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DeepSeek, Trump’s Tariffs & Interest Rates: Investing Smarter in 2025 · She's On The Money

0:00
Speaker 1: Hello, my name's Santasha Nabananga Bamblet. I'm a proud yor
0:04
Speaker 1: the Order Kerni Whoalbury and a waddery woman. And before
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Speaker 1: we get started on She's on the Money podcast, I
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Speaker 1: would like to acknowledge the traditional custodians of the land
0:14
Speaker 1: of which this podcast is recorded on a wondery country,
0:18
Speaker 1: acknowledging the elders, the ancestors and the next generation coming
0:22
Speaker 1: through as this podcast is about connecting, empowering, knowledge sharing
0:27
Speaker 1: and the storytelling of you to make a difference for
0:30
Speaker 1: today and lasting impactful tomorrow.
0:33
Speaker 2: Let's get into it.
0:34
Speaker 3: She's on the Money, She's on the Money.
0:57
Speaker 2: Hello, and welcome to She's on the Money.
1:00
Speaker 3: So podcast that helps you master your money without feeling
1:02
Speaker 3: like you need to go and get a finance degree.
1:05
Speaker 3: If you've been watching the headlines and thinking v what
1:08
Speaker 3: is the deal with the deep seat AI drama and
1:11
Speaker 3: how are Trump's Tarif's going to shake things up? And
1:14
Speaker 3: what's really happening with interest rates, my friend, you are
1:17
Speaker 3: in exactly the right location.
1:20
Speaker 2: Welcome.
1:21
Speaker 3: My name is Victoria Devine and I am a retired
1:24
Speaker 3: financial advisor who used to help hundreds of clients make
1:28
Speaker 3: millions of dollars through investing. Now, the twenty twenty five
1:32
Speaker 3: share market has been off to an eventful start, much
1:35
Speaker 3: like TikTok has this year, with AI breakthroughs, global trade tensions,
1:40
Speaker 3: and a looming Australian election that's going to shake a
1:43
Speaker 3: lot of things up. I don't want you to start stressing, though.
1:47
Speaker 3: I'm here and I'm going to be breaking down in
1:49
Speaker 3: plain English, with no finance degree required, exactly what's going
1:54
Speaker 3: on so that you can feel confident about what's ahead
1:56
Speaker 3: and what that might mean for your investments. So let's
2:00
Speaker 3: start with what I would say has everybody online talking.
2:03
Speaker 2: Let's dive into deep Seek.
2:05
Speaker 3: So this is a Chinese AI technology company that is
2:09
Speaker 3: absolutely shaking up what's going on in the AI space,
2:13
Speaker 3: and I would go as far as saying it has
2:15
Speaker 3: turned AI or artificial intelligence absolutely on its head, and
2:20
Speaker 3: it's making serious waves in the share market. It's actually
2:23
Speaker 3: wiped one trillion dollars off the value of leading tech companies.
2:29
Speaker 2: That's a lot.
2:30
Speaker 3: We're not talking millions or billions, we're talking trillions. So
2:33
Speaker 3: for years, Navidia, if you've heard of it, great if
2:36
Speaker 3: you haven't, it's essentially been the backbone of the stock
2:39
Speaker 3: market internationally and the backbone of AI. I would say
2:44
Speaker 3: it's basically been what's supplying the really powerful GPU chips
2:50
Speaker 3: to companies like open Ai, who are the people who
2:52
Speaker 3: own chat GPT and Anthropic which is clawed, who rely
2:56
Speaker 3: on these chips to be able to train their AI models.
3:00
Speaker 3: So thanks to AI reliance, Navidia has become essentially a
3:04
Speaker 3: stock market giant, and its stock price has been absolutely
3:08
Speaker 3: soaring because the demand for the chips has been increasing,
3:11
Speaker 3: like it's absolutely skyrocketed, and investors saw it at the
3:15
Speaker 3: time as a really great way and arguably the best
3:19
Speaker 3: way to be profiting from AI's growth. But then here's
3:24
Speaker 3: how deep Seek, which is what we're going to talk
3:26
Speaker 3: about today, has changed the game. Unlike it's competitors, so
3:29
Speaker 3: Chat GPT essentially, which needed sixteen thousand Navidia H one
3:34
Speaker 3: hundred chips to train their AI models, Deep Seek has
3:39
Speaker 3: managed to build a very competitive AI using only two
3:43
Speaker 3: thousand Navidia H eight hundred GPUs, which is essentially a
3:48
Speaker 3: fraction of the resources. So they're doing more with less,
3:51
Speaker 3: and this has challenged the assumption that AI companies are
3:55
Speaker 3: always going to need massive amounts of Navidia chips, which
3:58
Speaker 3: has now started raise concerns understandably for what the future
4:03
Speaker 3: demand of Navidia's hardware is actually going to be. And
4:06
Speaker 3: the result of this is Navidia lost six hundred million
4:10
Speaker 3: dollars and seventeen percent because investors they started questioning whether
4:15
Speaker 3: it's dominance in the AI space was, as I guess,
4:19
Speaker 3: unshakable as we once thought it was. It did bounce
4:22
Speaker 3: back by eight percent the next day, but that's actually
4:25
Speaker 3: a really good example of market sentiment. So it's a
4:28
Speaker 3: good example of how our emotions drive the share market
4:33
Speaker 3: and how we need to be really careful of that
4:35
Speaker 3: because obviously Navidia is still a company that is needed.
4:38
Speaker 3: But when some marketing comes out or when some news
4:42
Speaker 3: comes out about oh, this might not be that relevant,
4:44
Speaker 3: the share market jumps. And by that I mean investors
4:47
Speaker 3: like you and I might go, oh my gosh, like
4:50
Speaker 3: I own Navidia, should I sell? I've gotten a little
4:52
Speaker 3: bit stressed, and I do start to sell. And that's
4:55
Speaker 3: what happened. Essentially, people got a little bit stressed. They decided, Okay,
4:59
Speaker 3: now this new information has come out, I'm going to sell.
5:02
Speaker 3: And the result of that was people sold six hundred
5:05
Speaker 3: million dollars worth of their share on that day, and
5:08
Speaker 3: that meant a seventeen percent loss in the share market
5:11
Speaker 3: price of Navidia. So that is a really important thing
5:15
Speaker 3: to understand as well, that a drop like that is
5:18
Speaker 3: not necessarily reflective of whether the company's doing well or
5:22
Speaker 3: not doing well. It's just reflective of how people are
5:24
Speaker 3: feeling about it, right, which is obviously still important to
5:27
Speaker 3: take into consideration. And I guess another thing when it
5:32
Speaker 3: comes to deep Seek making waves. Unlike chat, GPT and
5:36
Speaker 3: other AI tools that essentially operate behind paywalls because you
5:40
Speaker 3: need to pay for these things, deep Seek is what's
5:42
Speaker 3: called completely open source, and this means that anyone can use, modify,
5:48
Speaker 3: or improve its AI models. So instead of it being
5:52
Speaker 3: you know, this is our product, we are obviously going
5:54
Speaker 3: to let you use it. You can pay for it,
5:55
Speaker 3: but we're not going to let you in to our codes.
5:59
Speaker 3: They're letting everybody into the codes, and developers and businesses
6:03
Speaker 3: can build AI applications without expensive licensing fees.
6:07
Speaker 2: So other companies.
6:08
Speaker 3: Historically might go to chat, GPT and say, hey, this
6:10
Speaker 3: is a fantastic product, we'd love to use the model
6:13
Speaker 3: and the technology and what you've built for this very
6:16
Speaker 3: specific purpose. It's not working like that. They're just giving
6:19
Speaker 3: it out for free. You can do whatever you would like.
6:21
Speaker 3: So AI advancements in different sectors, so healthcare, in finance,
6:26
Speaker 3: and education could essentially accelerate much faster than they have
6:30
Speaker 3: before because instead of having to build their own, they're
6:35
Speaker 3: just being.
6:35
Speaker 2: Gifted with it.
6:36
Speaker 3: So in short, Deep Seek isn't actually just competing with
6:40
Speaker 3: AI companies like the company who owns chat GPT. It's
6:44
Speaker 3: actually changing inherently the way that AI is completely developed
6:49
Speaker 3: and making it more accessible worldwide, which I think is
6:52
Speaker 3: low key, very cool and just when you thought AI
6:56
Speaker 3: couldn't get more dramatic, Trump enters the chat.
7:00
Speaker 2: The new US president.
7:02
Speaker 3: Has essentially rolled out a very bold new AI plan
7:06
Speaker 3: that is designed to keep America at the very top
7:09
Speaker 3: of the food chain. But he's planning on pumping even
7:13
Speaker 3: more money into lots of AI research. He's said that
7:16
Speaker 3: he's planning on ramping up domestic chip production so that
7:20
Speaker 3: people don't have to import them from places like China,
7:24
Speaker 3: and he's also planning on putting tighter restrictions on the
7:27
Speaker 3: ability to import things from China and Russia to Australia
7:33
Speaker 3: and on top of that, and I feel like this
7:35
Speaker 3: is a little bit hypocritical, but that's my personal opinion.
7:38
Speaker 3: His administration is also weaving AI into their national security
7:43
Speaker 3: and into their defense force at the same time as
7:46
Speaker 3: them pushing for tighter restrictions to keep things in check
7:49
Speaker 3: for everybody else.
7:51
Speaker 2: But what does that actually mean. It means that the.
7:54
Speaker 3: AI race is heating up, it's getting quicker, and these
7:57
Speaker 3: moves could actually shake up the industry in a really
8:01
Speaker 3: big way. So if you weren't already watching AI closely
8:05
Speaker 3: or using it yourself, I would say that now is
8:07
Speaker 3: the time to start familiarizing yourself with it and understanding it,
8:11
Speaker 3: because it's just going to become more and more prominent.
8:15
Speaker 3: And AI isn't the only thing making headlines.
8:18
Speaker 2: Obviously.
8:18
Speaker 3: Global trade tensions have completely ramped up, and Trump's latest
8:23
Speaker 3: move could actually have really big implications for markets worldwide,
8:27
Speaker 3: including here in Australia. We've all heard of his tariffs.
8:31
Speaker 3: He's talking about tariffs. He's going to implement tariffs al
8:34
Speaker 3: though they're helping Americans, and it actually makes me want
8:38
Speaker 3: to jump through the screen and shake him and ask
8:41
Speaker 3: the question, do you even know what a tariff is.
8:42
Speaker 2: Trump like, at the.
8:44
Speaker 3: End of the day, implementing tariffs, you are actually impacting
8:49
Speaker 3: your citizens negatively, like it's going to cost them more.
8:53
Speaker 3: But what does a tariff actually mean for investors? And
8:57
Speaker 3: how could it actually impact industries that we are investing in,
9:00
Speaker 3: like mining and tech and manufacturing. I'm going to break
9:03
Speaker 3: it all down before I get a little bit two heated.
9:06
Speaker 3: We're going to go to a really quick break and
9:07
Speaker 3: on the flip side, we're going to be talking more
9:09
Speaker 3: about Trump's new tariffs. Welcome back to my friends. I'm
9:16
Speaker 3: so excited about this. Let's talk about Trump's tariffs because
9:20
Speaker 3: this isn't just like some political drama. It's actually something
9:24
Speaker 3: that can have really real consequences for global markets, including
9:29
Speaker 3: here in Australia. We've even seen the Prime Minister of
9:31
Speaker 3: Canada come out and openly say, great, if you guys
9:36
Speaker 3: are going to implement tariffs, we're also going to make
9:39
Speaker 3: it hard for you. Like America and Canada, we were friends,
9:42
Speaker 3: we had, you know, all of these trade agreements.
9:45
Speaker 2: No more.
9:46
Speaker 3: We are absolutely going to be cracking down on this,
9:48
Speaker 3: and things online are moving so quickly at the time
9:52
Speaker 3: that I'm recording this.
9:54
Speaker 2: Trump has announced tariffs on.
9:57
Speaker 3: Mexico, Canada, and China, and the Mexico and Canadian tariffs
10:01
Speaker 3: have been paused while negotiations are kind of taking place
10:04
Speaker 3: as he's expected to be in talks with China as well.
10:09
Speaker 2: And for me, this.
10:10
Speaker 3: Actually raises a lot of very serious and very valid
10:13
Speaker 3: concerns about how this is going to impact businesses and
10:17
Speaker 3: supply chains and essentially the share markets worldwide. So what
10:21
Speaker 3: do you need to know Apart from going, oh, v
10:23
Speaker 3: this is going to impact it great negative positive, we
10:25
Speaker 3: don't know. What you as an investor need to know
10:28
Speaker 3: is that markets don't like uncertainty. I was explaining that
10:32
Speaker 3: to you before when I was saying, oh my gosh,
10:34
Speaker 3: look how Navidia dropped in a day because something was announced.
10:38
Speaker 3: It made people uncomfortable. But markets they don't like uncertainty,
10:42
Speaker 3: and trade wars bring exactly that. Trade wars are all
10:46
Speaker 3: about uncertainty and it leads to a lot of volatility
10:50
Speaker 3: in the marketplace. So share prices you're going to see
10:52
Speaker 3: going up and down a lot more in the coming
10:56
Speaker 3: few weeks and months, and bigger price swings. There are
11:00
Speaker 3: industries that literally rely on global trade for their success.
11:06
Speaker 3: So things like tech and mining and manufacturing are very
11:10
Speaker 3: likely to take a massive hit in this space because
11:14
Speaker 3: tariffs are going to eat away at their profits. And
11:18
Speaker 3: if these companies have less profit, they have less for
11:22
Speaker 3: their shareholders, which means that your shareholder return is going down,
11:25
Speaker 3: which means that your shares aren't going to pay as
11:28
Speaker 3: bigger dividends. And they're also not going to increase in
11:31
Speaker 3: stock market value because people aren't as excited about buying
11:35
Speaker 3: a company that is paying them less right because it's
11:38
Speaker 3: not as secure, it's not as sexy. And then we
11:41
Speaker 3: also need to talk about the fact that rising tariffs
11:44
Speaker 3: could actually push inflation up, which at the moment when
11:48
Speaker 3: we're trying so hard to bat all the cost of
11:51
Speaker 3: living crisis and the current inflation rates, central banks might
11:56
Speaker 3: actually need to step in. So this is where you
11:58
Speaker 3: might hear a lot more from the RBA. Thankfully, we
12:02
Speaker 3: live in Australia, and in Australia our economy is actually
12:07
Speaker 3: relatively reflective of America, but it's.
12:10
Speaker 2: Usually pretty protected.
12:12
Speaker 3: So in comparison to America, we will feel things, but
12:15
Speaker 3: we will feel them a lot softer. So during times
12:19
Speaker 3: of economic turmoil, because of the way America is structured
12:22
Speaker 3: and it's a much bigger economy, they're going to feel
12:25
Speaker 3: it harder. And then by the time it gets to
12:27
Speaker 3: Australia and starts impacting our economy, it will negatively impact us,
12:32
Speaker 3: but it won't to the extent that you see in
12:34
Speaker 3: the US, and a good example of that is the GFC.
12:37
Speaker 3: So in two thousand and eight two thousand and nine,
12:39
Speaker 3: we saw obviously America absolutely crash and burn. The Australian
12:43
Speaker 3: stock market did react in a very similar way, but
12:47
Speaker 3: that had a lot to do with market sentiment, as in,
12:50
Speaker 3: it had a lot to do with how we were
12:52
Speaker 3: feeling seeing the marketing, seeing all of the news about
12:55
Speaker 3: what was going on. So we were being a lot
12:57
Speaker 3: more conservative, or we were selling our shares because we
13:00
Speaker 3: were worried as opposed to the companies that we are
13:03
Speaker 3: investing in Australia actually having less value. So it's important
13:07
Speaker 3: to remember that because a lot of the time investing
13:11
Speaker 3: is inherently emotional. So you're investing in something, you might
13:14
Speaker 3: pull back because you're like, oh, the markets are a
13:15
Speaker 3: little bit uncertain. That's actually a really good opportunity if
13:19
Speaker 3: you're in the position to double down. So that's essentially
13:22
Speaker 3: what I will be looking at and at the time
13:26
Speaker 3: of recording. So when I looked it up this morning,
13:28
Speaker 3: there's currently a ten percent tariff on China that's just
13:32
Speaker 3: been announced. Trump has said that that might be increased.
13:36
Speaker 3: So for Australia, I would say that this is especially
13:40
Speaker 3: important to hone in on because China is our biggest
13:43
Speaker 3: trade partner here in Australia and if the Chinese economy
13:47
Speaker 3: starts to slow down due to these tariffs, our mining
13:51
Speaker 3: sector could actually end up feeling the pain because of this.
13:56
Speaker 3: And it's important to understand that because we export bought
14:00
Speaker 3: a lot of our mind products, but we import a
14:03
Speaker 3: lot of Chinese actual consumable product. China's economy was actually
14:07
Speaker 3: already slowing down in twenty twenty four. It was struggling
14:11
Speaker 3: with a property market crisis. They had relatively weak consumer spending,
14:16
Speaker 3: which we did as well, and they had a decline
14:19
Speaker 3: in manufacturing and their exports. And this downturn actually hit
14:23
Speaker 3: Australia's mining sector pretty hard. So companies like BHP and
14:28
Speaker 3: Rio Tinto were feeling the pressure and that was definitely
14:31
Speaker 3: reflective in their share market price. Now bringing it back
14:36
Speaker 3: to Trump's tariffs. Trump's tariffs are I would say, adding
14:40
Speaker 3: a lot more strain, and if China's economy slows even more,
14:46
Speaker 3: I would say that demand for Australian resources is going
14:49
Speaker 3: to take another hit. It's going to step back. They're
14:52
Speaker 3: not able to afford our stuff, which could mean continued
14:55
Speaker 3: pressure on mining stocks and mining shares. And it's just
14:59
Speaker 3: so I think that we need to be aware of,
15:01
Speaker 3: not something that we need to jump and worry about
15:03
Speaker 3: if you own these companies, because as we know, the
15:07
Speaker 3: mining sector and all sectors in Australia EBB and flow.
15:12
Speaker 3: It's also important to note that China has announced stimulus
15:15
Speaker 3: measures to boost its economy, so obviously you might not
15:18
Speaker 3: be privy to that. I am because I'm always in
15:20
Speaker 3: the markets and I'm always looking at global news. But
15:23
Speaker 3: they've been a little bit smaller than expected, which has
15:26
Speaker 3: left a lot of investors questioning whether it's actually enough
15:30
Speaker 3: of a stimulus to turn things around and actually have
15:33
Speaker 3: the impact that they set out to have. And since
15:36
Speaker 3: China's demand for Australian resources, honestly it's a really big leck.
15:40
Speaker 3: I would say it's one of the top drivers of
15:43
Speaker 3: the Australian economy. Both investors and businesses are going to
15:48
Speaker 3: be watching really closely to see how this plays out,
15:51
Speaker 3: especially if you own mining stocks like BHP or Rio Tinto.
15:55
Speaker 3: Let's come a little bit closer to home, though, like
15:57
Speaker 3: let's talk a little bit more about Australia or I
16:00
Speaker 3: do think it's really interesting how global economies impact our economy.
16:05
Speaker 2: And I feel like a lot of people think.
16:07
Speaker 3: Oh my gosh, yep, we export and then we import,
16:09
Speaker 3: Like why would demand for our exports change. It's a
16:15
Speaker 3: lot deeper than just what does that look like, because
16:19
Speaker 3: obviously if China's economy is slowing, they don't need as
16:23
Speaker 3: many resources to build new infrastructure, to build houses, to
16:26
Speaker 3: do all of these things. And it does genuinely impact us.
16:30
Speaker 3: And it doesn't just impact us in terms of share price,
16:33
Speaker 3: but more sustained share price reduction. Anyway, I promised. Back
16:38
Speaker 3: closer to home, let's talk about interest rates. A lot
16:41
Speaker 3: of people are dming me about interest rates. You guys know,
16:44
Speaker 3: I own Zella Money, which is a mortgage breaking business.
16:46
Speaker 3: So I'm talking literally every single day what an interest
16:49
Speaker 3: rate's going to do, How are interest rate's going to change,
16:52
Speaker 3: what's the RBA going to be doing. At the time
16:54
Speaker 3: of recording, the RBA hasn't announced their interest rate reduction.
17:00
Speaker 3: I'm fully anticipating an interest rate reduction. Just to be clear,
17:03
Speaker 3: this is being recorded early. So if it happened, told
17:06
Speaker 3: you so. If it didn't, I take all of it back.
17:09
Speaker 3: But last week NAB actually announced that they were dropping
17:13
Speaker 3: mortgage rates, which is a big move because the RBA
17:19
Speaker 3: hasn't actually made a move yet. NAB but just so
17:22
Speaker 3: confident that the RBA is going to be reducing the
17:25
Speaker 3: cash rate, which I would say is a very strong
17:29
Speaker 3: sign that banks across the board are very privy to
17:33
Speaker 3: the idea that there is going to be an official
17:36
Speaker 3: rate cut very soon, and with inflation easing which we
17:40
Speaker 3: are seeing, and obviously the banks are relatively confident that
17:43
Speaker 3: that's what's happening. Lowering interest rates could actually boost different
17:47
Speaker 3: parts of our market in some pretty unexpected but also
17:51
Speaker 3: expected ways. So firstly, property I feel like as a
17:55
Speaker 3: no brainer. Lots of people are you know, finger on
17:57
Speaker 3: the pulse with that one because it impacts us literally individually.
18:01
Speaker 3: But lower mortgage rates make money borrowing cheaper, which means
18:06
Speaker 3: that more people are going to be in a position
18:09
Speaker 3: to borrow more money but also buy homes or upgrade
18:13
Speaker 3: their current home to a better home. And that's actually
18:16
Speaker 3: a really good thing for our economy because it restimulates
18:20
Speaker 3: the economy. But also real estate companies developers ariits because
18:25
Speaker 3: demand for property could actually push stock prices, so it
18:29
Speaker 3: could push home prices higher in that space. And I
18:33
Speaker 3: know we don't want more expensive homes, but the idea
18:36
Speaker 3: that the home is more expensive is usually reflective of
18:39
Speaker 3: the fact that money is cheaper to get your hands on,
18:42
Speaker 3: and that's not necessarily a bad thing because if money
18:45
Speaker 3: is cheaper to get your hands on and housing prices
18:48
Speaker 3: are a little bit more expensive, Yeah, we don't like
18:50
Speaker 3: the idea that we're spending more money, but it's actually
18:52
Speaker 3: reflective of a very healthy and thriving economy, and that's
18:55
Speaker 3: what we want. When it comes to retail and consumer
18:59
Speaker 3: share that they could also benefit. So if homeowners aren't
19:03
Speaker 3: spending as much on their mortgage repayments, they have more
19:06
Speaker 3: discretionary cash, right, Like you can actually afford to go
19:10
Speaker 3: out for a drink after work, you can actually spend
19:13
Speaker 3: some more money on shopping or dining or even talking
19:16
Speaker 3: about travel again, if that was completely off the cards
19:19
Speaker 3: for you, and that gives us a really good boost
19:23
Speaker 3: to our retail sector. It gives us a boost to
19:27
Speaker 3: entertainment and even tourism shares. And of course we're talking
19:30
Speaker 3: about tech earlier, but tech benefits here as well. So
19:34
Speaker 3: investors often and you, guys, I know you well, you
19:37
Speaker 3: love a growth share. Investors in general often favor growth
19:41
Speaker 3: shares or growth assets like tech companies. And when interest
19:45
Speaker 3: rates fall, because borrowing has become cheaper and you're able
19:49
Speaker 3: to lend money at less of a rage, these companies
19:53
Speaker 3: actually invest more because they're able to access more money
19:56
Speaker 3: as well, so they're able to invest more in innovation
20:00
Speaker 3: and expansion, which often helps the tech industry to boom.
20:04
Speaker 3: But in saying that, not every single sector is a
20:08
Speaker 3: winner when interest rates drop, you might go, oh, everybody
20:11
Speaker 3: wins if interest rates are going down, and I get
20:14
Speaker 3: that on a personal level, but banks which had a
20:17
Speaker 3: huge year in twenty twenty four might actually not see
20:21
Speaker 3: the same level of gains. So if you've got a
20:23
Speaker 3: well diversified portfolio, most people, especially if you're buying like
20:28
Speaker 3: a Top two hundred or a Top one hundred ETF
20:32
Speaker 3: most people will own a bank of some form. Lots
20:35
Speaker 3: of people might own multiple of the top four banks,
20:39
Speaker 3: and even though they had a huge year last year,
20:42
Speaker 3: lower mortgage rates actually mean that banks are earning less
20:45
Speaker 3: money from home loans, which could reduce their profitability and
20:49
Speaker 3: actually slow how quickly their share price is increasing in value.
20:54
Speaker 3: It could also slow down what their dividend payment is.
20:58
Speaker 3: Does that mean bad things, Absolutely not. But this is
21:01
Speaker 3: just another reflection of the ebbs and the flows of
21:04
Speaker 3: the share market and what that looks like and what
21:07
Speaker 3: that means, because you know, when one thing is doing
21:10
Speaker 3: really well, something else might not be. And that doesn't
21:13
Speaker 3: mean it one's good and one's bad. It just means
21:16
Speaker 3: we should always be diversifying when we are investing, because
21:20
Speaker 3: if tech stocks are doing really well, perhaps your banking
21:23
Speaker 3: stocks aren't doing as well, and overall your share portfolio
21:27
Speaker 3: has a really nice, even average return. And I've done
21:30
Speaker 3: episodes on diversification and the importance of it. You shouldn't
21:34
Speaker 3: ever just be investing in one sector because you're like,
21:37
Speaker 3: I love text, so I'm only going to invest there.
21:39
Speaker 3: I get it, But I would really consider not putting
21:42
Speaker 3: all your eggs in one basket because you want exposure
21:45
Speaker 3: to all the different markets, because as you're hearing me
21:48
Speaker 3: talk about today, like when one thing thrives, something else
21:51
Speaker 3: is taking a hit, and when something else is taking
21:53
Speaker 3: a hit, like over here changes like all the different levers,
21:57
Speaker 3: they work in different and I say really random ways.
22:02
Speaker 3: And speaking of different levers and things that we're pulling,
22:05
Speaker 3: we're also heading towards an election, so we're heading to
22:08
Speaker 3: the polls and for the next election before the end
22:11
Speaker 3: of May, we're going to hear some more information. But
22:15
Speaker 3: whenever there is an election, the markets do tend to
22:18
Speaker 3: take a lot of notice, like they are paying a
22:21
Speaker 3: lot more attention because politics and who is in government
22:27
Speaker 3: very very deeply impacts our share price of different assets.
22:32
Speaker 3: So historically investors are known to be a little bit
22:36
Speaker 3: more conservative and we hold off on really big decisions
22:39
Speaker 3: in the lead up to elections, which can actually impact
22:44
Speaker 3: the market and it can slow the market movements. So
22:47
Speaker 3: some industries like for example, energy and healthcare and property
22:52
Speaker 3: could see really big swings depending on potential policy changes.
22:57
Speaker 3: So like if one candidate, for example, is not in
22:59
Speaker 3: going government is promising you know big you know cuts
23:03
Speaker 3: on your stamp duty or tax cuts on property costs,
23:07
Speaker 3: you might go, that's really attractive and I'd love to
23:09
Speaker 3: buy house, but I'm not going to do it unless
23:11
Speaker 3: I know that that's a given. So we like hold
23:14
Speaker 3: off on these really big decisions to see what's going on,
23:17
Speaker 3: or if there's a plan in place right now, you
23:19
Speaker 3: might go, oh, I don't want to buy yet, because
23:21
Speaker 3: I don't know if that's going to last. In past
23:24
Speaker 3: election years, the ASX has actually been more volatile, but
23:27
Speaker 3: I would say over the long run, market trends do
23:30
Speaker 3: tend to stay relatively steady. But what's more important is
23:34
Speaker 3: actually who wins and how different sectors are then impacted.
23:39
Speaker 3: So if labor stays in power, we can actually expect
23:43
Speaker 3: a relatively continued focus on renewable energy and emissions reduction,
23:48
Speaker 3: which could essentially shift investment away from coal and fossil fuels,
23:54
Speaker 3: which is a big export of ours. But if the
23:56
Speaker 3: Coalition wins, on the other hand, we could actually see
24:00
Speaker 3: stronger support for traditional mining. One thing that we do
24:03
Speaker 3: know to be true is that when the election is over,
24:06
Speaker 3: the markets do tend to stabilize because we love stability,
24:09
Speaker 3: right like we love knowing that when we go home
24:12
Speaker 3: everything is where we left it and when election is coming,
24:16
Speaker 3: like we don't know who's going to be the captain
24:18
Speaker 3: of the ship, right, Like we're just not sure. So
24:21
Speaker 3: once that decision is made, whether you're happy with it
24:24
Speaker 3: or not, the markets do tend to go okay. We
24:27
Speaker 3: can breathe a sigh of relief because like we know
24:29
Speaker 3: what's going to happen from here on in, and the
24:31
Speaker 3: ASX has actually historically rallied and like been quite positive
24:37
Speaker 3: after elections. As you know, there's less uncertainty and investors
24:41
Speaker 3: are adjusting to new policies and new landscapes because there's
24:45
Speaker 3: not going to be more change in the foreseeable future.
24:48
Speaker 3: So I guess rather than focusing purely on politics, investors
24:53
Speaker 3: should really be paying attention to the actual policies that
24:56
Speaker 3: come out of the election and how they affect the
25:00
Speaker 3: different industries, obviously the ones that you're investing in or
25:03
Speaker 3: planning on investing in, because at the end of the day,
25:07
Speaker 3: it's actually not just about who is in power, but
25:10
Speaker 3: it's about what they will do or what they plan
25:13
Speaker 3: to do once they get into power. So today I
25:17
Speaker 3: feel like I have yapped at you and I am
25:20
Speaker 3: wildly passionate about this. I love getting the opportunity to
25:23
Speaker 3: do a little bit of a market update for you guys.
25:26
Speaker 3: We've talked about AI, Trump's tariffs, We've talked about interest rates,
25:31
Speaker 3: had a good chat about China's economy and the upcoming election.
25:36
Speaker 2: And I feel like.
25:37
Speaker 3: That sounds like a lot and I don't want that
25:40
Speaker 3: to be overwhelming. But the good news is, let's be honest,
25:43
Speaker 3: you actually don't need to predict the future or like
25:46
Speaker 3: have a really strong grasp of these things to be
25:49
Speaker 3: a smart and good investor. Like I am not individually
25:55
Speaker 3: a better investor than my community are, Like I'm investing
25:59
Speaker 3: in the same things as you guys, Like I am
26:02
Speaker 3: the type of investor that you know. I'm a bit
26:04
Speaker 3: set and forget, but I'm definitely about long term wins
26:08
Speaker 3: and a good solid investor understands that markets are always
26:13
Speaker 3: going to have their ups and downs, but the real
26:16
Speaker 3: winner when it comes to investing is long term strategies.
26:19
Speaker 3: You know, there might be a lot of conversation right
26:21
Speaker 3: now about people going, oh, my gosh, have you.
26:23
Speaker 2: Seen the video?
26:24
Speaker 3: Have you seen you know, all of these new things
26:26
Speaker 3: that you can invest in AI, And we get so
26:28
Speaker 3: caught up in it thinking that there might be a
26:30
Speaker 3: get rich quick option or an option that puts us
26:34
Speaker 3: in the best possible position, But at the end of
26:36
Speaker 3: the day, long term investors are the winners. So I've
26:40
Speaker 3: written down a couple of key takeaways that I want
26:43
Speaker 3: you to keep in mind as we move through the
26:46
Speaker 3: rest of twenty twenty five. So number one, I already
26:50
Speaker 3: hit the nail on the head with this one before
26:52
Speaker 3: Diversification is key. Never put your money into just one sector.
27:00
Speaker 3: Like we spoke before about the difference between bank and
27:03
Speaker 3: tech and how when one does well, the other might
27:06
Speaker 3: be a little bit.
27:07
Speaker 2: Off, and vice versa.
27:08
Speaker 3: And in twenty twenty four last year, banks and tech
27:12
Speaker 3: both thrived, but mining was actually struggling, and things could actually.
27:17
Speaker 2: Completely shift this year.
27:19
Speaker 3: So if you're not sure where to start, and you're
27:22
Speaker 3: like ve like you said banks and tech might not
27:25
Speaker 3: do as well, or vice versa, like should I be
27:27
Speaker 3: investing in mining, like I don't know what this means?
27:29
Speaker 3: Like why not consider an exchange traded fund? I talk
27:32
Speaker 3: about them all the time if you want to go
27:34
Speaker 3: and look, I've done a whole heap of podcasts on
27:37
Speaker 3: understanding ETFs. But they are a fantastic way to automatically
27:43
Speaker 3: diversify your risk like they are a fantastic way of
27:46
Speaker 3: getting into the market, and just knowing I haven't put
27:49
Speaker 3: all my eggs in one basket, I have actually, you know,
27:52
Speaker 3: immediately diversified across a number of different industries, across a
27:57
Speaker 3: number of different sectors. And I think that's low key,
28:01
Speaker 3: very sexy. But you could pick them in terms of
28:06
Speaker 3: your sector or industry as well. So say you're like Pavia,
28:09
Speaker 3: I really like tech. Well, that's super exciting and I'm
28:12
Speaker 3: glad that you want to invest in tech. Have you
28:15
Speaker 3: considered a tech specific ETF so that you could potentially
28:20
Speaker 3: invest into the space that we're passionate about, but give
28:23
Speaker 3: yourself a better long term chance. Instead of just picking
28:26
Speaker 3: one asset or one company inside the tech space, why
28:30
Speaker 3: not go and pick a number of them so that
28:32
Speaker 3: you can get exposure to all of them. The second
28:36
Speaker 3: thing I want you to understand, and I've spoken about
28:40
Speaker 3: this before about the ebbs and the flows of the
28:42
Speaker 3: market and how backtracking. I've said this on the podcast before,
28:45
Speaker 3: but over your lifetime, you're probably going to see at
28:48
Speaker 3: least seven market dips, Like that's a lot of market dips,
28:52
Speaker 3: and that feels tumultuous, and that is going to put
28:55
Speaker 3: a pit in the bottom of your stomach every single time.
28:58
Speaker 3: Like I'm a retired financial advisor and that still happens
29:00
Speaker 3: to me when I log into my share trading platform
29:03
Speaker 3: and I see my stocks are down, like I'd question
29:07
Speaker 3: have I done the right things? Like what's going on here?
29:10
Speaker 3: And I really need to remember that at the end
29:12
Speaker 3: of the day, market dips can create opportunities. When a
29:15
Speaker 3: share price drops because of volatility, whether it's Trump jumping
29:20
Speaker 3: up and down online or on a stage talking about
29:24
Speaker 3: his tariffs, or China's slow down or something else, it's
29:29
Speaker 3: not always a bad thing. And if you're investing in strong,
29:32
Speaker 3: good companies that have a proven track record, these dips
29:38
Speaker 3: in their share price could actually be a really good
29:41
Speaker 3: opportunity to buy quality stocks at a discount. And that's,
29:46
Speaker 3: from my perspective, a really great opportunity. If you're like
29:48
Speaker 3: looking at a particular stock and you've decided it's a
29:53
Speaker 3: really good stock, I've been following it for a while,
29:54
Speaker 3: I think that it could be a great opportunity. Like
29:57
Speaker 3: if you were looking at Navidia, for example, and you
30:00
Speaker 3: saw that on that day their share price dropped by
30:03
Speaker 3: seventeen percent. You could see it two ways. You could
30:06
Speaker 3: have been like, oh my god, and a video dropped
30:07
Speaker 3: by seventeen percent. That makes me feel sick. Maybe it's
30:11
Speaker 3: not as good of an asset as I thought it was.
30:13
Speaker 3: I'm going to steer clear because that type of volatility
30:16
Speaker 3: is wild. Or you could have looked at the company
30:19
Speaker 3: and thought, actually, I did my research. They're still you know,
30:23
Speaker 3: providing these chips. They are a really big part of
30:25
Speaker 3: the you know, global economy. When it comes to AI,
30:28
Speaker 3: maybe that's an opportunity to get a seventeen percent discount
30:31
Speaker 3: because I was already looking at paying market value for
30:33
Speaker 3: it just to get in. So you could see it
30:36
Speaker 3: one of two ways. Neither way is correct or incorrect.
30:39
Speaker 3: It's all about perception and you're making a decision that
30:42
Speaker 3: is in line with your values and what you want
30:44
Speaker 3: to achieve. And speaking, I guess more about AI in
30:48
Speaker 3: tech when it comes to Deep Seek, their rise, I
30:52
Speaker 3: would say has shown just how fast and how quickly
30:56
Speaker 3: moving the AI space is. It's ever evolving, And to
31:00
Speaker 3: me that's a little bit scary because I'm like, this
31:03
Speaker 3: is actually crazy. Like I can ask chat, GPT anything
31:06
Speaker 3: and you're telling me that this stuff is going to
31:08
Speaker 3: get even smarter and that this space is only just started.
31:12
Speaker 3: And I feel like innovation is happening every day, and
31:17
Speaker 3: innovation is going to continue to drive opportunities in tech stocks.
31:21
Speaker 3: So it's definitely worth keeping an eye on them and
31:25
Speaker 3: on the space. And I don't think that deep Seek
31:27
Speaker 3: is the only one that's going to rise. I think
31:30
Speaker 3: that there's going to be other people and other organizations
31:33
Speaker 3: that make news and make it to the media this
31:35
Speaker 3: year for discovering different things and being on the forefront
31:40
Speaker 3: of things. And I think it's also important that when
31:42
Speaker 3: you see these tech companies, like you see deep Seek
31:45
Speaker 3: and you're like, oh my gosh, like I need to
31:46
Speaker 3: get in on that, because I missed out on when
31:49
Speaker 3: Navidia was selling for the first time, and I missed
31:51
Speaker 3: out on the rise of Xyzed. Like there's always going
31:54
Speaker 3: to be another opportunity. And if something is being spoken
31:57
Speaker 3: about consistently in the media, that doesn't necessarily mean it
32:00
Speaker 3: is a really good investment decision for you. Sometimes if
32:04
Speaker 3: the media has finally gotten hold of it and the
32:06
Speaker 3: share price has absolutely skyrocketed, that actually is the biggest
32:11
Speaker 3: point of risk. In investment because we can't be sure
32:16
Speaker 3: that their share price has increased because the company's good.
32:20
Speaker 3: It could have just increased because so many people are
32:23
Speaker 3: talking about it and so many people are purchasing it.
32:25
Speaker 3: And if you get a mass amount of people purchasing
32:27
Speaker 3: one asset, it's share price increases, and it could just
32:31
Speaker 3: be due to popularity, and it's like overly inflated share price.
32:35
Speaker 3: Now is something that you're considering because of that herd mentality,
32:39
Speaker 3: and I just don't want you to fall for it,
32:40
Speaker 3: so we need to be really careful. Now, let's just
32:44
Speaker 3: wrap up on that, because I feel like I could
32:45
Speaker 3: talk about this until literally the cows come home. But
32:50
Speaker 3: I guess after all of this, I hope I haven't
32:52
Speaker 3: overwhelmed you. I hope you want more conversations like this
32:55
Speaker 3: because I am so ready to have them. But I
32:57
Speaker 3: want you to remember that successful investors they're patient, They
33:03
Speaker 3: are kind of boring, like we are diversified informed, like
33:08
Speaker 3: we know that markets are always going to recover because
33:11
Speaker 3: history shows us that. Literally, like, go and look at
33:15
Speaker 3: the share market price over one hundred year period, even
33:18
Speaker 3: after every single downturn, the share market bounces back over
33:22
Speaker 3: time and not only does it bounce back, but it
33:25
Speaker 3: goes up even higher than where it was before, Like,
33:28
Speaker 3: there is no need for you to time the market
33:31
Speaker 3: because the real investors that are making real money are
33:35
Speaker 3: investing consistently over the long term and trusting their long
33:39
Speaker 3: term strategy as opposed to trying to chase the next
33:43
Speaker 3: tech stock, Like, please remember that, so stick to your strategy,
33:48
Speaker 3: keep learning, And I would say most importantly, you can
33:52
Speaker 3: be excited about short term noise, like you can do
33:54
Speaker 3: what I do and like dive in and watch every
33:57
Speaker 3: single TikTok on na video. You can look it up
34:00
Speaker 3: and read every single news article, like I have my
34:02
Speaker 3: Google alerts on for na video so that I know
34:05
Speaker 3: what's going on because I'm just so interested in it.
34:07
Speaker 3: But don't let that short term noise shake your confidence
34:11
Speaker 3: when it comes to being a solid investor, like you
34:14
Speaker 3: are making decisions for future you and just because one
34:18
Speaker 3: person said something doesn't necessarily mean that it's going to
34:22
Speaker 3: stick and be the best thing. I promise you've got
34:24
Speaker 3: this now. If you want to hear more episodes like this,
34:27
Speaker 3: please tell us. If you're on Spotify, you can join
34:29
Speaker 3: the polls below. If you are on Apple, you can
34:32
Speaker 3: leave us a review, but also please don't forget to
34:36
Speaker 3: hit follow and subscribe because it really helps me to
34:39
Speaker 3: bring more of this content to the table and I
34:43
Speaker 3: hope you love it. Anyway, We're planning on doing more
34:46
Speaker 3: of these share market breakdowns this year and I'd love
34:49
Speaker 3: to hear what you think, So jump in message us
34:52
Speaker 3: dm us on Instagram and let us know what you thought.
34:55
Speaker 3: Have a really good day and will see you guys
34:57
Speaker 3: on Friday. The advice shared on She's on the Money
35:06
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