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What is a Bear Market? · She's On The Money

0:00
Speaker 1: Hello.
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Speaker 2: My name is Sanatasha Nabananga Bamblet. I'm a proud your
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Speaker 2: the Order, Kernie Whoalbury and a waddery woman. And before
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Speaker 2: we get started on She's on the Money podcast, I
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Speaker 2: would like to acknowledge the traditional custodians of the land
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Speaker 2: of which this podcast is recorded on a wondery country,
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Speaker 2: acknowledging the elders, the ancestors and the next generation coming
0:22
Speaker 2: through as this podcast is about connecting, empowering, knowledge sharing
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Speaker 2: and the storytelling of you to make a difference for
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Speaker 2: today and lasting impact for tomorrow.
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Speaker 1: Let's get into it.
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Speaker 3: She's on the Money.
0:36
Speaker 1: She's on the Money.
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Speaker 3: Hello, and welcome to She's on the podcast from millennials
1:01
Speaker 3: who want financial freedom Today, we are diving deep into
1:05
Speaker 3: the concept of bear markets, which, to be honest, is
1:08
Speaker 3: a term I only heard for the first time in
1:10
Speaker 3: the news very recently, and if I'm being Frank, I
1:14
Speaker 3: don't really get it.
1:15
Speaker 1: Your name's Georgia, not Frank.
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Speaker 3: A good one and thankfully here to shed a little
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Speaker 3: light and to explain what a bear market is, what
1:22
Speaker 3: it means for us, and how it compares to a
1:24
Speaker 3: bull market. It's Victoria Devine of course VD, welcome back
1:28
Speaker 3: from Europe.
1:29
Speaker 1: Good to have you, Gosh, thank you. I love that.
1:32
Speaker 1: Just before this episode, we're having a chat and you
1:34
Speaker 1: were like, what is a bear market? Like, how does
1:36
Speaker 1: it work? Why is it called a bear market? What
1:38
Speaker 1: does that mean? I'm like, it's legitimately a bear, the
1:41
Speaker 1: animal bear like a bear, and then the bull market
1:44
Speaker 1: is legitimately the bull How many people just didn't know
1:47
Speaker 1: that and they were like, Oh, I must be this
1:49
Speaker 1: complex investing term. It's not. It's real cute.
1:53
Speaker 3: And that's what we're going to break down today. I
1:56
Speaker 3: feel like the most sensible place to start is that
1:59
Speaker 3: the start with the basics. What is a bear market?
2:03
Speaker 1: That is a smart place to start at, George. But
2:06
Speaker 1: before we get there, let's just have a chat about
2:08
Speaker 1: investing markets as a whole. And I think we've seen
2:11
Speaker 1: it in the She's on the Money community a lot recently, right,
2:15
Speaker 1: like last six months, since Christmas, even before Christmas, right,
2:18
Speaker 1: We've seen so many posts in the community. We're talking
2:22
Speaker 1: about the Facebook community here about you know, oh my gosh,
2:25
Speaker 1: my spaceship accounts down, or someone's like, oh my gosh,
2:27
Speaker 1: my rais is down, or I was looking at my
2:29
Speaker 1: portfolio and I'm still behind. And there's just been this
2:32
Speaker 1: consistent piece of conversation around our investments as a whole
2:38
Speaker 1: not doing well. And I think it started with like,
2:40
Speaker 1: oh my gosh, is it spaceship and we're like, no,
2:42
Speaker 1: it's not the platform, it's the market as a whole,
2:46
Speaker 1: and we have been going in this direction down. Bear
2:49
Speaker 1: market spoiler is when the market decreases in value. We'll
2:52
Speaker 1: get to that in a hot second. But if we
2:55
Speaker 1: look at the community and we look at the markets
2:57
Speaker 1: as a whole, I feel like we've all been really
2:59
Speaker 1: concerned about it and we haven't really known what's going on.
3:02
Speaker 1: And obviously there's lots of implications. There's been war and
3:05
Speaker 1: COVID and you know, after the bushfire, has so much
3:09
Speaker 1: happened in Australia but also in the wider world, and
3:14
Speaker 1: it now makes sense to be talking about it. Not
3:16
Speaker 1: that we haven't been this entire time, but we're currently
3:19
Speaker 1: or now officially in what is known as bear market George.
3:23
Speaker 1: A bear market, to define it really quickly, is when
3:25
Speaker 1: the market falls by twenty percent or more from its
3:29
Speaker 1: fifty two week high. So many people say that it
3:32
Speaker 1: is typically a sign of negative investor sentiment, which kind
3:36
Speaker 1: of makes sense, like we're all feeling a little bit apprehensive,
3:40
Speaker 1: we're more likely to, you know, stockpile some cash under
3:43
Speaker 1: the mattress because of the tumultuous times that might be ahead,
3:46
Speaker 1: especially after what we've been through. But essentially, a bear
3:50
Speaker 1: market is where people are selling shares, getting rid of things,
3:54
Speaker 1: stocking away their cash in their mattress, and hibernating for
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Speaker 1: the winter, which is where I mean, there's a lot
4:00
Speaker 1: of hearsay around where bear came from, but we're going
4:03
Speaker 1: to define it as we're hibernating. So a bear hibernates cute, right, sure.
4:07
Speaker 1: The opposite bull market. You're not following yet, are you? No?
4:10
Speaker 3: No, I'm picking up little bits.
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Speaker 1: The opposite is a bull market, and a bull as
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Speaker 1: an animal really aggressive, like you see them with the flags.
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Speaker 1: They'll go ya. But that is where the value of
4:22
Speaker 1: the market has risen by a minimum of twenty percent
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Speaker 1: from the previous fifty two week high. So a bull
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Speaker 1: is buying shares and like charging at the market, and
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Speaker 1: a bear is kind of like stockpiling their acorns. Bears
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Speaker 1: eat acorns, no, but they do hibernate for the winter,
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Speaker 1: So lave it there? Does that make sense? Are you
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Speaker 1: following me? Now?
4:40
Speaker 3: I feel like bear. It's also like kind of a
4:42
Speaker 3: double meaning, like bear market means like people, there's barely
4:46
Speaker 3: anyone there. It's a bear people are treating it's fair.
4:49
Speaker 3: It works, you know, I'm not always silly.
4:52
Speaker 1: What's the sentient on ball? Don't need one, don't mean.
4:57
Speaker 3: One, don't know that's it? You said a fish there before,
5:01
Speaker 3: Victoria Devine. So has this happened very recently, because I
5:05
Speaker 3: have heard it has, but I haven't.
5:06
Speaker 1: Been happy in June at my love. So as of
5:09
Speaker 1: mid June, we officially made it into a bear market,
5:12
Speaker 1: which means that the market has now officially fallen by
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Speaker 1: twenty percent, which sounds really scary and it absolutely shouldn't be.
5:19
Speaker 1: At the same time as like, it is a good
5:21
Speaker 1: time to review your investment strategy. It is a good
5:24
Speaker 1: time to think about money, but it's also a good
5:26
Speaker 1: time to And this is a quote that I have
5:28
Speaker 1: seen all over the internet recently, purely because obviously the
5:32
Speaker 1: markets have gone down. But when in doubt, zoom out,
5:36
Speaker 1: so like when you're in doubt, obviously it feels really scary,
5:40
Speaker 1: but we have been through so many market changes over time.
5:43
Speaker 1: Like if we now look at a chart that shows us,
5:47
Speaker 1: you know, investment performance over time, those blips that we
5:50
Speaker 1: see on a market chart look really small now, but
5:53
Speaker 1: then you look and go, wow, hold on, zoom in.
5:56
Speaker 1: That's the GFC in two thousand and eight, two thousand
5:58
Speaker 1: and nine that now look like a very small bump.
6:01
Speaker 1: It went down and then it's obviously recovered and gone back.
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Speaker 1: We're at one of those blips again. So it's going
6:06
Speaker 1: to feel really dramatic because twenty percent nobody Like if
6:10
Speaker 1: I said to you, ge, do you want to invest?
6:11
Speaker 1: You go yeah, V then you lost twenty percent. You're
6:15
Speaker 1: gonna be happy with me.
6:16
Speaker 3: I'm want to be loving that. No, it's going to
6:18
Speaker 3: be loving it.
6:18
Speaker 1: But if I took you back to two thousand and
6:20
Speaker 1: nine and was able to show you what the future
6:22
Speaker 1: looked like and that the market would recover and it
6:25
Speaker 1: will be okay, and you're actually well above and beyond
6:27
Speaker 1: what you were before, you'd be like, no, I want
6:28
Speaker 1: to hold on. But in the moment, it is really scary.
6:32
Speaker 1: And that's why on Sheese on the Money, we talk
6:34
Speaker 1: so significantly about behavior all investing people, often, especially in
6:39
Speaker 1: a bear market, they go, oh my gosh, everybody else
6:41
Speaker 1: is selling. The market's going down. I want to save
6:43
Speaker 1: my money, like I don't want to lose any more.
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Speaker 1: So they often crystallize their losses and pull their money
6:50
Speaker 1: out and they're like, no, no, no, I don't want to
6:51
Speaker 1: lose more, when in reality that can actually harm you
6:54
Speaker 1: because you're pulling money out while it's worthless instead of
6:57
Speaker 1: just riding the wave and going no, I know that
7:00
Speaker 1: this is how it works. We're going to ride that
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Speaker 1: wave and it will rebound at some point in the future.
7:05
Speaker 3: So what's happening right now? Why are we in a
7:08
Speaker 3: bear market situation?
7:10
Speaker 1: Oh, because bears are real cute and everyone's like, it's true,
7:12
Speaker 1: let's switch. Well, not as cute as a bear, but no,
7:15
Speaker 1: we're in a bear market right now, which is actually
7:17
Speaker 1: called a correction. So the market's correcting our itself. It
7:20
Speaker 1: was flying and going up, and remember there was just
7:23
Speaker 1: like so many people, maybe like just pre COVID talking
7:27
Speaker 1: about investing and being like, oh my god, investing, I'm
7:29
Speaker 1: making so much money. Like everyone's gloating on shees on
7:31
Speaker 1: the money, how much they're making their spaceship and their
7:33
Speaker 1: raise accounts, and stuff. Remember that, and then they were
7:36
Speaker 1: complaining about it because they're like, is it spaceship and
7:38
Speaker 1: we need to remember that it's actually market driven, not
7:41
Speaker 1: platform driven. If the underlying assets that your platform own
7:45
Speaker 1: are you know, really reflective of the market. But essentially,
7:48
Speaker 1: right now we're going through a market correction which has
7:50
Speaker 1: been going on for a while now, and it's actually
7:53
Speaker 1: due to one inflation, which we're hearing a lot about
7:56
Speaker 1: at the moment. It's due to the ongoing impacts of
7:59
Speaker 1: Russia's invasion into Ukraine, which is still terrifying, still baffles
8:04
Speaker 1: me in twenty twenty two that that is what's going
8:06
Speaker 1: on and the implications of that on global trade. So
8:10
Speaker 1: obviously those things are really significant, but that is from
8:14
Speaker 1: what all the economists are saying, is what is driving
8:17
Speaker 1: current downturn in the market. And when you say that,
8:21
Speaker 1: ve is this an Australian situation or is it GLO
8:25
Speaker 1: global situation? It is global situation. So it's not something
8:29
Speaker 1: where it's like, oh my god, it'sh Australian shares. No,
8:31
Speaker 1: this is across the board. So a couple of weeks ago,
8:34
Speaker 1: the inflation numbers out of the US came through and
8:37
Speaker 1: everyone was really scared, but they were higher than expected,
8:41
Speaker 1: and we know this because we've been talking about it
8:43
Speaker 1: in the community. But essentially it hit a four decade
8:46
Speaker 1: high in the US in Australia of eight point six percent,
8:51
Speaker 1: So inflation in the US is now at a level
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Speaker 1: that has not been seen since December nineteen eighty one.
9:00
Speaker 1: So it makes sense that we're a bit like, what
9:02
Speaker 1: is going on? This is really scary. So we've seen
9:05
Speaker 1: a lot and here in Australia, the Reserve Bank actually
9:08
Speaker 1: early June, I believe it was like the seventh of June,
9:10
Speaker 1: an announcement came out that the Reserve Bank had the
9:13
Speaker 1: single biggest rise in the cash rate in twenty two years,
9:17
Speaker 1: which is again scary. And Australia's Central Bank tried to
9:20
Speaker 1: quash inflation before it got out of control, and the
9:23
Speaker 1: RBA board, they have a regular monthly meeting, they lifted
9:26
Speaker 1: the cash rate fifty basis points, so it went up
9:30
Speaker 1: to zero point eight five And if you follow us
9:32
Speaker 1: on Instagram, we posted about that and that was much
9:36
Speaker 1: higher than what everybody expected. But essentially that happened because
9:41
Speaker 1: we wanted to quash inflation, like it's not going to
9:43
Speaker 1: stop it, but it's just stopping it impacting you as significantly.
9:47
Speaker 1: And then closely following that, we got the announcement that
9:50
Speaker 1: Albow had increased the minimum wage, which is obviously a
9:54
Speaker 1: really good thing, but I do think that was really
9:56
Speaker 1: driven by the fact that inflation is so significant right now.
10:00
Speaker 1: If you're a She's on the Money regular, Hi, thanks
10:02
Speaker 1: for listening. But also you've heard Jess and I and
10:05
Speaker 1: George talk for weeks on the Friday Drinks episodes about
10:09
Speaker 1: like fuel prices and how expensive things are, Like this
10:13
Speaker 1: is impacting not just investors but everyday people who are
10:17
Speaker 1: just trying to get to work and put food on
10:19
Speaker 1: the table. So I think it's important to look at
10:21
Speaker 1: what a bear market means, whether you're an investor or not.
10:24
Speaker 1: It's not just like, oh, if you're a serious investor,
10:27
Speaker 1: the bear market's really important to understand, No, it's not.
10:30
Speaker 1: It's important to understand if you're an individual who uses money,
10:34
Speaker 1: full stop, end of story, because inflation in the US
10:37
Speaker 1: has you know, obviously been wild and not been seen
10:41
Speaker 1: that high since December nineteen eighty one, Like that's crazy
10:45
Speaker 1: to think that we're back there, and that's obviously then
10:48
Speaker 1: sent the stock market further into a bit of a
10:51
Speaker 1: bit of a panic. You're a bit worried. So I
10:54
Speaker 1: think it's really important to understand that our governments are
10:56
Speaker 1: doing a lot to try and curb this and put
10:58
Speaker 1: us in a position where it doesn't impact the everyday
11:01
Speaker 1: person as much. But if you're an investor, you're going
11:04
Speaker 1: to feel this pretty significantly in your share portfolio. And
11:08
Speaker 1: as an investor myself, it is not that fun logging
11:11
Speaker 1: into my share portfolio. As you guys know, I'm a
11:14
Speaker 1: pretty aggressive investor. It's down pretty significantly. I don't like
11:19
Speaker 1: seeing that. Just because I run cheese on the money
11:22
Speaker 1: doesn't mean I'm immune to feeling sick when I look
11:24
Speaker 1: at my investment. But like I can't tell you you
11:27
Speaker 1: never get over that. But what you do do is
11:29
Speaker 1: you educate yourself and you're like, no, Victoria, you can't
11:33
Speaker 1: sell your asset. Stop doing that, Stop thinking like that,
11:36
Speaker 1: and go back to the advice you give everybody else. Yeah,
11:39
Speaker 1: still easier to give advice than he needs to take it.
11:41
Speaker 3: George, Well, that's the thing. It sounds to be, frank
11:46
Speaker 3: quite scary. My mind is going, well, bear market, stressful times, recession,
11:53
Speaker 3: that's like the line that I'm drawing, is that fair? Like?
11:58
Speaker 3: Are we heading down that? Or is it not as
12:01
Speaker 3: dark as that?
12:02
Speaker 1: No, it is absolutely as dark as that. I absolutely
12:04
Speaker 1: go to see a recession coming, and it's because the
12:07
Speaker 1: market's in a way gotten away from us and it
12:10
Speaker 1: needs to readjust. It does mean that we need to
12:13
Speaker 1: be quite careful with our spending. I don't want to
12:16
Speaker 1: scare people. We actually need to. I guess talk about
12:19
Speaker 1: here market corrections and what that means, and a lot
12:22
Speaker 1: of economists are predicting it, and we will probably do
12:26
Speaker 1: an entire podcast on a recession and what that means
12:28
Speaker 1: and how that works. But we are young, George, and
12:32
Speaker 1: we're in that very privileged position where you know, if
12:34
Speaker 1: you look at the risk return chart we have on
12:37
Speaker 1: our side time and I've spoken to people in our
12:40
Speaker 1: community who are sixteen and listening to the podcast. I've
12:43
Speaker 1: spoken to people who are sixty six and listening to
12:46
Speaker 1: the podcast, and we're all in different circumstances. To me,
12:50
Speaker 1: if you are, you know, a millennial and you're an investor,
12:53
Speaker 1: it is not anything that you need to jump up
12:55
Speaker 1: and down about and really worry about unless you have
12:57
Speaker 1: a very volatile employment situation, in which case I would
13:00
Speaker 1: always recommend an emergency fund regardless of who you are
13:03
Speaker 1: or what you do. But from my perspective, these types
13:07
Speaker 1: of things really impact you if you're close to retirement,
13:10
Speaker 1: where you know, a significant downturn in your investment portfolio
13:15
Speaker 1: or your superannuation is going to mean that you're not
13:17
Speaker 1: retiring within the timeframe that you want to. It could
13:20
Speaker 1: also mean that, you know, George, let's say you own
13:23
Speaker 1: a home and you're like, oh, v I wanted to
13:26
Speaker 1: own the home for five years, but then a recession
13:28
Speaker 1: hits and it's not worth as much as you wanted
13:30
Speaker 1: it to be worth. So therefore your time frames on
13:33
Speaker 1: your goals have changed, because we actually should push that
13:36
Speaker 1: goal out because I don't want you losing money by
13:38
Speaker 1: selling that property today and not getting what you needed
13:42
Speaker 1: from it, if that makes sense. So a lot of
13:44
Speaker 1: privilege plays into this as well, because during a recession,
13:47
Speaker 1: a lot of people are forced to do a lot
13:49
Speaker 1: of things that they wouldn't want to do, especially when
13:51
Speaker 1: it comes to money, which is why I think it
13:53
Speaker 1: is so important to go back to that emergency fund
13:56
Speaker 1: piece and talk about what that means. But essentially all
14:00
Speaker 1: of that in mind, and the fact that you know
14:03
Speaker 1: inflation is so prevalent and such a big key point,
14:07
Speaker 1: markets are now taking that into consideration. Hence the fall
14:11
Speaker 1: like that has been very well timed, the fall in
14:14
Speaker 1: the market with when inflation was announced in Australia internationally, Like,
14:18
Speaker 1: that's what is driving that this time. And as much
14:21
Speaker 1: as the economic news isn't great and it all sounds
14:24
Speaker 1: really negative, let's flip this. Shares are on sale. Baby.
14:28
Speaker 3: That's a good point. That's a nice spin that.
14:31
Speaker 1: I love that. But prices falling means that we are
14:35
Speaker 1: looking at having more attractive investment options if you're in
14:38
Speaker 1: a position to invest, Like as an investor right now,
14:42
Speaker 1: I'm looking at the market going like okay, cool, Like
14:44
Speaker 1: what are some things I might want to pick up
14:46
Speaker 1: that are discounted that are going to be really solid
14:49
Speaker 1: players in my investment portfolio for the long term. Like
14:52
Speaker 1: it's really exciting. Like when you're out shopping and you
14:55
Speaker 1: see twenty percent off, you get excited. But when we
14:57
Speaker 1: see it in the share market, we we nearly wet
14:59
Speaker 1: our pair. It's Georgia King.
15:01
Speaker 3: And we usually say, don't get sucked into sales.
15:03
Speaker 1: But on this occasion, not about all shy if you can,
15:08
Speaker 1: but also be really smart and have an emergency fund,
15:10
Speaker 1: because we all want to be safe. But it's important
15:14
Speaker 1: to understand that this is not just one platform that's
15:17
Speaker 1: going to be impacted. It's not just your Spaceship account
15:20
Speaker 1: or your Raise account, like everybody across the market is
15:24
Speaker 1: going to be impacted. I'm a direct investor, I'm impacted.
15:28
Speaker 1: It's not something that you know people are going to
15:31
Speaker 1: be immune from. But I think we need to go
15:33
Speaker 1: back to behavioral investing and understand that the behavioral investing
15:37
Speaker 1: chart has ebbs and flows, and Warren Buffett said it
15:41
Speaker 1: best be greedy when people are fearful, and be fearful
15:44
Speaker 1: when people are greedy. And that goes back to if
15:47
Speaker 1: the market's really high and people are really excited. Remember
15:51
Speaker 1: Bitcoin when everyone was like super stoked on it, and
15:54
Speaker 1: every man and his dog was buying a bitcoin. Not
15:57
Speaker 1: that you can buy a single bitcoin because that is
15:59
Speaker 1: now worthwait much, but they were buying parts of bitcoin
16:03
Speaker 1: and then it crashed and then everybody was really worried.
16:07
Speaker 1: Like that's the emotional rollercoaster that is investment, that is
16:11
Speaker 1: the investing journey. And I think We need to just
16:13
Speaker 1: be super aware of what that means and how that works,
16:16
Speaker 1: because we can get carried away and we can crystallize losses.
16:21
Speaker 1: Like how many people in the She's on the Money
16:23
Speaker 1: community have we seen George message us going, oh my god,
16:27
Speaker 1: my spaceship portfolio was down, so I just sold all
16:29
Speaker 1: my shares or I got rid of it. And I'm like,
16:31
Speaker 1: oh my gosh. Like I feel mean saying this, But
16:35
Speaker 1: have I taught you, sir? Like I feel like a
16:39
Speaker 1: mum at the dinner table, Like I remember way back when, right,
16:42
Speaker 1: I was like at the dinner table with my dad,
16:45
Speaker 1: have no idea what I was talking about, but I
16:48
Speaker 1: was like, Dad, there's this great thing I did XYZN.
16:51
Speaker 1: He just looked at me and he's like, are you joking?
16:53
Speaker 1: And I was like, Dad, I'm really excited, Like why
16:55
Speaker 1: aren't you sharing my excitement for this? Obviously very independent
17:00
Speaker 1: in discovery, he is, I have been telling you that
17:02
Speaker 1: for months.
17:03
Speaker 3: Hang on, are you talking about investing?
17:04
Speaker 1: No, it's interesting in general, no idea, but like I
17:07
Speaker 1: thought i'd discovered it for the first time. I was
17:09
Speaker 1: not listening to my dad. I feel like that's my
17:11
Speaker 1: community today.
17:12
Speaker 3: Sure, I guess what I kind of wanted to bring
17:15
Speaker 3: up is that she's in the money. He's been alive
17:17
Speaker 3: for three years. It was our third birthday last week.
17:21
Speaker 1: Whild how cute do we?
17:22
Speaker 3: And for a lot of us, this is our really
17:24
Speaker 3: our first test into a real market downturn, and this
17:29
Speaker 3: is kind of our challenge to take it upon ourselves
17:33
Speaker 3: to be like, what have we learned over the past
17:35
Speaker 3: three years? We hold on is that the message that
17:39
Speaker 3: you would say to the girl.
17:41
Speaker 1: Is absolutely and I think it's really important to remember
17:44
Speaker 1: that it's actually about education, and the more educated you are,
17:48
Speaker 1: the more comfortable you're going to be going through this.
17:51
Speaker 1: And you know, not to call anybody out individually, but
17:55
Speaker 1: if you have sold your shares because you've been really
17:57
Speaker 1: concerned about the falling prices, I think now's the time
18:00
Speaker 1: to go why did you make that decision, because usually
18:04
Speaker 1: that decision has been made out of fear, and fear
18:07
Speaker 1: comes from a lack of education. The more educated you
18:10
Speaker 1: are about something, the less fearful you are of it,
18:12
Speaker 1: because you're like, well, I know what that is. It
18:14
Speaker 1: doesn't matter what it is or how it works. Like
18:16
Speaker 1: people who are super educated on ghosts. George not scared
18:20
Speaker 1: of them me terrified.
18:23
Speaker 3: I love this, but it.
18:24
Speaker 1: Makes sense, right, Like the more you know about a
18:27
Speaker 1: particular topic. Our producer is laughing at us. I don't
18:31
Speaker 1: know if I can carry on. But the more you
18:33
Speaker 1: know about a certain topic, the more comfortable you are
18:36
Speaker 1: with it when confronted with it.
18:38
Speaker 3: Yeah, that's true.
18:39
Speaker 1: So I think it's really important to go if I'm
18:41
Speaker 1: scared about making this decision anywhere in life, Let's be honest.
18:45
Speaker 1: Maybe I just need a bit more education. Maybe I
18:47
Speaker 1: need to read a blog. Maybe I need to read
18:49
Speaker 1: a book, maybe I need to listen to the Shees
18:51
Speaker 1: on the Money podcast. Like, it's not a bad thing.
18:54
Speaker 1: I think we just need to talk about it and
18:56
Speaker 1: what it actually means. And a bear market is not
18:59
Speaker 1: something to be scared of. It just means that the
19:02
Speaker 1: US stock price declined. It declined twenty two percent from January.
19:07
Speaker 1: It peaked in January, and share prices have been bouncing
19:10
Speaker 1: around for the last twelve months. And now we're seeing
19:14
Speaker 1: a term being put on that. But we all kind
19:17
Speaker 1: of saw this coming. We've been having this conversation. We've
19:20
Speaker 1: seen it. I've said before on the podcast, Well, I
19:22
Speaker 1: feel like there might be a recession coming, like this
19:24
Speaker 1: makes sense, and then economists are saying the same thing now,
19:27
Speaker 1: and I'm like, yeah, this makes sense. I'm an educated investor, though,
19:31
Speaker 1: and I want to be able to empower the rest
19:33
Speaker 1: of the community with that education so that they have
19:37
Speaker 1: that confidence to feel like, okay, cool, Like, let's reframe this.
19:41
Speaker 1: Let's see this as an opportunity because I'm young, and
19:43
Speaker 1: I can create wealth and I can do this, and
19:45
Speaker 1: I can do that instead of going, oh my gosh,
19:48
Speaker 1: everyone's talking about it being a terrible market, so your
19:51
Speaker 1: shares are on sale.
19:52
Speaker 3: Yeah, yeah, listen to your sisters at Cheese on the money,
19:55
Speaker 3: take it seriously, but zap out the emotion. Yeah, what
19:57
Speaker 3: I mean?
19:58
Speaker 1: Right, let's go to it. Right, let's do it. Let's
20:00
Speaker 1: more bear market and bullmarket when we gave back fabulous.
20:07
Speaker 3: Alrighty, guys, welcome back. Great to have you.
20:10
Speaker 1: If you're still with us, do you reckon they're still
20:13
Speaker 1: with us? We are about such dry content. No, it's dry,
20:16
Speaker 1: but I think the way that you've explained it.
20:17
Speaker 3: Is genuinely so interesting and engaging and as I.
20:21
Speaker 1: Said, really cute. So why would you go anywhere?
20:23
Speaker 3: Well, they are, but as I said, at the top
20:24
Speaker 3: of the episode, like, I've heard this term, but I
20:26
Speaker 3: haven't understood it. It's kind of hard to grasp when
20:28
Speaker 3: you're reading it on a page. So it's really good
20:31
Speaker 3: to have you explain it. So thank you so much.
20:33
Speaker 3: The you mentioned earlier the term market correction, I did,
20:37
Speaker 3: how does that differ from a bear market? What does
20:40
Speaker 3: it mean?
20:40
Speaker 1: I feel like I accidentally used those a little bit interchangeably,
20:44
Speaker 1: and they're actually two different things. So corrections in bear
20:47
Speaker 1: markets are both defined not defined, but they're both associated
20:53
Speaker 1: with you could say, falling share markets, so falling prices
20:56
Speaker 1: of shares. The difference between the two is, I guess
20:59
Speaker 1: how big that fall is. So a correction or a
21:02
Speaker 1: market correction is typically defined as a share market fall
21:05
Speaker 1: of about ten percent, okay, so half of a bear market.
21:09
Speaker 1: And as we said before, a bear market is when
21:12
Speaker 1: we have a minimum of a twenty percent drop. And
21:15
Speaker 1: so in the month of June twenty twenty two, we
21:18
Speaker 1: saw the US stock price, so the SMP five hundred index,
21:22
Speaker 1: which you can ask me in a hot second to
21:23
Speaker 1: what that is entered officially bear market territory when we
21:28
Speaker 1: had a twenty two percent decline from its peak in January,
21:32
Speaker 1: so officially we're there, but a market correction is about
21:35
Speaker 1: ten percent, and then a bear market's twenty.
21:38
Speaker 3: Okay, so it's yeah, bear market's worse.
21:40
Speaker 1: That's good to know.
21:41
Speaker 3: Here we are what you said just before SMP markets.
21:45
Speaker 1: Oh, the SMP five hundred, which you've probably seen before
21:50
Speaker 1: usually like in the really tiny text at the bottom
21:52
Speaker 1: of the TV when you're watching the news at night,
21:55
Speaker 1: and you would hear people being like in the SMP
21:57
Speaker 1: index is up by it or it's down by You've
21:59
Speaker 1: heard this before, right, Like that feels familiar. So the
22:02
Speaker 1: SMP is actually called the Standard and Pause five hundred,
22:05
Speaker 1: or simply put the SMP five hundred, and it is
22:09
Speaker 1: a stock market index tracking the stock performance of five
22:12
Speaker 1: hundred large companies that are listed on the US Exchange
22:16
Speaker 1: in the United States, and it is one of the
22:18
Speaker 1: most commonly followed indices, so it is one of the
22:22
Speaker 1: most commonly used I guess measures of what's going on
22:25
Speaker 1: in the market. So if you ever hear sm P
22:27
Speaker 1: five hundred, it's actually not that complex. It's just the
22:30
Speaker 1: five hundred top companies that are used for us to
22:34
Speaker 1: measure what's going on in the market.
22:36
Speaker 3: Okay, makes sense, all right, sure for sure.
22:39
Speaker 1: And as of today, George, if you google SMP five hundred,
22:42
Speaker 1: I won't tell you what today's date is, but you
22:44
Speaker 1: can work out what date we recorded by this number,
22:47
Speaker 1: we are down eleven point six three percent, which is
22:49
Speaker 1: point three percent today.
22:51
Speaker 3: G So back to recession chats, love recession chats. The
22:56
Speaker 3: word recession is terrifying.
22:58
Speaker 1: It is, right, Why why do you feel feel like
23:00
Speaker 1: that's terrifying? What are your attachments to that one?
23:03
Speaker 3: So my mind goes to the global financial crisis over
23:07
Speaker 3: in the US and visions of that for me, like
23:10
Speaker 3: people losing their jobs, everyone's selling up, just a really
23:13
Speaker 3: scary time.
23:14
Speaker 1: Like great depression kind of vibes because that was also
23:17
Speaker 1: a recession and.
23:18
Speaker 3: People like losing their homes and all of these really
23:20
Speaker 3: really serious things. And you just said before that like
23:23
Speaker 3: a recession is coming, So how can we not be
23:27
Speaker 3: afraid of that? Like is it as scary as that
23:30
Speaker 3: picture I have in my head? Or is it not
23:32
Speaker 3: going to be that bad?
23:33
Speaker 1: Look a recession? Honestly, it is really scary and it
23:37
Speaker 1: can be really scary, and like, let's define it. But essentially,
23:40
Speaker 1: a recession is a significant decline in economic activity that
23:43
Speaker 1: lasts for months or even years. Obviously, the Great Depression
23:46
Speaker 1: is a really good example of that. That was so significant.
23:50
Speaker 1: I mean at the time, it wasn't called the Great Depression.
23:52
Speaker 1: They named it after that happened, because you don't know
23:54
Speaker 1: what you're in for with a recession, you don't know
23:56
Speaker 1: how long it's going to play out for. Then the GFC,
23:59
Speaker 1: which is the Global financial crisis, which we should do
24:02
Speaker 1: an entire episode on I reckon. That would be from
24:05
Speaker 1: a financial advisers perspective, Maybe we should go out to
24:08
Speaker 1: the community and they even ask so they want this,
24:10
Speaker 1: but like, what is the global financial crisis? Why are
24:14
Speaker 1: people still talking about it? When it happened in two
24:16
Speaker 1: thousand and eight, two thousand and nine, What started it?
24:18
Speaker 1: How did that work? But essentially, experts they declare a
24:21
Speaker 1: recession when a nation's economy experiences negative gross domestic product GDP.
24:27
Speaker 1: GD probably heard of that before, rising levels of unemployment,
24:31
Speaker 1: falling retail sales, so people are shopping less and contracting
24:35
Speaker 1: measures of income and manufacturing for an extended period of time,
24:38
Speaker 1: which we I feel like we're starting to feel right
24:41
Speaker 1: in the conversations we're having so lettus lettus, which is
24:46
Speaker 1: twelve dollars lettuce, twelve dollar letters, petrol, petrol. All of
24:52
Speaker 1: those things are indicators.
24:54
Speaker 3: All of them.
24:55
Speaker 1: All the lettuces and all of the petrols are indicators.
24:59
Speaker 1: But they're genuine indicators of recession because we are in
25:03
Speaker 1: a situation where our product and our ability to supply
25:07
Speaker 1: product to the masses is not able to keep up
25:10
Speaker 1: with demand, and so things become astronomically expensive and they
25:15
Speaker 1: become really limited resources. And watching this happening is an
25:18
Speaker 1: indicator of recession. But you can also see how it
25:22
Speaker 1: might start to happen when there's global war and looking
25:27
Speaker 1: at what's going on in Russia invading Ukraine and how
25:31
Speaker 1: that's impacted the ability of product to flow around the world,
25:36
Speaker 1: and you see it in our industry right. Like, I'm
25:39
Speaker 1: probably a little bit more privy to this at the
25:41
Speaker 1: moment because as a lot of you know, I'm trying
25:43
Speaker 1: to renovate my house and it is so expensive. I'm
25:46
Speaker 1: talking to my build out and they're like, look, they
25:48
Speaker 1: we're going to be up for a minimum of thirty
25:50
Speaker 1: percent more because that's how much more product is worth now.
25:55
Speaker 1: So like timber, not that everybody else knows what this is.
25:58
Speaker 1: But timber prices have increased by a minimum of thirty percent.
26:02
Speaker 1: So now for me to build a wall, it is
26:04
Speaker 1: going to be thirty percent more. That is putting significant
26:07
Speaker 1: pressure one on my budget, but on everybody else's budget. Like,
26:12
Speaker 1: think about the building industry and how many contracts have
26:15
Speaker 1: been signed to you know, build your metricron home that's
26:17
Speaker 1: now costing them more. And there are these contracts where
26:20
Speaker 1: they're like, great, I signed this contract. It's now going
26:24
Speaker 1: to cost that business far more. That's going to significantly
26:27
Speaker 1: impact that business negatively. So it's kind of like a
26:30
Speaker 1: snowball and you pick up small things along the way,
26:33
Speaker 1: and small things become big things, and that big thing
26:35
Speaker 1: happens to be the recession.
26:36
Speaker 3: So it sounds like it's basically a perfect storm.
26:39
Speaker 2: Right.
26:39
Speaker 3: We've had the bushfires to kick us off, then we
26:42
Speaker 3: had two years of lockdowns, a pandemic that ended so
26:45
Speaker 3: many lives and impacted so many lives around the world. Yep,
26:48
Speaker 3: and now we have a war happening in Ukraine.
26:51
Speaker 1: It's insane. Yeah, the world is insane. But essentially, and unfortunately,
26:56
Speaker 1: recessions are considered a very unavoidable part of business. And
27:01
Speaker 1: of the business cycle. As we mentioned before, we have
27:04
Speaker 1: been through recessions before. We will come out the other side.
27:08
Speaker 1: But yeah, there are some negative things that are going
27:10
Speaker 1: to come out of it, and people are going to
27:12
Speaker 1: suffer through this because not everyone is going to get
27:15
Speaker 1: away with it's got free. But essentially it's kind of
27:18
Speaker 1: like the expansion and contraction of the market and working
27:21
Speaker 1: out like if you grow too fast, your bubble's probably
27:24
Speaker 1: going to pop, and that's kind of what's happening here.
27:28
Speaker 3: Well, just on a light note, like light when we
27:33
Speaker 3: come out the other side, is it going to be
27:35
Speaker 3: like the Flapper era popping on our dresses? It's going
27:40
Speaker 3: to be great, said my mind's gone. It's going to
27:43
Speaker 3: be good eventually.
27:44
Speaker 1: Yes and no, Yes and no, shut me out. Sorry, sorry,
27:48
Speaker 1: Georgia King. I don't think we are going to be
27:51
Speaker 1: going into the flapper era again.
27:52
Speaker 3: I'm going back.
27:53
Speaker 1: Okay, Well I can go to the party. Actually, I've
27:57
Speaker 1: recently moved into a rental property, as you guys know,
27:59
Speaker 1: perfect to hold a flapper parties to it. Let's see
28:02
Speaker 1: it there. It was my birthdate. We hate to haven't
28:03
Speaker 1: had a proper party. We we'll get onto that. Really
28:06
Speaker 1: but when we're talking about timelines, I think it's important
28:09
Speaker 1: to educate you on that. Did you know that the
28:11
Speaker 1: average recession lasts eleven months? So if we look at
28:16
Speaker 1: the average lengths of recessions from nineteen forty five until
28:20
Speaker 1: two thousand and nine cough that was when our last
28:22
Speaker 1: one was, the average recession actually lasts about eleven months,
28:26
Speaker 1: or let's call it a year. And that is kind
28:28
Speaker 1: of scary because we're not talking about like, oh, gee,
28:31
Speaker 1: it'll just be a couple of months. Like eleven months
28:33
Speaker 1: is a long time, Like that is longer than just
28:37
Speaker 1: making a baby. Is that a good measure of time?
28:40
Speaker 3: Sure?
28:40
Speaker 1: I feel like it's too masure of time. It's a
28:43
Speaker 1: really good measure of time. I literally use the time
28:46
Speaker 1: it takes to create human life as a measure of things.
28:49
Speaker 3: It is quite good.
28:50
Speaker 1: Like if someone says, oh, three months, I'm like, oh,
28:53
Speaker 1: that's like baby is cooked. Yeah. Literally, if someone's like
28:56
Speaker 1: ten months, I'm like, guys, that's so long you could
28:59
Speaker 1: literally create human in that period of time.
29:01
Speaker 3: Interesting, it's not as long as I thought, recession wise.
29:05
Speaker 3: But you saying that a recession typically lasts for eleven months,
29:09
Speaker 3: does that mean we can predict these kinds of things
29:12
Speaker 3: if we understand that, like why can't we you know
29:14
Speaker 3: what I'm saying.
29:15
Speaker 1: Look uncertain. So given that economic forecasting is uncertain, like
29:21
Speaker 1: I've said it before on the podcast, like, if I
29:23
Speaker 1: could predict the shell markets, sir, I'd be rich and
29:26
Speaker 1: I wouldn't have to do this podcasts No.
29:28
Speaker 3: I did do it anyway, because you love it.
29:30
Speaker 1: I literally do. I did this when I wasn't being paid,
29:33
Speaker 1: and now I'm being paid. I'm like, this is great, guys,
29:35
Speaker 1: But no, you can't predict it in a really easy way,
29:38
Speaker 1: in the same way you could predict when you're able
29:40
Speaker 1: to see Mars in the sky. Right. But there are
29:43
Speaker 1: a few things that were tell tale signs, and we've
29:46
Speaker 1: spoken about them. Bushfires, coronavirus, war like, all of these
29:50
Speaker 1: things add up to economists going there's probably gonna be
29:55
Speaker 1: a recession at some point, but there are some indicators
29:58
Speaker 1: or warning signs that can give you a little bit
30:00
Speaker 1: more time to figure out how to plan for a
30:03
Speaker 1: recession or when one is coming. So the first again
30:07
Speaker 1: financial advisor had is being put on an inverted yield cycle.
30:11
Speaker 1: So a yield cycle is a graph that essentially plots
30:14
Speaker 1: market value or the yield. So yield is essentially how
30:18
Speaker 1: much money it makes. And when an economy is functioning normally,
30:21
Speaker 1: yield should be higher on long term bonds and you know,
30:24
Speaker 1: solid assets. But when long term yields are lower than
30:28
Speaker 1: short term yields, so when long term cash coming in
30:31
Speaker 1: is lower than short term cash coming in, it shows
30:34
Speaker 1: investors are a little bit worried about recession. So it
30:37
Speaker 1: means that they're you know, not putting so many eggs
30:40
Speaker 1: in so many baskets. They're holding their cards a little
30:42
Speaker 1: bit closer to their chests. And this is like quote,
30:45
Speaker 1: a phenomenon known as a yield curve inversion. And as
30:49
Speaker 1: a financial advisor, I obviously look at this and I go, okay, cool,
30:53
Speaker 1: that makes sense. I read the textbook. But economists will
30:56
Speaker 1: look at that and go, hey, this has been something
30:59
Speaker 1: that has happened before every single recession that has ever happened.
31:04
Speaker 1: The next is declining consumer confidence. So consumer confidence is
31:08
Speaker 1: like how willing you are to buy stuff? Like right now? Gee,
31:11
Speaker 1: if I said got and invest, you'd be like, ah,
31:13
Speaker 1: but the market's down, like not sure if I want
31:15
Speaker 1: to do that? And this is able to be measured
31:18
Speaker 1: with consumer spending. So if surveys that are done on
31:22
Speaker 1: you know, what Australians and what Americans are spending shows
31:26
Speaker 1: us sustained dropping consumer confidence, it could be a sign
31:30
Speaker 1: that we're going into some economic trouble. So essentially, people
31:34
Speaker 1: are spending less because they're trying to save more money
31:36
Speaker 1: because they're a little bit apprehensive of the future. Another
31:40
Speaker 1: is a sudden stock market decline, so we have just
31:44
Speaker 1: seen that and ours was a result of inflation. And
31:47
Speaker 1: then the other is rising unemployment. And we mentioned this before,
31:51
Speaker 1: but it essentially goes without saying that if people are
31:53
Speaker 1: losing their jobs, it's a pretty bad sign for the economy.
31:56
Speaker 1: Like that ain't a good thing. And just a few
31:58
Speaker 1: months of pretty steep job losses is a pretty good
32:02
Speaker 1: indicator that there is an imminent recession, because that is businesses.
32:06
Speaker 1: It's not because people are not willing to work and
32:08
Speaker 1: they're all going on holiday and not coming back. It's
32:10
Speaker 1: because businesses are being a little bit more apprehensive and
32:13
Speaker 1: they're less likely to hire. They might go, gee, like,
32:16
Speaker 1: I know we want to expand, but maybe let's put
32:18
Speaker 1: this off another quarter or another six months. So there's
32:21
Speaker 1: less jobs in the job market in saying that that's
32:24
Speaker 1: quite contradictory to the information that she's on the money's
32:27
Speaker 1: been talking about about the great resignation, right, like everyone's
32:30
Speaker 1: getting a new job and it's really great. But that
32:33
Speaker 1: is actually a really entitled view because that's for educated people,
32:38
Speaker 1: not for the workers that usually lose their jobs during
32:41
Speaker 1: a recession. If that makes sense.
32:43
Speaker 3: Yeah, yeah, So v back to the bear market situation
32:47
Speaker 3: where we currently are existing. Is there a particular type
32:50
Speaker 3: of stock that people are fearfull of buying that they're
32:53
Speaker 3: pulling out, that they're losing faith in or is it
32:56
Speaker 3: lost the board?
32:57
Speaker 1: I don't think people are losing faith in it, you
32:59
Speaker 1: drama queen.
33:00
Speaker 2: You.
33:00
Speaker 1: I mean, this is some scary shit, but it's one
33:05
Speaker 1: of those things where I don't think people are losing faith,
33:08
Speaker 1: but they are less likely to buy things that are
33:12
Speaker 1: not stockstanded. So this is where blue chip shares shine.
33:16
Speaker 1: And I've spoken about it before, but essentially a blue
33:19
Speaker 1: chip share is a share with a national or international
33:22
Speaker 1: reputation of equality, reliability, and the ability to operate profitably
33:27
Speaker 1: in good and bad times. And that's where people fall
33:30
Speaker 1: back on industries that are going to stand the test
33:34
Speaker 1: of time, Wollice Coals banks things that are essential for
33:39
Speaker 1: the operation of our economy and less likely to invest
33:43
Speaker 1: in things that are a little bit more frivolous. So
33:45
Speaker 1: like people often end up pulling back on things like
33:48
Speaker 1: tech where they're like, oh, I don't need that so much,
33:50
Speaker 1: but I will invest in something that I know is
33:52
Speaker 1: tried and true. In saying that, something that I think
33:55
Speaker 1: you're going to find really interesting is the lipstick effect.
33:58
Speaker 1: Have you heard of this before?
34:00
Speaker 3: Uh? No, No, that was I was trying to think of.
34:04
Speaker 3: I'm assuming it means like making something look glossier than
34:08
Speaker 3: it is.
34:08
Speaker 1: Oh that's cute. No, but it's not it at all.
34:10
Speaker 1: But like, that's actually a really good analogy of it.
34:13
Speaker 1: I thought you were going to be like the I
34:14
Speaker 1: don't wear makeup, don't like lipstick, not gonna happen. Not wrong,
34:18
Speaker 1: but it's quite interesting. So the lipstick effect is the
34:21
Speaker 1: theory that when facing an economic crisis, consumers and people
34:24
Speaker 1: are more likely to buy less costly luxury goods. So
34:28
Speaker 1: instead of like buying designer bags and shoes and stuff like,
34:31
Speaker 1: we're more likely to go and make ourselves feel better
34:34
Speaker 1: with small purchases like lipstick. Interesting, and this is where
34:39
Speaker 1: cosmetic companies thrive during a recession, which I probably bet
34:43
Speaker 1: you didn't see coming.
34:43
Speaker 3: So invest in Mecca is our advice today.
34:46
Speaker 1: I will absolutely be doing that today and every day.
34:50
Speaker 1: In fact, low key, I'm a little bit salty. Lost
34:53
Speaker 1: by level three.
34:54
Speaker 3: I don't know what that means.
34:55
Speaker 1: Okay, well, if you know, you know, Just to be super.
34:59
Speaker 3: Clear there, don't invest in Mecca. Do it if you want,
35:01
Speaker 3: but we're certainly not telling you to because this is
35:03
Speaker 3: not about financially.
35:04
Speaker 1: I mean, invest in the products from Mecca. I'm sure
35:09
Speaker 1: ten out of ten, kiss me stunning.
35:12
Speaker 3: Back to it. We're about to wrap up, so I
35:15
Speaker 3: want to You're going to rap fish, I'm gonna I'm
35:17
Speaker 3: gonna start playing the Oscars music. I'm mean to end
35:20
Speaker 3: it selfishly. How does this impact me personally? How does
35:25
Speaker 3: it impact people community? What does this mean?
35:29
Speaker 1: I mean, I could be really dramatic and be like,
35:31
Speaker 1: you're at risk of losing your job, not you, Georgia King,
35:33
Speaker 1: because we will continue to make content forever. But unemployment
35:37
Speaker 1: levels are rising, and I think that it is important
35:40
Speaker 1: to be quite aware of that and quite aware of
35:42
Speaker 1: your education and what you're doing in case that job
35:46
Speaker 1: is not as sustainable or as stable as you might
35:49
Speaker 1: think it is. So not only is our community feels
35:53
Speaker 1: so bad, but not only is our community much more
35:55
Speaker 1: likely to lose their current job, it's going to be
35:57
Speaker 1: harder to find a job replacement since more people are
36:00
Speaker 1: out of work and looking for a job at the
36:02
Speaker 1: same time. So it's a very competitive environment to be
36:04
Speaker 1: and if you're looking for a new role, So people
36:07
Speaker 1: who are keeping their jobs, they might see no pay rises.
36:10
Speaker 1: So as much as inflation's going up and we have
36:12
Speaker 1: this expectation that our employers will meet that level of inflation,
36:16
Speaker 1: they might not be able to afford to do so,
36:19
Speaker 1: and it might make it harder for you to negotiate
36:22
Speaker 1: further pay rises, which obviously actually's on the money. We're
36:25
Speaker 1: always like, no, you're worth but also, let's read the room,
36:28
Speaker 1: and let's see how hard it is for our actual community. Right,
36:31
Speaker 1: So it's going to be really dependent on the type
36:33
Speaker 1: of business that you're in. You might be thriving, you
36:35
Speaker 1: might get a massive pay rise. In a lot of
36:37
Speaker 1: industries that might not be as possible. Investments like shares
36:42
Speaker 1: and bonds and real estate is probably going to be
36:45
Speaker 1: valued less which could be a blessing or it could
36:48
Speaker 1: be a curse. Like if that's your investment and you're
36:51
Speaker 1: looking at it going, oh my gosh, my ship football.
36:53
Speaker 1: It's worth so much less. Not a good thing. It
36:56
Speaker 1: will recover, It's okay, don't stress. But it also could
37:00
Speaker 1: be a great opportunity if some people in our community
37:03
Speaker 1: have been hustling and hustling to get their home deposit together.
37:06
Speaker 1: And I'm hoping this is how it works out for
37:07
Speaker 1: miss Jizicarucci. Property is going to be hopefully a little
37:11
Speaker 1: bit cheaper, a little bit more affordable, a little bit
37:14
Speaker 1: more accessible. Like I mean, surely everybody is seeing that coming.
37:18
Speaker 1: Given avocados are what a dollar twenty at the supermarket.
37:21
Speaker 1: Thing that I'm not that's true. If we can afford
37:24
Speaker 1: avocados at that price, surely soon millennials will be taking
37:28
Speaker 1: over the property market. So that is going to happen. Obviously,
37:32
Speaker 1: when we see downturn in the share price, it means
37:36
Speaker 1: that our retirement savings are going to look a little
37:39
Speaker 1: less sexy. If you're in that situation where you are
37:43
Speaker 1: planning for retirement, definitely speak to a financial advisor or
37:47
Speaker 1: organize your financial affairs to be a little bit more stable. Unfortunately,
37:53
Speaker 1: if you're in a situation where you know the prospect
37:56
Speaker 1: of losing your job is real, it might make paying
37:59
Speaker 1: bills really hard. It might make you know, keeping the
38:02
Speaker 1: mortgage repayments up really challenging. And I think that that's
38:05
Speaker 1: where to day and every day I'm a stauncher advocate
38:09
Speaker 1: of an emergency fund, but I think now more than ever,
38:12
Speaker 1: it's just really important to have that in your back pocket.
38:14
Speaker 1: Or even if you're in the privileged position of being
38:17
Speaker 1: able to beef it up a little bit more, I
38:19
Speaker 1: absolutely would consider that because it's so important. As a
38:23
Speaker 1: business owner. I know there are lots of business owners
38:25
Speaker 1: in the Shees on the Money community because a little
38:27
Speaker 1: while ago we did a census and twenty percent of
38:30
Speaker 1: people said they were either a business owner or a
38:32
Speaker 1: side hustler. Really really cool, and thankfully in Australia we
38:36
Speaker 1: are in again a very privileged country where during a
38:39
Speaker 1: recession our government usually tries very hard to support small businesses.
38:44
Speaker 1: But small businesses are more likely to feel the brunt
38:47
Speaker 1: of it, purely because people are like spending less and
38:52
Speaker 1: small businesses are more likely to feel that because they're
38:55
Speaker 1: already harder to access, right, I think understanding what a
38:59
Speaker 1: bear market is and what preparing for a recession actually means.
39:03
Speaker 1: But I think that all of the things that I'm
39:05
Speaker 1: recommending are actually thinks we should be doing, regardless of
39:09
Speaker 1: the economic situation, to put ourselves in the best possible
39:12
Speaker 1: financial situation. So I don't want to end this on
39:15
Speaker 1: a oh my gosh, everything's going up the wall, like
39:17
Speaker 1: this isn't good at all, Like it is what it is.
39:20
Speaker 1: We went through a market correction earlier this year when
39:23
Speaker 1: it went down by ten percent. We're now at twenty
39:25
Speaker 1: two percent, and it's been labeled a bear market. It's
39:28
Speaker 1: not as scary as you think it is. The market
39:30
Speaker 1: always recovers. If you are in doubt, zoom out and
39:33
Speaker 1: have a look at the bigger picture and see what
39:35
Speaker 1: every other market recovery has looked like and how long
39:39
Speaker 1: that takes. But there is always light at the end
39:42
Speaker 1: of the tunnel, and this is just how economics works perfectly.
39:45
Speaker 3: Well, I'm feeling a little bit less frightened than I
39:48
Speaker 3: was at the start, So thank you so much for
39:50
Speaker 3: explaining it all, making it a little bit more understanding.
39:52
Speaker 1: I've loved this chat. Though, let's do an entire one
39:55
Speaker 1: on a recession and the GFC and all of this.
39:57
Speaker 1: Do you think people want us excited? My d that
40:00
Speaker 1: absolutely what you want us to do, I mean, also
40:02
Speaker 1: makes my content planning a lot easier.
40:04
Speaker 3: That's true.
40:04
Speaker 1: That is true.
40:05
Speaker 3: Thank you, boring but important stuff. Go for it, do
40:07
Speaker 3: it alrighty guys. Please remember that the advice shared on
40:10
Speaker 3: She's on the Money is general in nature and does
40:13
Speaker 3: not consider your individual circumstances.
40:15
Speaker 1: Except for when buying nas Shigo.
40:17
Speaker 3: Ten out of ten. She's on the Money exists purely
40:20
Speaker 3: for educational purposes and should not be relied upon to
40:23
Speaker 3: make an investment or a financial decision. And we promise
40:26
Speaker 3: Victoria Divine and She's on the Money are authorized representatives
40:30
Speaker 3: in Focus Securities Australia Proprietary Limited, ABIAN four seven zero
40:34
Speaker 3: nine seven seven nine seven zero four nine AFSL two
40:37
Speaker 3: three six five two three. And please guys join us
40:40
Speaker 3: in the Facebook community if you're not there already, especially
40:43
Speaker 3: if you're feeling really daunted at the moment. It's the
40:45
Speaker 3: safest place and there's going to be a lot of
40:47
Speaker 3: girls in there that are feeling the same way, and
40:49
Speaker 3: we can all support each other.
40:50
Speaker 1: See her on Friday.
40:51
Speaker 3: My Love bye guys,