Be Global, Be Different, Get Out of Your Own Way

HOSTS Alec Renehan & Bryce Leske|15 January, 2020

Meet your hosts

  • Alec Renehan

    Alec developed an interest in investing after realising he was spending all that he was earning. Investing became his form of 'forced saving'. While his first investment, Slater and Gordon (SGH), was a resounding failure, he learnt a lot from that experience. He hopes to share those lessons amongst others through the podcast and help people realise that if he can make money investing, anyone can.
  • Bryce Leske

    Bryce has had an interest in the stock market since his parents encouraged him to save 50c a fortnight from the age of 5. Once he had saved $500 he bought his first stock - BKI - a Listed Investment Company (LIC), and since then hasn't stopped. He hopes that Equity Mates can help make investing understandable and accessible. He loves the Essendon Football Club, and lives in Sydney.

You’ve made it to the end of Get Started Investing. We hope this series has helped you get started on your investing journey.

In this final episode we are closing out the series by wrapping up the key themes and sharing some advice we have collected while doing the podcast. Just because the series has come to an end, doesn’t mean your listening to the Equity Mates team has to. Come across to the Equity Mates Investing Podcast and continue your journey. We speak to experts, break down key concepts and discuss our own personal investing journeys. Investing is a journey best shared. Being able to talk about concepts and ideas is useful and motivating. The Equity Mates podcast and Equity Mates community is full of like-minded people looking to share their investing journey. Most importantly, good luck on your investing journey. The stock market has been history’s greatest wealth creator and getting started investing can change your life. Whether it is retiring early, reducing reliance on your paycheque or upgrading your lifestyle – making the right decisions now can help you get there.

In this episode you will learn:

  • Three key messages we learnt from Patrick O’Shaughnessy:
  • 1. Go Global – make sure you look outside Australia. The biggest share market in the world is the US; get involved
  • 2. Be Different – don’t always follow the crowd. For good returns, consider trying to be a bit different; rather than just ASX200 index, consider one that is for growth, or momentum, or emerging markets; having a mix is important
  • 3. Get Out Of Your Own Way – automate what you can, be consistent; take the emotion out of buying and selling

Stocks and resources discussed:

• Millennial Money by Patrick O’Shaughnessy

Want more? Subscribe to Equity Mates Investing Podcast, social media channels, Thought Starters mailing list and more.

Bryce: [00:00:32] Welcome to get started, investing a series of podcasts to help you on your investing journey. This is for anyone who wants to start investing but is really unsure where to start. Our aim is to make the markets accessible for you. My name is Bryce. And as always, I am joined by my equity buddy Ren. How's it going? [00:00:49][17.7]

Alec: [00:00:50] Very good, Bryce. Episode 12. We made it to the listeners who are listening to this. Made it. Well done, everyone. Good hustle. [00:01:00][10.0]

Bryce: [00:01:01] Well done. Great hustle around. Yes. This is our final episode in our series. Get started investing with equity mates. What a journey it has been. I hope we have been able to break down many of the barriers that we faced as investors early on in our journey and that we know many others to face. But by all means, this is not the end. Investing is a lifelong journey. It is just the end of the beginning. That's correct, Ren. So by now we hope that I guess everyone is up and running or as up and running as they can. Day drink is ready and ready to be really stretching the quads, making sure that loose and limber they get to run a really good race in the near future. Absolutely Ren. [00:01:41][40.3]

Bryce: [00:01:41] So look, today we want to recap, I guess, on most of what we have discussed. We'll do that at the end. But there are a couple of sort of key lessons that we want to finish with. And these came from actually one of the books that we've read along the way called Melonie or Money. Terrible title, great Bort, terrible title, great book, Millennial Money. And it's all about investing as a millennial and the power that the stock market can give a millennial and making the most of it as early as possible. And they are sort of three. Who is that? It discusses which is Bago. It will be different and get out of your own way. So we thought it would be a great way to sort of recap this whole series off. You know, we've spoken about a lot of the basics, but this really sort of frames, I guess, the way that you should think about your overall investing journey as a millennial or even if you're starting a bit later on in life. These are still some very important lessons and they really resonated with us Ren. So be different. Go global. Get out of your own way. Yes. Let's start with be global. [00:02:42][60.9]

Alec: [00:02:43] Okay. So, I mean, it's pretty self-explanatory. It's all there. And I think we touched on it on an earlier episode. But it's really an important lesson to nail home. Australia, America, UK, whatever country you're listening to for this from you are just one part of a global opportunity set of investing. I think in America you're fifty one percent of the market in Australia here where two percent of the global market, the UK, I think is around 10 percent. You're limiting your opportunity set if you're only investing in one country. There is so many good companies across the world doing so many innovative and interesting things, and it is fascinating to learn about them. Why would you ever just limit yourself just to the returns that can be earned in one country and Ren? [00:03:34][50.8]

Bryce: [00:03:34] It has never been easier to access global markets than it is today. When you and I both started our investing journey five or six years ago or whenever it was, it was still reasonably difficult to get access cheaply and efficiently to markets all around the world. But with the creation of the ETF and with all these micro financing ups and more competition in the market, it's now a lot cheaper and a lot easier to access global markets. So don't be limited in your thinking to investing just in your home country. Opportunities are endless when it comes to investing around the globe. [00:04:06][32.0]

Alec: [00:04:07] That's it. It's never been a better time to be an investor to appropriate a former Australian prime minister's line. Yeah. [00:04:14][7.1]

Bryce: [00:04:14] So, look, I think when it comes to that Ren, I just want to tack on the end that that involves, I guess, tailoring where you're getting information from as well. So don't just stick with your local home paper. Don't stick with reading just domestically. You're not going to find opportunities. It's all about being, I guess, across as many of the markets as you can. So save a few times in your bookmarks or whatever it may be, read widely, read globally, and you'll be surprised how you can start tying a lot of it altogether. So be different. [00:04:42][27.7]

Alec: [00:04:42] Ren be different. Yes. Yes. Everyone is themselves. Yes, everyone is different. So importantly, in investing, don't follow the crowd. Yeah. Yeah. If everyone is investing in the same thing, the price of that becomes more expensive. And if the price is more expensive, the returns you can get are less. So there is value in forging a different path and investing in looking in nooks and crannies of the world that not the majority of people are looking in. And in investing, there are so many companies, so many opportunities that no one can understand everything. But it seems that a lot of investors these days look at the big end of town. You know, the 200 biggest companies in Australia, the 500 biggest. Companies in America. And you can understand why that happens. It's because they are making the most money. They capture the biggest headlines. A lot of the times they are the biggest employers that the biggest mainstays in the country's economy. And they capture people's imagination. And for investors there, an obvious place to start. And they're obviously front of mind. But as you develop your investing journey, there is a lot of opportunity outside the big end of town. So the lesson is the same as the first one. In a way, it's to read widely and keep an open mind and just look for opportunities that maybe aren't getting in the newspaper or aren't getting the front page of read or aren't getting wherever you are first going for investing information because there's plenty out there. [00:06:20][98.1]

Bryce: [00:06:21] Yeah. So some practical ways to do this. For example, you might be looking at using ATSI to enter the market and you might want to build your portfolio around a number of different. Yes, it is fine to go with the ASX 200, S&P 500, but as Ren alluded to, a lot of people go down that route, which is perfectly fine to build some solid foundations and get access to some of the biggest companies out there. But if you want to start generating decent returns that are above market return, you need to start thinking differently. And you can see, for example, there are a number of ETF that focus on growth companies or we've discussed momentum as a investing strategy and their ETF that centre around momentum. There are ETF that look at emerging markets. So there are a number of eightieths and indexes out there that will allow you to be different, separate yourself from the crowd a little and hopefully give you returns that are above current market returns. So combine that with Go Global and you're really starting to set yourself up with a portfolio that is going to generate some solid returns, hopefully over a number of years, 100 percent. [00:07:28][67.4]

Alec: [00:07:29] The third lesson. Yes. [00:07:30][1.3]

Bryce: [00:07:31] Third lesson, Ren get out of your own way. Yeah. Interesting. [00:07:34][2.9]

Alec: [00:07:34] Yeah, it's an important one. One thing that we haven't probably touched a lot on in this series is the emotion of investing. Yes, it is a highly emotional when you're dealing with your own money and you're wearing risk with your own money. It is a difficult decision to decide to put money to work. It's also a rational decision. It's irrational not to try and get the returns, but to take any emotion out of it. To take the agonising over individual choices out of it is a really important way to systematise what you're doing and make it really consistent over a long period of time. So there are a number of ways that you can take the emotion out of it. John, kick us off with some things that you do share Ren. [00:08:21][47.1]

Bryce: [00:08:22] So you're right. We haven't really touched on emotion that much. I am still learning highly emotional, still learning to take emotion out of my investing. I got burnt very early on by being too emotional, thinking with my heart and probably too quickly. I got attached to stocks, didn't really think through it properly, and probably bought and sold at the wrong times and, you know, suffered the consequences. So I've learnt from that. And in line with what I was saying earlier about it being easier to invest globally, it's now becoming easier to automate your investing decisions. So I think for me, this is all around the automation side of things and in line with what you're saying about dollar cost averaging, if you can find products that allow you to consistently put money into a market, both consistent dollar amount and consistent time intervals without you having to think about it and it automatically comes out of your paycheque or whatever it may be. That is probably one of the best ways that you can get out of your own way. Now, if I to give some real life examples, there are some off market Vanguard funds that I'm invested in and they allow you to be pay into them minimum one hundred dollars as you please, straight out of your bank account. Now, that is a great way to set up, say, 100 bucks a week, 20 bucks a week, four hundred a month, whatever it may be. You can set that up and say, see you later and every week, whatever the interval, it will go in and buy at the price and away you go. Now, I don't do that for everything, but that's a practical example of how I take the emotion out of buying and selling for those particular products. Likewise, there are many micro financing apps available here in Australia. We've got the likes of Re's previously known as Acorns Over in America. Got Space Ship. If you're over in America, you've probably got Robin Hood and acorns as well. I'm not quite sure what you've got over in Europe, but similar sorts of apps where you can invest as little as five or ten dollars a week or whatever you want you wanted to do. And it will take it out of your spending account and invest in a bit of an allocation of stocks and bonds and cash and that sort of stuff. That's a great way as well of getting access to the markets and getting. Out of your own way. How do you sort of think about this one? [00:10:33][131.8]

Alec: [00:10:34] So I agree with you. I think part of getting out of your own way and is automating what you do. [00:10:39][5.1]

Alec: [00:10:40] So I automatically every time I get a paycheque, I put some aside into a investment account. And then in terms of what I'm buying, I try and have a plan ahead of time. You know, there's money sitting there. And then I. And so trying to make a decision then and there. I try and know what I want to buy ahead of time. Haven't written down somewhere. And then just execute the plan when I've got the money to do it. Similarly, when I'm in a trade. So I've got a few holdings now. I don't watch them every day. I don't have a watch list set up on my phone. That has, you know, the. All the stocks that I own or anything like that. I try and take the emotion out of it by trying to keep my focus offer. And then at a set interval, maybe every quarter or something, I'll try and have a good look and say what's happened. [00:11:30][50.6]

Bryce: [00:11:31] Yeah, that's yeah, that's an interesting point. And I guess it sums up everything that we've spoken about, you know, not worrying about when the market drops, having that long term goal, having that long term focus. If a few do have that stock watchlist on your phone every day, you are much, much more susceptible to being driven by emotions of the market rather than taking away that noise and being driven by what your initial goals were. [00:11:54][22.6]

Alec: [00:11:54] Yeah, the analogy that is often written about in books is imagine having owning a house and every day having someone knock on your door and saying, this is how much I buy your house for you. Yeah, the temptation to sell is so much higher when every day someone is banging on your door and giving you the opportunity to sell. And that is what the share market is. It is literally the investing universe quoting you a price at which they'll take your assets off you, which is great. It means that it has never been easier to buy and sell anything. But it also means the temptation is there all the time and it's constantly front of mind if you're constantly watching the market. And so for me, knowing my personality and my temperament, I just think I'd remove that temptation, keep it out of my mind, and that helps me get out of my own way and invest for the long term. [00:12:45][50.8]

Bryce: [00:12:46] Nice. Now it's good. So I think that generally covers the gist of going global, being different and getting out of your own way. [00:12:54][8.3]

Bryce: [00:12:54] Three, I think guiding principles that I really resonate with. And they're very practical in terms of putting into your own portfolio. We've given many examples of how you can do each of them throughout the last few episodes. So if there's anything you kind of want to write down and start developing a strategy around there, some very broad guiding principles for, I guess, younger investors to start building a portfolio. [00:13:18][23.9]

Alec: [00:13:19] Yeah. There's one other fact in that book. Yeah, it's a good book. I highly recommend it. Yeah. Over half of the retirees in America retire with less than fifty thousand dollars, which is just unbelievable when you think about trying to retire. [00:13:31][11.9]

Alec: [00:13:32] And the biggest thing you can do to get yourself in a position to not be in that boat, to not have enough savings when you retire, is to invest early and invest, often getting the right saving habits now and access the market now. And we all sort of we all know that. But it's another thing to actually do it. Keep that in mind. And hopefully this series has helped people get there. If you need another little push, I highly recommend reading the book. Yeah, absolutely. [00:13:58][25.5]

Bryce: [00:13:58] Great book. And that is a staggering figure. And fifty thousand dollars when you're hitting retirement. I honestly can't imagine how people plan to survive on that sort of money for their retirement. Mike, unbelievable. So I guess if anything, we hopefully have highlighted the fact that the stock market is an incredibly powerful tool to help you build wealth over a long period of time. And not just small amounts of wealth like you can build considerable sized wealth in large portfolios. As you said, Ren, if you're consistent, start early and just get in and have a crack. So Ren worth sort of just wrapping up and taking note of what we have discussed over the last sort of 11 episodes. We've we've talked about a lot. There's been a lot to absorb, a lot to take in. By all means. We haven't covered everything. We hope that we've been able to cover, I guess, a lot of the main barriers that we certainly faced when we started out investing some of the questions that we really had unanswered from some of the information that we were finding. So we started the series covering why we invest in the power of the stock market. And then we had to look at some of the tips and tricks for saving for our first investment. Some of the basics around the share market stocks, the styles of investing. And then we had to look at the assets and money, stocks and bonds and that sort of stuff. [00:15:16][78.3]

Alec: [00:15:17] After we covered those basics, we then had to look at what's the actual process of getting involved in the market. And the first thing you need to worry about, the first decision that every investor makes is finding a broker. [00:15:27][10.6]

Alec: [00:15:28] And I talked about some of the factors that go into that decision and what you should look for. And then it was all about getting started. So a good place to start is looking at broad market indexes. It means you don't have to pick a stock from day one. It allows you to understand the mechanisms of the market and get exposure to the market without having to make that really difficult stockpicking decision. From there, we opened it up into. All right. Now, what do you need to understand to really start picking your own stocks? The first thing is jargon. You need to understand the jargon. And we spoke about some key ones. We talked about our official no jargon policy or equity markets. I think the main thing we spoke about, if you come across jargon that you don't understand, what are some tools and tricks to understand what is being said? Then we spoke about how you you find investing information a really common question. We got an equity market because it is just a firehose of information out there to borrow something from one of our guests. There is so much information out there and you've got to find a way to distil it. And then once you do start distilling that information, once you start doing your own research, the question then becomes, how do you use that information to find good companies? What are the hallmarks of good companies and what are the hallmarks of companies that will make money over the long term? Yeah. And then once you started picking stocks, once you've identified some good stocks, then it's the mechanics of buying and selling your first stock. When do you buy? What's the right time to buy? How much do you buy? When should you sell? And some things around that. And then once you've gone from owning one stock to only multiple stocks, it's how do you build a portfolio? What do you allocate your money towards? And then we finished off with some tips around what we spoke about earlier today, not just looking at your home country, being global, doing things differently, don't always follow the crowd. And then finally, once it's all said and done, just get out of your own way. [00:17:17][109.1]

Bryce: [00:17:18] Yes, that's it. Get out of your own way. As we said right at the beginning of this series, investing is a lifelong journey. Even some of the best investors in the world. In fact, I would probably say most of the best investors in the world are still perfecting their craft day in, day out. It's an ever changing world out there. And one strategy does not always mean that it's a successful strategy. Day in, day out. So do not panic and think that you need to know everything from the get go. I think Ren and I are absolute living proof that. Syrian. You can start to learn the markets and it starts to become a bit more comfortable. The more that you go on your journey. So I think if there's anything we want you to take away from this series of all the things we've discussed, it is that there is no point in waiting around. Now is the time to get started. You don't need a lot of money to get started. There are many ways in which you can start accessing the market. It doesn't have to be sitting down and doing the arithmetic and finding, you know, the best stock out there. You can start by going through micro financing apps or whatever it may be. There's a myriad of ways that you can enter the market. I think just do it. That's probably the main key message around here. [00:18:25][67.3]

Alec: [00:18:25] No time to start like today. And the longer you're in the market, the more you'll you'll see the profound effects of compounding. [00:18:34][8.5]

Bryce: [00:18:35] Absolutely. So release into this series, if it's what you need to do, go out and read those five investing books or five hundred investing books. Whatever you need to do to feel like that, you're ready to take the plunge. But by all means, take the plunge whenever you can. You're never going to probably feel like now is the perfect time to do so. We encourage you once you have done that and once you've again finished this episode, come across and join us on Equity Mates Investing podcast as we continue to explore markets and stocks and continue on the journey of investing, along with many other members of the equity mates community. We've got a Facebook group up and running now. Equity Mates Discussion Group where you can ask all the investing questions that you want. Very welcoming community. Happy to answer anyone's questions on the show. We also have an Ask US Anything episode where once a month we dedicated an episode to answering all the questions that come in from the community. So hit us up at equity mates, dot com contacts at equity mates, dot com as well if you want to email us directly. [00:19:32][57.9]

Bryce: [00:19:33] And we are on all of our social feeds, so no excuse not to reach out if you have Ren doesn't answer any because he's too busy sorting out content, contentment and being the brains behind the whole thing. [00:19:46][12.6]

[00:19:46] But look, I think Ren we've had an awesome time doing this series. It's been a great experience for us to sort of recap on some of the challenges that we faced were a bit further down on our journey at the moment. And we're super excited that we're able to help as many other people access the markets as possible. By all means. [00:20:03][17.1]

Alec: [00:20:04] We started with this and let's end with it. The stock market is the greatest wealth creating machine the world has ever seen. Nothing has created more wealth for more people across history. You would be a mistake to miss out on it. So join us. Listen to this series again. Join us with the podcast. But even if you never wanna hear our voice again, just get started. [00:20:23][19.3]

[00:20:25] Thanks for listening to get started investing. A production of acclimates media. Please remember that everything you hear and get started investing is general advice. [00:20:33][7.4]

[00:20:33] Only the content has been prepared without knowing your personal objectives, specific financial circumstances or goals. The host of Get Started Investing may maintain positions in the companies discussed before considering any investment. Please read the product disclosure statement and consider speaking to a licenced financial. [00:20:33][0.0]

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