if you want defensive portfolio, you would be looking for companies that have strong income. It’s protection against the uh, uh, inflation or the interest rate expenses. Yeah. But on the flip side, some of the smaller companies, which we can see here that have come off, they are also the ones that have the capacity to increase earnings over time. It’s just that they don’t have earnings now.

Ben Kingsley:

Well the profit, and again, you’re seeing those, you know, you’re seeing the top, uh, indices such as the ASX 200, the s and p 500 and the nasdaq. Um, there is obviously gonna be opportunities in the marketplace for the individual businesses. Yeah. And that’s part of the work you do in terms of trying to find those individual businesses. But I just wanted to remind, you know, we look back at the chart again, you can see that inverse relationship. So when you’re sort of looking at the July period, so June July period, you can see that the bond yield is coming down, but there’s actually the equity markets are arising. And then when you can see when the equity markets are coming up, Sorry, the bond markets coming up, you can see the equity markets coming off. Yeah. And that’s that inverse relationship that we’re saying there’s a flight, there’s a flight out of those markets into the bond market.

Michael Savy:

We can, and you know, I remember hearing many, many years ago the um, um, doing business or running a business pretty pretty basic. Buy something for a dollar, sell it for three. Yeah. These companies are faced with the same thing. Money or borrowing money or the cost of money is one of those expenses in our line item. Yeah. Um, so if we’re buying where we used to be buying it, you know, a 30 year bond at 1%, but now I’m buying it in at three, there’s only a few factors where if you have a strong enough business, you can pass on that cost. Yeah. But if you can’t pass on that cost, you as a business will have to absorb it. So that impacts some of the profits looking forward and that’s what the market’s trying to

Ben Kingsley:

Predict. Yeah. And they’re obviously saying all of those business with potentially high exposures of debt, you’re gonna be paying more for that debt because inflation’s going up and obviously that’s forcing up the interest rates. So you’re gonna be paying more for those on the bank bill. Swap rates is going up, so cost of money is going up and that’s a manufactured slowdown to try and get those businesses to not continue to lift inflation. That’s where we don’t want that inflation to be ingrained in the psychology of, of each economy, including the Australian economy as part of that. So I think that’s probably a really good segue into looking at the noise and the data. Cuz I wanna make sure we come back and talk about what are some of the things we need to be looking at when we’re thinking about the equity markets from a PE point of view and earnings versus those types things.

Ben Kingsley:

So we’ll come back for that. But let’s have a look at this. You know, what we’re seeing now, we’ve definitely, you can see here obviously while we’re having this conversation with you again, is because back in March of 2020 when Covid first hit, there was a lot of uncertainty and you can see consumer sentiment completely collapsing very similar to the way in which it did during the gfc and we’re now doubting a very similar level. It didn’t quite get, it was lower as that and we’re now on the improve. But anytime there’s uncertainty, and again, the reason why we wanted to sort of produce this, uh, update is because with uncertainty becomes, you know, lack of confidence. And so we know that when the RBA slows down their cash rate movements and the marketplace, you know, takes a breath, I suspect that sentiment will start to, to shift up. But in the other side there, just take us through the household income consumption story there.

Michael Savy:

Yeah. Look, um, as per the title of, of the main line there, there is a lot of noise. Um, if you look through the, cause, we track the data points on a month by month basis. The drop in sentiment also coincides with the noise picking up. You know, always front page news. I always tell a lot of my clients, the only time you see financial news on the front page of the Herald Sun is when there’s a crisis

Ben Kingsley:

When they’re losing money, losing money and when there’s a quick correction. Yeah.

Michael Savy:

So, and we, once we started seeing that the sentiment started coming off, we all anticipated that yes, it will have to increase at some point, but the sentiment dropping so significantly now, as you said, the sentiments drop similar to the gfc. Yep. But again, the thing that I would flag to our clients and what I hope to get the message to a lot of our clients, um, and those listening are when we have a lot of noise, it’s always important to refocus on what we can focus on. And you can see there in the savings, um, ratio that we’ve got there, unlike during the GFC mm-hmm. Because we are forced to save, um, our savings rate went through the roof. Yep.

Ben Kingsley:

We couldn’t spend the money

Michael Savy:

Because we couldn’t spend the money, but

Ben Kingsley:

Car was locked in the garage

Michael Savy:

Exactly. Over the last year or so. Um, depending where which state you’re in, we’ve been able to go out and spend some of that money, but we’re still naturally holding onto a slightly higher savings rate. Yep. Um, now you’ll see some data points, and this is what I mean by conflicting data. Some people will say that Yep. Average savings rates around about eight to 9%. But I look at it probably a shorter timeframe in my working career. Yeah. Um, um, the savings rate was probably more from what I’ve seen was around about four to 5%. Yep. I mean, at the start of my career, I remember we were in a dis savings rate where everyone, you know, the TV has an equity made, people were releasing equity. So,

Ben Kingsley:

And including in terms of debt to income ratios and so forth. They haven’t, they haven’t exploded. But the reality is also that we are taking on bigger debt because the value of assets so are worth more in the future.

Michael Savy:

Yeah. So the key takeaway from the savings ratio, but also from the perspective that we saved, we’ve got more money in the offset. Uh, we’ve paid down some of our debts and our interest rates that we’re paying now are still relatively cheaper than what it was let’s say in 2010. 10 11. Yeah. Um, so the household balance sheets actually a little stronger than what it was probably going in pre covid

Ben Kingsley:

And combine that with the unemployment story. Exactly. Exactly. Now we, we would expect the unemployment story to trickle up over

Michael Savy:

The next, it needs to trickle up in order to, for the RBA to get to their, to catch their flight. Yeah. They need the unemployment rate to go back up. Certainly not to the sevens rates that we saw, but I mean getting to a natural rate of somewhere between the four and 5%. Yep. And that was one of the mysterious things over the last 10 years come pre covid, you know, we, um, there was all this money going to the system, but wage inflation wasn’t going up and inflation wasn’t going up. Yeah. Because there was a bit of slack in the employment and it wasn’t until unemployment drop below four before we started seeing that. That’s true. So,

Ben Kingsley:

So let’s look at this next slide here. We’re also talking about, so I mean there’s obviously a couple of key messages that we want. Now I did say I promised to circle back around the opportunities that you might see in the market because I, I’ll start off by just sharing story. Michael was right in the sense that, you know, the, the noise that we hear in the media and in, in terms of what’s happening, especially on those big correction days, you know, the market lost $60 billion or blah blah blah, blah, blah. If you are in a situation where your circumstances aren’t any different, then there’s nothing to see here. I mean, just look at the share price accumulation indices. There you can see that long term trend. We did see obviously the correction that we saw during the GFC in there as well. And we are now seeing, you know, where that trend is going.

Ben Kingsley:

So I use the great Benjamin Graham uh, quote, which is around that. In the short term, when we are hearing all this noise, it’s only natural to feel a little bit uneasy, uncertain about that type of thing cuz that’s, that’s what’s happening now. Benjamin Graham used to say that the share market in the short term was a voting machine, but in the long term it was a weighing machine. And what you’re seeing there in those longer term sort of, you know, several decades that we’re looking at there or two decades that we’re looking at, is you can see that’s the weighing machine. So if your situation is currently where it’s at, it really is about sticking to your plan. And coming back to your point when you, we are obviously looking at indices there, where do, where do you focus in on finding that value that we were talking about in those individual companies? Uh,

Michael Savy:

Look, I, I guess, um, no different. I mean if you’ve read, um, Ben Graham or, or listened to the Warren Buffets and so on and so forth, I mean, um, in a period of high inflation, if it was prolonged, one of the best ways and and I use the analogy, um, and I think Warren Buffet quoted it, um, something along those lines as well, if, if we knew that inflation was persistently high. So if you are a wage earner, how do we go about beating inflation, increase our salary? So how do we beat that? We would study, do some education, do some training similar for companies. What we’re looking for are those, if we’re in an environment of prolonged inflation, then those that can generate good earnings growth over the long term. You can certainly buy some companies in the value space as well, um, at the moment, which will give you the immediate protection.

Michael Savy:

But that’s what we’re always looking to manage between the short term and the long term as well for our clients and in the portfolios. Um, but I guess one of the reasons why I’ve put these two charts together, um, is that that is really marrying the long term with the short term. So the short term elements of let’s look through our household information and as I said, there’s a lot of conflicting data. So people like myself, again, we get emails and emails and reports of datas and it’s our job to go through and have a look at it. And even for me it can be a little bit confusing and overwhelming. There’s

Ben Kingsley:

A lot of question marks, there’s a lot of uncertainty.

Michael Savy:

And that’s why I, even for myself, I’ve returned to first principles. What am I looking for? What is the data set? Block out some of that noise so you can focus what we’re trying to achieve for our clients and look at those inputs. Similar thing can happen for clients. So ignore the noise to some degree. Look at your household, uh, look at what debt levels you’ve got. Um, is it really gonna impact your, uh, your long term objective? And I guess that’s where I may circle back to, you know, in the scenario and using the car example where we had in earlier with the RBA driving. Yeah. But let’s bring it back to the same scenario. We’ve gotta get to the airport cause we’ve gotta flight to catch, but on this occasion it’s you driving, you and your family. Now the objective there, the flight on this occasion is your retirement or whatever goal that you’ve set.

Michael Savy:

Yep. Now if we have the same issues and you’re gonna face plenty of these issues, there’s not gonna be the last one. No. And if it’s your first one, Yeah. Hopefully <laugh>. Yeah. Um, but if you are on the road and you face those types of turmoil, uh, a bit to what you’re saying with regards to markets, the, even if you have the dodgy dashboard and you know the brakes, you might want to just slow and be more cautious. But if you are gonna pull over because you’re afraid of it, I can guarantee you one thing, you’re not gonna make the flight, No, you’re not gonna make your retirement objectives or whatever goal it is. So it’s being sensible, cautious, ignore the news, the noise, uh, ignore the noise,

Ben Kingsley:

Which is the news <laugh>. Yes.

Michael Savy:

Yeah. Ignore the, the noise and just focus on what is your objective, What is the place that you are in at the moment. Um, when you marry that with the longer term elements of this, Yeah. You can see the market will do what it needs to do. Um, and that’s why I put these two together. And, and, and a lot of this is, uh, a sentiment driven as well. So I’ve got in there, are we at the capitulation phase? Yeah. It’s one of those things where when the market’s going up, everything’s great, we will overpay and we want to pay more for certain assets. Yeah. Even though we don’t want to. On the flip side of things, when things are, uh, a bit like what we’re at now, a lot of noise, a lot of concern, that same asset doesn’t look as attractive. But again, the job that we do, do the look through, Yeah. You might find a company that’s still growing in earnings, expanding their market and footprint still got growth targets for next year, but yet the share price is dropped by 50%. So the question is what do we do? And

Ben Kingsley:

Well, and I think that’s a really good reminder. I mean, as part of the work that you do and the team does, is to look for those types of opportunities. I mean, earning per share. And as you say, what PE ratios are definitely going down because asset they were using, all the share prices are going down, but there are businesses out there that, that are bucking those trends. And, and during these cyclical stages, we’ve also gotta remember, you know, there’s an ageing population. So there’s gonna be health stocks that are also gonna be, you know, perform well. We also know when people put their hands in their pocket on discretionary spending and then start to look at the essential spending, those types of business are potentially gonna go okay. And then delivering still a good yield return. So it is gonna be a case by case basis for each household.

Ben Kingsley:

In terms of, for me, it’s almost like, well I’ve still got another 10 years to wait, so I’m not, I’m not too fussed about where the market’s at today. I, I’m not gonna change many of my positions. I’m playing the long game as part of that particular story. But if you are unsure, um, there’s a couple of things you can do if you, if you do know, if you do have a plan, my recommendation is don’t get distracted by the noise. Don’t get distracted by what your friends and, and that, that are doing as well. Just talk to your professional advisor, make sure if there is any concerns you have, reach out to them. But if you’ve recently done a review and, and your advisor’s not reaching out to you normally that’s the case of we, you know, we’re gonna play that long game. As part of that story, we obviously, uh, are passionate about educating you. So I do do an economic update, um, once a month as part of the RBA announcement. Um, you know, I’ve been talking about Jerome Powell’s commentary, um, recently around he wants to get in front of inflation now because we all know that if it, if it races on, um, it’s going to be harder landing. Um, and so we we’re seeing again, not only Jerome Powell, but all the

Michael Savy:

Others, Don and I guess for those who, um, here at least were lucky and we’re in a, um, you know, first ward country developed world and inflation at these levels. Some my parents in their generation would seem slightly higher inflation, um, to acknowledge why it’s such an issue. I mean, the problem we’ve rampant inflation, hopefully, fingers crossed we never get to those positions. If you look at places like Zimbabwe one point or in Venezuela where inflation got so rampant because the geopolitical, geopolitical situations where they’re literally taking monetary notes and making hand baskets out of them. Yes. So that’s the worst case scenario. Well,

Ben Kingsley:

We, and we’ve never seen that happen in a developed world. That’s right. Like in a developer economy where again, there’s, there’s strong geopolitical, good governance systems, low corruption, those sort things. It, it rarely happens. It’s usually a, a, a result of, you know, you know, sort of very, very difficult geopolitical situations in those countries. So I, I can’t think of any demonstrations of that happening. So let’s close this out. I mean, obviously there’s a couple of really important points that we wanted to get to. Uh, Michael’s analogy with the car is really important for you and that is you are driving the car, you know what your destination’s going to be in terms of your plan, your strategy, so maintain that strategy. You can see in some of the slides that we’ve put in front of you today that we do know that there’s good savings, household buffer savings.

Ben Kingsley:

You can see also in the debt to, uh, credit your income ratio, household credit to income ratios. There, there’s a lot of those savings when you look at offsets. So that is not necessarily outta control that some media outlets might claim that those types of things happening and just stay calm, um, you know, reach out to your professional advisor. Um, if you haven’t working with one and you want to, you know, uh, assess your current situation, um, I wouldn’t be putting any panic on, there’s no need to, to basically, you know, make any rash decisions. Yeah, yeah. In a market like we’ve

Michael Savy:

Got. Absolutely. Cause I mean the, the clients that have worked with the property wealth plan and even within the financial plan when we’re doing these long term modelings for clients and building their strategies, we usually build in buffers. Yeah. You know, two and a half, 2% on interest rates. Even though, you know, two years ago you were paying 1.9. Yeah. We would certainly be taking, um, putting in buffers and using long term reversion to mean numbers.

Ben Kingsley:

So, well we know in the platform, in our more platform that there’s billions of dollars in cash, over $6 billion in cash last time I looked in terms of households. So that just gives you some indication. So as we rounded out, just remember, um, if you want to continue to build your knowledge in this space, um, talk to your trusted advisor as part of that particular story. Um, listen to our economic updates. Um, if the situation was to deteriorate further, you’ll be hearing from us, um, in terms of further updates and it’s okay to fill this unease because that’s, it’s not what you do all the time. We have obviously been through several of these cycles, so that’s a natural feeling. It’s just about how you then respond to that. And we are sort of saying just remain calm. Um, reach out if you need any professional help in regards to that.

Ben Kingsley:

Um, and, you know, basically go forward and conquer. I mean this is all about lifestyle by design, creating that financial piece. What we, what we see the horror stories of people who have exited out of the market places. In other words, they’ve pulled over the side, pulled over, they’ve got off. Coming back to Warren Buffet’s statement before about earning more income. If you’re not earning more income or can’t get a higher paying job, make sure your money’s working harder for you. And if you’re out of the game and you’re sitting on the sidelines, you might be thinking you’re protecting that money. But we do know over time that there has been strong evidence of the biggest, you know, biggest performing days in the market will materially impact your overall returns. So if you are not in the market, you’re not gonna get those upsides. Yes, you are also gonna get some of those downsides, but you can see referring back to the graph, the trend is your friend over the long term, let that money do its magical compounding story.

Ben Kingsley:

Pick those right companies, get those right investments. You don’t have to be just invested in the overall indecision. You can also, you know, pick the eyes out of those particular types of businesses. And that’s a boutique strategy. Um, which is effective for some, um, may not be wise for others, but we’ll just basically, um, see how it plays out. So thank you again for watching us update and hanging around to the very end. Uh, you can get more details from us, um, in the link below in terms of learning a little bit more about this. We also send out a, a regular newsletter, um, that’ll be coming out to you with further updates from time to time. So thanks for watching. And remember that knowledge is empowering, but only if you act on it and.