How to survive the 2022 stock market crash

Maddy: [00:00:19] Hello and welcome to youre in good company! A podcast that makes investing accessible for everyone. I'm Maddy and as always, I'm in some very good company with my co-host Sophie. 

Sophie: [00:00:30] We're back. Happy New Year! Happy season three! New season. 

Maddy: [00:00:35] New intro! Yeah, thanks. What are your thoughts? Let me run it past you. 

Sophie: [00:00:40] Check it out. Now I like it. We're making investing accessible for everyone. It works. 

Maddy: [00:00:46] Coming up on today's episode, why or why am I stocks doing so badly at the moment 

Sophie: [00:00:52] and is now really a good time to be investing? I feel like that's a question we're seeing like a lot of media. 

Maddy: [00:00:59] And as always, we share some insight into the stocks that we have our eyes on at the moment and are adding to our growing watch list. 

Sophie: [00:01:06] I must admit a bit of a teaser. I don't add a stock. I add something different, 

Maddy: [00:01:11] so you'll have to wait till the end of the episode to hear that. But before we go any further. How was your summer? 

Sophie: [00:01:18] the December break isn't really a holiday. Like, I feel like it's so nice. It's good weather. But like there's so many events that you have to attend 70 family members. It's a great time of year. It's definitely my favourite time of year, but I didn't really relax. 

Maddy: [00:01:36] How is yours? I feel like I actually did relax. Oh, okay, yeah, that's good. But my biggest concern was that the summer was going to go really quickly, and I wasn't going to feel like I had a break. But I actually feel I got a break.

Sophie: [00:01:46] I do that every day. I'm like, Oh, now I've only got nine days. Eight days. Seven. 

Maddy: [00:01:51] That's why I wasn't relaxing yet, 

Sophie: [00:01:54] but I feel like we were so switched off this summer. Regardless, I was reading. I wasn't on my phone as much, and now you've come back into the swing of things and my portfolio looks really upset. 

Maddy: [00:02:05] It's pretty red. I know I couldn't actually believe it, to be honest. I feel like I didn't listen to any news over summer. I completely switched off, like you said, stopped listening to my regular podcasts and then came back this week and I was like, What is going on?

Sophie: [00:02:17] You know, the funny thing, it's like not even the reading, the news that told me that like, there's going to be some stock issues which you're going to jump into. But it was all, everything on social media. It was tik-tok. Oh my goodness, I know all the names being like crying about your stock market. I was like, Wait, what's happened on what's happened religiously? 

Maddy: [00:02:32] I think one of my favourite was Dollars is Tik-tok. That I watch, you know, is like crypto investors. And it was like, Is this your first time? Yes, really related to that? No, not my first time. 

Sophie: [00:02:43] So let's jump into it. Then what is happening to the stock market at the moment? 

Maddy: [00:02:49] Yeah, we started having this conversation this week. We were messaging each other talking about what is going on, why are our stocks down? And then I feel like we really had to stop ourselves. In fact, no. Let's look into this and then talk about this on Mac, because for so many of our community, people have started investing pretty recently. And I think for a lot of us, this is kind of the first real crash that we've experienced a festival downturn in portfolios.

Sophie: [00:03:12] Yeah. So let's take it back a bit. Maybe so what's happening? The moment is pretty much the Nasdaq, which is an exchange in the US, has fallen more than 10 percent since since its peak in November last year. Ouch. Ouch. And technically, this means that the Nasdaq is officially in what they call a correction. Yes.

Maddy: [00:03:31] So I actually had to look up what a correction was, unaware that I'm like, OK, I know what it means. Like what? I don't know what it actually means. What does it technically mean? So a correction is simply a drop of 10 percent or more for any type of asset, which is what we've seen with the Nasdaq. 

Sophie: [00:03:47] But it also can be for a correction could be for like an individual stock or an individual bonds like if you own a stock and it's dropped more than 10 percent, then technically that specific stocks also in a correction. Yes. 

Maddy: [00:03:58] So I did find a stock that I thought was quite interesting, according to a report from CNBC and Goldman Sachs. The average correction for the S&P 500 throughout history has lasted four months on average. Right. And it's fallen about 13 percent before recovering. So I actually just saw that was quite good because I think one of the biggest things that I've been kind of thinking about at the moment and not that that this meant, you know, this is an average timeframe. So it doesn't mean that this is necessarily going to be the case for this one. But I'm like, How long is this going to last? Yeah, I want to buy the dip and I don't know where it is. 

Sophie: [00:04:32] I also feel like because, you know, we are also new to investing like we've been investing for what, maybe two or three years now. And besides kind of Covid times, we haven't really experienced this kind of crash before, but it was nice to say in the research that we did is that this has happened before. This is not a new concept. It's happened. The last time it happened was, you know, over 20 years ago when the tech bubble burst, which sounds like a lot of jargon, but really, it's just about when you know, the internet kind. Have erupted and everyone was putting all their money into internet stocks and then that burst. But it's kind of comforting to know that this is this is a part of the, I guess, volatility of the stock market. 

Maddy: [00:05:10] Yeah, it's quite interesting. I was writing that often particular sectors or industries that drive the correction, and I think in this case, it seems very tech focussed on the Nasdaq, the exchange in the U.S. that has dropped so much. That is a very tech dominated exchange.

Sophie: [00:05:24] Because it holds the likes of like, you know, Facebook, Apple, yes, but Tesla, all of those big tech companies. So if they are going down, it's going to drag the index pretty quickly. Ouch.

Maddy: [00:05:34] Speaking of, I'm keen to hear like, what are your worst performing stocks at the moment? Like what percentage drops have you experienced? 

Sophie: [00:05:42] So unfortunately, my Sonos No, which was if you haven't listened to our thesis, I go on and on about how amazing Sonos. 

Maddy: [00:05:51] I mean, it did pretty well

Sophie: [00:05:52] and it will in the future. I have 

Maddy: [00:05:55] a long term, you know, but 

Sophie: [00:05:56] that that's been down about 17 percent. Just note, this is at time of recording whenever you're listening. This might vary, but about 17 percent in the past five days or so. 

Maddy: [00:06:06] Tesla Yeah, she's down.

Sophie: [00:06:09] She's down. But also, Tesla is a bit of a funny run like Tesla. So volatile it is. But it is really my tech part of my portfolio, which is down at the moment. 

Maddy: [00:06:18] What about you? Mine is even worse. Oh, got to say, but I will preface this by like I've been resenting my age. Yes, recently and putting more money into tech stocks and days are the ones that are now really down. So I recently bought ZIP. its down 20%. 

Sophie: [00:06:34] I didn't know you bought it. 

Maddy: [00:06:35] Interesting. I bought Megaport, down 28 percent. 

Sophie: [00:06:39] Still believe in Megaport

Maddy: [00:06:40] Don't worry about that one. And here is the real kicker My Ark ETF Tiger Ark is down 38 percent since I bought. It's not funny. I just one day you have any regrets. If you don't laugh, you cry. Exactly. And long term investing like we said. 

Sophie: [00:06:58] Yeah, and I think that's the point of this is like to overall contextualise. Some of our stocks are down. But if you are diversifying and you're investing for the long term, this is just a correction that's happening and that's normal in the market.

Maddy: [00:07:12] And also, I'm pretty proud to say that my overall portfolio is still up by like a pretty decent amount. It's just like maybe the ones I've invested in. All right, so we haven't done so well.

Sophie: [00:07:21] So call that to you guys. We want you to jump into our Facebook community and we're going to make a thread. We want to know your worst performing stocks at the moment.

Maddy: [00:07:29] I know I find it so entertaining. It's like we're losing money. It's not, you know, unless we sell

Sophie: [00:07:34] we all need a comfort each other. 

Maddy: [00:07:36] So we know what has happened. Our portfolios are down. The tech stocks in particular, are hurting. But why is this happening? Why is this the case? 

Sophie: [00:07:46] So there's definitely a couple of reasons. It's not just like a one thing is happening. The first is definitely rising inflation, which leads to rising interest rates, which let's break that down. Start with the inflation. 

Maddy: [00:08:01] Yes. First things first, inflation has risen to seven percent in the US in the December quarter, which for context, the target inflation rate in Australia is like two to three percent. So seven is extremely high. And that's like that is the rate at which prices are increasing. Yes, it's pretty hectic 

Sophie: [00:08:17] and it's everyday consumer goods. It's the things that you're spending on. But when inflation rises like that, usually the Federal Reserve in America will step in and try and do like certain types of policies, monetary or fiscal policy that will bring inflation back down. And one of the ways that they do this is increasing interest rates. So if there's increasing interest rates mats, what does that mean for the stock market? 

Maddy: [00:08:42] So basically, we've had really low interest rates for quite a while now because the government's been trying to encourage people to like spend throughout the pandemic. So basically money has been super cheap. So for example, if you were going for a home loan like you could get money for your house for really cheap and you wouldn't have to pay very much interest on your repayments. But now, if interest rates rise, it means that money isn't so cheap anymore. So if you take out a mortgage, you'll have to pay more interest back on your loan.

Sophie: [00:09:11] And if you think about it, I guess the impact on the stock market there is that it is less money in circulation because people are being more conservative. It means that there's less cash going into the into the stock market. And the other part of the interest rate, I guess, is that if they're really high, then you're going to be wanting to put your money in the bank because if you could make interest on your bank account, it's like so safe. And that's people going to put money in the bank. They are going to be putting money in the stock market. Yeah. So it's like kind of combination. 

Maddy: [00:09:36] Yeah, I was actually chatting to my grandma about this, and she was telling me that I think it was like maybe in the nineties or late 80s, interest rates in Australia hit an all time high, like 17 percent. Yeah, you imagine if you could put money in the bank account very safe and earn 17 percent. 

Sophie: [00:09:53] I actually do remember this because I feel like my parents were maybe at the stage where they were buying their first house. Interests, yeah, and interest rates were at that level, so if you're getting a loan that has and paying 17 percent interest, 

Maddy: [00:10:08] no thank you. It's good. So this is all been happening in the U.S., but I guess it's also quite relevant to talk about what's sort of flowing through in Australia because we're also taking the Australian stock market hit by this. 

Sophie: [00:10:20] Yeah, because I guess you can't expect that we all have these, you know, effects from Covid and the ramifications from that and then for us not to have any economic consequences as well. 

Maddy: [00:10:31] Yeah, exactly right. So actually, on the day that this episode is released, the RBA will meet and they will make an announcement around interest rates. So we're not sure what's going to happen there. Experts are saying that they're probably not going to rise until later in this year. But we did see last week the Australian Bureau of Statistics come out and say that inflation has risen to three point five per cent. 

Sophie: [00:10:51] So pretty much that just means that everything's getting more expensive. 

Maddy: [00:10:54] You might have noticed your petrol costs are up at the moment 

Sophie: [00:10:57] and potentially also your groceries and all of your household consumption goods. 

Maddy: [00:11:02] So to recap, one of the first reasons that we're saying the stock market crashing at the moment is because of the announcements that have been coming out around inflation. 

Sophie: [00:11:11] It's also really important to note that this is not just unique to the US or Australia, it's happening around the world. We are probably going to be seeing it across Europe as well. So it's not just the Nasdaq or the ASX, but it's likely going to be a global trend that we will continue to see in the coming months. 

Maddy: [00:11:26] We are going to take a quick break for our sponsors, but we'll be right back to chat more reasons why our stocks are down at the moment. 

Sophie: [00:11:35] So, Mads, I guess we kind of touched on like inflation, and I think that will really stems from the fact that we've had a really long period of Covid now what does it mean? What are we trying to 

Maddy: [00:11:46] fight a long

Sophie: [00:11:47] stint that two years? 

Maddy: [00:11:48] You imagine if we're in March 2020, you told us that we would still be talking about this and it would still be impacting our lives in our web of 2022. 

Sophie: [00:11:58] Actually, I actually had a conversation with someone at work and I was like, When do you think the so do you get Covid? Like what? Yeah. 

Maddy: [00:12:05] Oh, I don't want to think. Yeah. Hopefully, this is it. I'm I'm crossing my fingers. OK, let's hope. 

Sophie: [00:12:10] But no, we were just going to say that the reason why this inflationary pressures and fears have really gone up is because it really revolves around the supply chain. So Covid has impacted the supply chain a lot, meaning that there's less product or service in circulation. You know, it impacts in the service industry, humans because they can't go to work or in the product industry again, humans, because they can't manufacture products. 

Maddy: [00:12:32] Did you sell the stuff a couple of weeks ago about the chicken shortage? And I think it was KFC not having chicken? What? 

Sophie: [00:12:38] How does that? What happens 

Maddy: [00:12:39] there? Yeah, I think it was because like factories didn't have workers and my god, I chicken 

Sophie: [00:12:46] lower Kentucky Fried Chicken. But I guess it's it's actually just that if you don't have people being able to provide the product or service, then you have no supply and therefore prices go up. And that's what inflation is. And that's what we're seeing happening. 

Maddy: [00:12:59] Yeah. And I think people also still sort of bracing there being a little bit more cautious with their money because I mean, the year ahead still looks kind of uncertain.

Sophie: [00:13:06] I feel like the next five years. 

Maddy: [00:13:08] Not at this point. So we've got inflation under the belt. We know the impact that COVID has had. That is sort of leading to what is going on at the moment with the correction. But there is something else playing out in the US at the moment that is also having an impact. 

Sophie: [00:13:24] Yes, and that is quarterly earnings announcements or season, as some would call it, in the U.S. Yeah.

Maddy: [00:13:30] So this is basically just spare public companies announce their earnings and their results, and this normally happens four times a year. January, April, July and October.

Sophie: [00:13:41] Maybe we should do an episode about earnings seasons. I think we absolutely should fully explain them. Yeah, yeah, it's great idea. 

Maddy: [00:13:46] We'll just park that. So it's important to note that, I guess, regardless of correction or not and what's happening on at the moment, earnings season is often quite a volatile time because companies come out and they say, you know how they've been tracking and it might be better or worse and expectations. And they may also come out and sort of say, and this is what we're expecting for next quarter. Yeah. And for people who hold that stock, like if that's disappointing news, they might sell it or if it's better than expected, it might let them to buy it. 

Sophie: [00:14:16] Yeah. So it's a time where we say stocks go up and down regardless. So not to bring up inflation again, but we spoke about the tech industry, obviously, and we're kind of seeing really similar trends with the quarterly announcements that are coming out of some of these technology companies, and they're underperforming for various reasons. So I know that you added Netflix to our watch list, you know, either in season one or season two. Yeah, initially 

Maddy: [00:14:39] this I was very upset about because I pitched it and I thought it was such a good pitch and then I didn't invest in it and it did really well. And I was like, Oh, I should have known that I'm good and an incredible investor, duh. But now Netflix is down 24 percent after the company revealed that they had softer subscriber growth numbers in the last quarter. 

Sophie: [00:14:58] I actually cancelled my Netflix over summer. 

Maddy: [00:15:00] Great. So this is your fault. Thank you for that. So you actually didn't invest. 

Sophie: [00:15:05] I'm just I'm just a drop in the ocean. But this is interesting because it growth numbers or subscriber numbers has nothing to do with inflation or prices rising because it's a service, right? Like, it's not impacting necessarily. I don't know if it had any price hikes recently on not they

Maddy: [00:15:19] did, actually. 

Sophie: [00:15:20] Oh, so maybe that's what

Maddy: [00:15:21] interests me inflation again.

Sophie: [00:15:23] But it's it is interesting because it's not just the inflation part, it's also the quarterly earnings part. And then it kind of like it's that snowball effect. 

Maddy: [00:15:31] One hundred percent. I also remember I think I said this in the pitch that that Netflix share price often jumps around based on subscriber numbers. In the short term, you can be a little bit up and down when they say, like, Oh, I've had heaps of people when squid games comes out all like we've had people drop off.

Sophie: [00:15:47] I think a really important thing to note at the moment is if you are obviously saying stocks go down and there has been a quarterly report released to try and understand what's happened in that quarterly report, because if it's actually because of reasons other like other than inflation, it's still really good to understand that as an investor and not just make the assumption that like, oh, everything's crashed because it could change your conviction about it, it could keep you in the stock. But it's just a different point, like keeping them separate is important. Yeah, I [00:16:17][29.9]

Maddy: [00:16:17] think we spoke about this in episode six of our summer series and like reasons to sell. And I guess sort of keeping track of your portfolio. I think just understanding why the stock is moving can be super helpful because it can either be like a short term blip that you're comfortable with and you can you're happy to keep holding or you might even be buying up. Tunity, but on the converse, it might be something that's actually quite important to you that changes your thesis and actually might trigger you to reconsider your holding in that stock.

Sophie: [00:16:43] So I've looked at some of the reasons why this correction is happening, and I feel like now all I see on social media is like, What do I do about it? And my head's like, What do I do about it? 

Maddy: [00:16:54] I know I'm also I want to buy the dip, but when is it? 

Sophie: [00:16:57] And I'm also like, Don't take your portfolio, but then you're like, You need to look at your portfolio and work out how Daniel Stock's output in this episode. And I'm like, I'm like, Really? Do I have 

Maddy: [00:17:06] to? Well, one of my favourite things that I have seen on social media is a Warren Buffett quote, and it says, I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful. 

Sophie: [00:17:19] When you first told me you texted me this quote, I was like, What does that mean? But then someone did a diagram on Instagram, and that always really helps him. So for sure. But it's pretty much just that when everyone when everyone's greedy, like they're going at the stock market, it's quite bullish. People are putting in lots of money. They're buying it. They're like the top bit. 

Maddy: [00:17:38] Hire us in December last year. 

Sophie: [00:17:40] Yeah, buying into all the tech stocks. But when people are fearful as they are right now, there's a lot of fear. There's a lot of volatility. People are holding back a little bit. That could potentially potentially be a good time to buy. 

Maddy: [00:17:52] Yeah. And I think now is the perfect time to really go back to your strategy. You set yourself when you started out investing. For me, dollar cost averaging is one of the most obvious ones that comes to mind. I think when I think about back to like the start of Covid in March 2020 and I was very new investor. So although my stocks went down, I didn't really have that much in the stock market. So I was like, No, I'll just do what I owe. Like, You know what I said, I do, and I would keep dollar cost averaging in. And that strategy for that period has worked out really well for me. I have to say it's like a little bit scarier this time because my stakes in the stock market are a bit higher. But I think it's like going back to that point and remembering like sticking to your goals and sticking to your strategy that works for you. It's a good time to do it.

Sophie: [00:18:36] Well, let me just reiterate, because I feel like you've mentioned maybe like two times now in the past half now. Like when to buy the dip? Maybe just buy towards your strategy.

Maddy: [00:18:45] Maybe an hour. That's a very good point. I should not try and buy the dip. I should just stay consistent. 

Sophie: [00:18:50] I think the other one that you might hear about a lot and something we've discussed is that it's also a time to potentially find undervalued companies. So when the stocks are going down, it might be a time where stock actually becomes cheaper. I mean, the technical definition for undervalued is that the market price of the price you can buy it for, unlike your brokerage platform, is less than its intrinsic or its actual value that it could provide to society or based off its balance sheet or

Maddy: [00:19:19] whatever else, which I feel. I can seem like a pretty daunting task like I would love to find an undervalued stock, but how do I actually do that? I don't, and people dedicate like 

Sophie: [00:19:27] their whole careers to doing that. But really, when I thought about it, like a good link that I would make is to our summer series episode five, where we talk about some of the numbers and how we value companies. And one of those metrics that really stood out to me was the price to earnings ratio, which you spoke about Mads. And we're not going to go into much detail about it because you can go and listen to that episode. But you say that when you're valuing a company, if you look at that metric and compare it to the industry average or it's to its competitors, you can work out whether something's maybe undervalued or overvalued. So going and taking little steps like that and looking at maybe particular metrics will help you understand if something is undervalued or overvalued. [00:20:05][37.9]

Maddy: [00:20:06] Yeah, I think the other thing that I'm really trying to do at the moment and I mean, we just touched on it then when you telling me I should just stick to my strategy. Yeah, but it's like really checking in with myself actually is like quite a new investor. I feel like you've been influencing me a little bit with what? So when I started out investing, I was like, very like pro ETFs. Safe, good. And then you slash like doing this podcast and like speaking to really interesting guests and hearing their watch list additions. I've gotten like very into the growth stocks. 

Sophie: [00:20:39] Don't you go blaming your radio portfolio on me

Maddy: [00:20:43] because that's my risk profile. Yeah. Look, I think I have been neglecting my ETF a little bit and you know, we've been in this like tech bubble. So to say, you know, I've seen the correction in the Nasdaq and I think I've been there since I started investing. I've been saying all these tech stocks go off and do really well, and I've been a bit sucked into it if I'm honest. Yeah, you know, I haven't been sticking to the percentages in my portfolio that I said I wanted to. With ETFs vs. individual stocks, I've definitely been going a bit more risky. Yeah. And I think now is the perfect time to actually be like, OK, I know I'm new to this and I know that things have been really nice for a little while now. But actually, it isn't necessarily always this good in, you know, in one industry or sector. 

Sophie: [00:21:28] Yeah, it's a good lesson for us, for people that haven't really experienced a correction before that. That is why a strategy. Is so important, people don't just say that, you know, and we're learning to like we've been saying that, but maybe we didn't really understand the capacity of it, but that's why it's so important to stick to a strategy because the stock market can go up and down. 

Maddy: [00:21:48] We have this awesome thread in our Facebook group at the moment and someone posted saying, You know, this is the first time like my stocks are really down. Like, what's going on in some of the comments were so good I was laughing. It was like, Think of it as this New Year's sale on shares. 

Sophie: [00:22:03] My favourite was if you bought a house and prices were down. Would you sell it? Point blank check again in 20 years. 

Maddy: [00:22:11] Yeah, I wish it was like lightening all the comments of like, this is like, yes, 

Sophie: [00:22:15] someone's is like they said, like, don't check your portfolio. And then in capitals like, ha ha ha ha ha. 

Maddy: [00:22:22] I'm like, That's kind of it. Sorry about. 

Sophie: [00:22:26] To really just round up this conversation, it's, you know, our strategies and we speak about it all the time is to invest for the long term, right? 

Maddy: [00:22:33] Correct. 

Sophie: [00:22:34] So this will happen in the stock market. But if you have your eyes on 30 years time, and if you look at any graph that has, you know, a dip in the stock market, you still say that it does go up even after the dips. Not necessarily. That that's part of romance is an indicator of future performance. But that's what we've seen historically. So I think for you and me, we've had conversations that we're just like, think about when we're 40.

Maddy: [00:22:57] Yeah, I think this has been a great lesson for both of us and our community by the sounds of things which I love that, you know, it's stick to your strategy and think long term. 

Sophie: [00:23:06] Exactly. Season three watch list is back. If you are new to your anchor company, this is when we ask our guests and ourselves to add a stock company, news or industry to our watchlist. And the purpose of this is just to get us thinking outside of our box. We're not financial advisors, so this is purely for educational purposes only and doesn't constitute financial advice. You're coming home with me. So Mads, what are you adding to the watch list today? 

Maddy: [00:23:34] My addition to the watch list today is more of like a fun exercise that I want to trial. OK. So I am pitching a stock with Tik-tok Bear Air, and it's the BetaShares Australian Equities Bear hedge fund. OK, that's a lot of words. So I'm adding this fund to the portfolio and I want to add it for one month only. Are you allowed that?

Sophie: [00:23:55] I can allow it, but it goes against everything we've just said.

Maddy: [00:23:58] I know this is why it's a fun exercise because I want to try and illustrate why dollar cost averaging is better than trying to time the market. OK, I'm going to attempt to time the market with this watch list, ED.. 

Sophie: [00:24:11] OK, I'm just going to I'm just going to go with it, and I'm just hoping that this is all fictional. OK? 

Maddy: [00:24:17] So Bear is designed to go up in value when the market goes down and vice versa. So basically, this ETF seeks to generate returns that are negatively correlated to the stock market. 

Sophie: [00:24:29] So it's like shorting the stock market. 

Maddy: [00:24:31] Exactly. So at the moment, we're talking about how the ASX is on a bit of a downward trend. Yes. So I'm basically betting that it's going to continue and I say betting very deliberately, but it's going to continue to go down for the next month and please do not take this as actual thoughts on completely speculating. I've just done a month of like, you know, fund for purposes of investing in. Yeah, which basically means that this ETF is going to increase in value for the next month. 

Sophie: [00:24:58] OK, well, in a month's time, everyone caught us our fourth episode, fourth or fifth episode for the season. We will check in to see where this bear's gone 

Maddy: [00:25:06] for one month and one month only. This is not staying in the portfolio for long. I will on. I actually. Yeah, that's done. No, I think I will note that BetaShares actually says on there on the page about this one, that it's not recommended for long term investments because we know that, like the share market does historically go up over time. So if you're going to buy and hold this fund, it's probably not going to do so well. 

Sophie: [00:25:30] It's a bit of a funny moment.

Maddy: [00:25:30] Personally, I would never actually put my money in this because I am a long term investor, which means I hope the stock market's going to go up, but I am pretty in charge. Say how this line goes nice. 

Sophie: [00:25:39] Like the exercise, it's good. 

Maddy: [00:25:41] What are you adding to our watch list today? 

Sophie: [00:25:43] OK, well, I'm just going to be boring old Jane again. My middle name is actually Jane. So my sense is your middle name, Jane, 

Maddy: [00:25:51] as if you don't know that. I think I did 

Sophie: [00:25:53] know that, oh my god, we both have the same middle name. Yeah, but it's

Maddy: [00:25:56] double barrel 

Sophie: [00:25:57] low is a chain. Yeah, I'm full of boring old Louisa Jane, but I am adding an investing book. And when I say an investing book, I mean, any investing book that you want to read, I'll mention a couple, but it feels a bit more like a recommendation than adding to the watch list. But it feels really necessary given this episode. So what my thoughts were around it is that most investing books are written by people that have been in the market for a really long time. So if you look like books like One Up on Wall Street by Peter Lynch or The Intelligent Investor by Benjamin Graham, they both give out pieces of advice or, you know, detail circumstances when the market has crashed before and what happens and what happens afterwards. And like in my mind, that's free advice for all of us who might have not experienced this before 

Maddy: [00:26:44] I actually started reading one up on Wall Street over the summer off the back of your recommendation as I started. Because like, it's not, it's really interesting. I really enjoy. It's hotter this summer. It's kind of like a lot to read the whole book. So I've read the first maybe quarter. What would you say are some of the key learnings that you have taken away from? 

Sophie: [00:27:02] I feel like some of the key learnings are volatility can be your friend if you really understand what you're invested in. So I guess we spoke about like the undervalued overvalued. So they do speak about that. They also speak about the fact that, you know, the general trend of the stock market does go up and over the long term, the market will really revert back to its intrinsic value. And one of the best lessons I feel like I get out of any of these books that I write is in the stock market, you really need to be able to control your emotions because if you can't control your emotions, then it's going to lead you to probably make poor decisions with when you buy and sell. And so I always take that one is like, you know, take a breath, 

Maddy: [00:27:39] take a breath. It's great. I mean, it's free advice from people who have experience like so many downward trends or crashes or bouts of volatility. I think, you know, picking up an investing book, especially at times like this, is really invaluable

Sophie: [00:27:52] if you've never done it before. Set yourself a time to go. Honestly, it can take time. It doesn't have to be like, you know, done in a month or whatever. Take your time with it. But it's nice how valuable it was, even if a lot of people say it until I did it myself.

Maddy: [00:28:05] Well, I think that brings us to the end of today's episode. Very happy to be back for season three. 

Sophie: [00:28:11] First episode of Season three. Done and dusted.

Maddy: [00:28:14] We have mentioned it a few times on today's episode, but I would like to just do it again. A call out to our Facebook community group. Why I say investing podcast discussion group. I have been loving the content in that recently, especially over some of those bean recommendations as being commentary around what's happening with different stocks, particularly at the moment, which is great. 

Sophie: [00:28:33] Also, obviously our Instagram at Wijk podcasts and I know this time of year people are really setting up their money goals. So if you know that someone is wanting to get into investing, please feel free to share with them our summer series or just our podcast. In general, we hope that we can grow this community for more people like you.

Maddy: [00:28:52] We're also really getting into Tik-tok why I joined a podcast, so I would love any support. 

Sophie: [00:28:58] Yes, please go like something we're trying so hard.

Maddy: [00:29:01] I've got like 300 followers. You will hear

Sophie: [00:29:05] from us again next week. 

Maddy: [00:29:06] Catch you then, bye.