How To Start Investing In The Stock Market: An Investing Masterclass

This transcript is auto-generated and lightly edited for readability, it may contain errors.

[0:00] Sammie Ellard-King: So today marks 150 episodes of the Money Gains podcast. And so I’ve put together an absolute masterclass in investing from some of the top experts that we’ve had on over time. And so today you are literally going to get a start to finish blueprint of exactly everything you need to do to get started investing into the stock market. And we’re going to kickstart things with a very good friend of mine and Arsenal fan, true Arsenal fan, just like me. His name is Ryan King, and we’re going to be running through what index funds are and the differences between them and why he way prefers global index funds over things like the S&P 500 and the FTSE 100 as well. So let’s get into it with Ryan King. You sort of touched on it a couple of times and you mentioned global and I think it’s like something that you actively champion in pretty much every video that you talk about and I just love your approach to it and it’s actually from watching you change some of my own strategy really with it because I was heavy S&P and we’ll touch on what these things are a little bit in a second, of course, but like from watching you, I was actually changed my thought process, which was really interesting. And obviously you’re a big fan of index funds and it’s like a big buzzword in, I suppose, in our world. But even when I get messages all the time, it’s like, you know, what is an index fund and how does it actually work? So yeah, would you mind sort of giving us the foreword?

[1:23] Ryan King: Yeah. So to go back to absolute basics, you obviously have companies all around the world. So even obviously big companies like Tesco, Nike, Adidas, Tesla, you’ve obviously got smaller companies and obviously all these companies are like making products, selling a service, they’ve got employees, they’ve got offices, they’re trying to survive and trying to make money. The really good companies essentially get listed onto the stock market. So once they’re listed on the stock market, me and you and really anyone with access can then sort of buy a share of Tesco from the stock market, buy a share of Apple from the stock market. What then sort of So these are all individual stocks, we call them. So it’s like individual companies and you of course can invest into individual companies. And if you actually work for an employer, like I think Apple have a really good scheme where they will give their employees like share options and you can then get shares in the company. So people may even have shares that they don’t really realise what they are or that they even have them. But these are sort of individual stocks, individual companies. You can then group these companies into what’s called an index. So the index really is just a collection of sort of individual companies individually So some famous ones that people probably would have heard of, you mentioned the S&P 500, the largest 500 US companies, the FTSE 100 is the largest 100 UK companies, other sort of ones, NASDAQ, you’ve got the Nikkei 225, but then you also have these global index funds, which group companies from all around the world in. But an index is just essentially a collection of individual companies or individual stocks. Index funds are then how we, me and you, everyday investors, can then invest in into that index. So rather than using the S&P 500 as an example, rather than going out and buying one single share of every 500 companies, which would be a pain in the ass, and those companies always changing, we can just invest into an S&P 500 index fund or ETF. They’re essentially the same thing. And then get access to those 500 companies through one index fund or ETF. There’s a massive emphasis, of course, on the US. I think because generally speaking, the US is probably the most sort of capitalistic and innovative country is also the largest country that makes up the global stock market about 60% it’s got the biggest companies Apple, Tesla, Amazon, Facebook or Meta so there’s a lot of focus on it and I’m not going to like bullshit you the S&P 500 has had amazing returns for the last 15 years it’s been the best performing country by a mile some of the stocks like Apple, Nvidia have had unbelievable returns but my approach personally is to use global index funds so global index funds I guess sort of as we broke that one index fund already is, but it’s just invest into companies all around the world globally. So not just the US, but also the UK, Japan, China, literally everywhere around the world. And I personally choose to invest into that. It sort of means that although the US is the best at the moment, even if another country becomes better in future, China or India are probably the two most likely, is it gonna happen? I don’t know. But if another country starts performing better than the US, then that’ll be reflected in the global index fund. If the US still performs well, don’t get me wrong, I’ll still be benefiting as well because the US makes up the majority of the global index fund. But yeah, the reason why I like using global funds, it just keeps my approach really simple. It means I’m not going to have multiple funds and if something did happen to the US, I’m still going to be sort of fine either way because I believe the global economy is going to continue growing, innovating over time and then slowly my wealth will grow with that. So that’s sort of whistle-stop tour of the stock market and why I personally use global index funds.

[4:58] Sammie Ellard-King: And there’s many different types of global index funds and I get this question a lot so

[5:03] Ryan King: I’m sure you

[5:03] Sammie Ellard-King: do right what do you reply with normally when people ask you that

[5:08] Ryan King: so I actually think this is like probably one of the biggest barriers to entry that isn’t talked about much it’s so hard to work out what a fund actually does if you type in global or world you’ll get like FTSE global all cap accumulation FTSE global all cap income FTSE all world VWRP distribution yeah then you’ve got like all these other buzzwords, then like Vanguard have got one, iShares have got one, Invesco have got one. It’s an absolute minefield to work out what funds actually mean. So what I would say, if anyone actually looks into specific funds, the best thing to do, and it’s a bit of a manual job, is to look up the fund and then actually look at the fact sheet or the key investor document. Because in there, it’s a two-pager. It’ll give you the objective, what the fund’s invested into, as well as the fees. There’s a few other bits, but I think those two are the two most important things that I look at when selecting a fund. What it’s actually invested into, And I, of course, want to invest globally. And then what the fees are. And, of course, I want as low as fees as possible. The fund that I talk about a lot in the book and just for years on social media is the FTSE Global All Cap, which is a vanguard. So the whole fund name is called FTSE Global All Cap Index Fund Accumulation. So ACC. Yeah. Bit of an absolute jargon sentence. But to break that down. No wonder it’s so bloody hard

[6:26] Sammie Ellard-King: for people.

[6:28] Ryan King: And it’s actually got Vanguard at the start. So Vanguard. are an investment platform but they also offer funds and that is their fund and a FTSE global all cap is the index it tracks and that index is essentially a global index made up of companies from all around the world the developed world and the emerging markets world and the companies are of all sizes large, medium and small so sort of the most diversified fund you can invest into index fund we’ve covered that there’s a passive index fund approach to invest in so it’s low fee and an accumulation which is very important. It means that all of the dividends will be automatically reinvested back into the fund. So generally speaking, you want to use accumulation funds because if you can automatically reinvest the dividends back into the fund, not only is that automatic and you haven’t got to do anything manually, it also is going to grow and compound your wealth slowly. But that is the main fund that I use. So in my Vanguard UK Stocks and Shares ISA and SIPP, 100% of my money is in the Vanguard FTSE Global All Cap Index Fund Accumulation. And that’s the only fund I invest into. Of course, people can do whatever they want with their money. I could also invest into the S&P 500. I could also invest into another global fund, into individual stocks. But I personally just, like the name suggests, want to make money as simple as possible, even in my own personal life. And just, yeah, have one fund. And that’s the only fund I need, to be honest with you. Another very popular one is Vanguard’s FTSE All World VWRP, which is an ETF rather than an index fund. But it’s essentially, it’s very similar. That’s available on more platforms. So that’s probably actually more popular of funds to invest into. But if I’ve got the FTSE Global All Cap, the FTSE All World is very similar. And then what will happen is like iShares, Invesco, Fidelity, all these others, they will all offer their own one. So what I say is, normally I say to go with Vanguard because they’re the lowest fee. Unfortunately as well, I’m not actually sponsored by Vanguard. I wish I was because I’ve been talking to them for years. If they can sponsor me, honestly, let me know. Make a fortune. But I normally go with Vanguard because they’re the lowest fee. But if you wanted to, you could like click into all the fun to fact sheets and actually see which is the lowest fee and if every single fund is doing the exact same thing then obviously pick the one with the lowest fee. Really good advice. Can you explain the

[8:39] Sammie Ellard-King: dividend in a little bit more detail for people because I feel like it’s something people overlook and actually like you know for me it’s fantastic because it’s like 1.5% dividend and I’m getting 8% that year for example is actually a 9.5% increase.

[8:52] Ryan King: Yeah 100% so the very basics all dividends are is essentially cash that is paid out by companies to shareholders for holding the stock. So a lot of fast-growing companies like Tesla, Amazon, Meta, they won’t pay dividends because they’re reinvesting all of their money back into the business. Older companies generally though, so think like Coca-Cola, McDonald’s, they will pay dividends because they’re not as fast-growing, but that’s sort of a way to reward shareholders for holding their individual stock or individual share. And of course, the more shares you have, the higher dividends you’ll get. Funds, index funds inherently are made up of hundreds if not thousands of companies so the S&P 500 has 500 companies the FTSE Global All Cap invests into 7,000 companies all around the world so inherently they will also pay a dividend and it’s called the dividend yield so as you mentioned 1.5% that is the dividend yield how much is paid out of the share price every single year those dividends are actually really powerful because for years and years the S&P 500 when interest rates were like 0% in this country for years the S&P 500 still had a a 2% dividend yield so even if it returned nothing you were still getting more from dividends than keeping money in a savings account of course it’s a bit different now because interest rates have risen but you make a great point it’s so often overlooked and that is part of your return and it’s actually there’s a bit of a tangent but there’s some really good studies and I actually touch on them in the book where over the long term about half of your return will actually come from reinvesting dividends so that’s how powerful it is actually using index funds and then reinvesting all your dividends because they will obviously compound as well over the long term yeah but yeah so how does this actually work in practice well you have accumulation funds and income funds and these accumulation funds will automatically reinvest the dividends back into the fund so that one and a half percent you mentioned that will get reinvested back in normally either quarterly or yearly depends on the fund with the FTSE Global All Cap it’s quarterly normally the S&P 500, sorry with the FTSE Global All Cap it’s yearly with the S&P 500 it’s normally quarterly but that gets reinvested back into the fund and then throws your wealth even quicker over the long term.

[11:01] Sammie Ellard-King: I love dividends.

[11:02] Ryan King: Yeah. Dividends are good. They’re great, aren’t they? And the sort of end goal is, well, imagine you can get your pot to a point where you can then switch to an income fund and then live off of the income from the investment pot. That is the dream. Yeah.

[11:15] Sammie Ellard-King: I, funny fact today on the way in, I got an email from Freetrade, which I just completely forgot I’d opened the account. And I got a dividend for 0.01. Every

[11:27] Ryan King: penny counts. The start

[11:28] Sammie Ellard-King: of the next million.

[11:29] Ryan King: I was like, get in.

[11:30] Sammie Ellard-King: and I was like oh I ride all like that it’s like absolutely smashing wealth growth right now you gotta start somewhere yeah I think I looked at it and I looked at it and I was like oh yeah cool I think it’s got like £5.69 or something on it and I was like oh wow amazing yeah I’m going up in the world guys obviously you you’ve spoken about the S&P 500 it’s probably the most famous but why is it that you just 100% why only that like a lot of because I’m I split so I do like 80% index funds 20% individuals and then even my 80% I do 50% global and if you make that 80% 100% so then 30% S&P and then 20% UK and that’s just like for me I feel more balanced with that and it’s different for everyone

[12:17] Ryan King: and that’s I guess the beauty of investing you can literally invest into whatever you want just because I’m doing this this is my approach you might have a different view on things with the US market it’s like undeniable that the lower the last 15 years the gains have been much better than investing into a global fund global funds have still benefited because they’re made up primarily about 60% of US stocks but it’s no doubt the US market has performed better the problem is it’s impossible to know if that’s going to continue and with a global fund you’re efficiently investing into countries around the world in the direct proportion that they make up of the global stock market that’s a bit of a mouthful but what that essentially means it’s

[12:59] Sammie Ellard-King: like world economies basically.

[13:00] Ryan King: Essentially, yeah. So the UK only makes up about 4% of the global stock market. Interesting fact, there’s like a few US companies that are actually more valuable than the entire UK stock market, which shows just how massive the US is. But, so the UK is made up, makes up 4% of the global stock market, which means in my global fund, there’s 4% UK stocks. The US makes up about 60% of the global stock market, which means in my global index fund, the FTSE Global All Cap, it’s about 60% US stocks so what then happens is over time as different countries and companies grow and some fail that’s then reflected in the global index fund so I’m sort of always efficiently investing into companies and countries in direct proportion that they make up of the global stock market if that makes sense so I know and a lot of people a lot of people that follow me and message me they actually do have like half their money in the global fund half their money in an S&P 500 fund that’s completely fine and you can do that and if the US continues needs to dominate then you will make better gains than I make but the thing is and actually in the book go through like a hundred years of stock market data and the best country is always changing it’s very rare it’s wild isn’t it yeah so even the US over the last hundred years

[14:15] Sammie Ellard-King: like Japan

[14:16] Ryan King: Japan so Japan made up 45% of the stock market I think it was in the 1980s and now it makes up 8% so imagine back then that the biggest stock market all my money is going in Japan you would have lost out massively 50 years later because Japan is now only about 7% to 8% of the global stock market.

[15:17] Sammie Ellard-King: Ryan always brings the vibes, man. I just love that guy to bits. But next up, we have ex-Goldman Sachs banker Ayesha Ofori, who is also the CEO of Investing at Propelle. And we’re going to be talking about compounding and the power of it over time. And while you need that key thing in there, which is time, and we’re also going to be looking at why savings alone versus investing isn’t a great strategy. If you only save, you are going to end up losing over the long time on why investing is so, so important. So let’s jump into it with Ayesha. Research from Fidelity found that women outperform men by approximately 0.4% every year. And then the Warwick Business School did a study and found it was actually 1.8%, which is actually quite incredible. But then we have the problem of actually getting women investing in the first place. And there was a study done by Fidelity again, that 67% of women are now investing outside of the retirement accounts compared to 44% in 2018. So that’s growing, but it’s not enough, right?

[16:24] Ayesha Ofori: Not by any means, not at the moment. So that’s the irony, right? When it comes to investing, women are actually great investors. And I think it’s because they tend to be more prudent. So a lot of people say that women are really like risk averse. Like, oh gosh, investing is risky, so women don’t want to go anywhere near it. I don’t see that. I say women are risk aware they have more questions there are more things that they want to know before they move forward but if you give them that information and they’re able to like assess the investment and the opportunity just because it has a certain level of risk they’re still potentially willing to move forward once you give them the information and I think it’s that prudence and that extra due diligence that makes them better investors potentially but as you said women just aren’t investing anywhere near enough we’re great at say Yeah. Yeah. Yeah. Yeah. Yeah. another bracket sort of three to five years sort of shorter term investments and then anything sort of five years plus is sort of longer term and then your pension and how you put your money to work will vary depending on where on that line it is but the investing part is very very different to the savings part and this is what we’re really trying to get across to women and then when it comes back to the sort of risk thing like investing in what I call sort of core very vanilla sort of generalized funds or ETFs like we work for example with Vanguard and BlackRock and some of their funds slow and steady over time that’s really all you need and actually the data shows I think it’s with the S&P 500 if you invest for a 10 year period your probability of loss is around 2% if you invest for 15 years I think the probability of loss drops to something like 0.02 I mean how that That’s not risky. So it’s actually about the time that you invest for. So if you’re investing for the long term, you can significantly reduce the risk. But yes, I get it. If you’re investing, and I wouldn’t even call it investing, but if you say, for example, bought some shares or something for like a few months or a year, yes, probably a lot of volatility, a lot of risk, but that’s not investing. I’d say that’s probably gambling. So if you’re actually investing in line with a true investment philosophy for the long term, by nature of the fact that it’s Yeah. And like the comparison

[19:27] Sammie Ellard-King: to gambling is that you’re playing with pure chance, whereas these are real businesses.

[19:31] Sammie: Yep.

[19:31] Sammie Ellard-King: Some of the best businesses in the world, real people making real profits every single day. Yep. And you are essentially tapping into a little piece of that when you do invest into these companies.

[19:42] Ayesha Ofori: Absolutely. And if you invest through a fund, And there’s likely a fund manager somewhere or a whole team of managers. And it’s their job day in, day out to be looking at the underlying investments in this fund. And, you know, those people probably have various different qualifications, like what I went through when I was a banking. So there’s a lot of smart people looking at this on a regular basis.

[20:06] Sammie Ellard-King: With an enormous

[20:08] Ayesha Ofori: amount of data. The risk is

[20:16] Sammie Ellard-King: not

[20:16] Ayesha Ofori: doing it. Exactly. In

[20:18] Sammie Ellard-King: my opinion.

[20:18] Ayesha Ofori: And also, there’s always an element of risk in something, right? Of course. Nothing is completely risk-free. What people have to think about is the probability of that risk occurring. If the chances of it happening are so small, then overall I say it’s not that risky.

[20:34] Sammie Ellard-King: Yeah, absolutely. So it’s quite stark when you come to look at the figures between men and women when they come to retire. I think the average retirement pot is just under 4%. 40,000 pounds for women and the average retirement for men just above 84,000 pounds. So that’s less, that’s double.

[20:52] Sammie: Yep.

[20:53] Sammie Ellard-King: Which is pretty crazy. Obviously there are some factors at play, you know, simply because of the makeup of, you know, men and women. Women usually birth the children and will raise them very much in the first couple of years at least, which obviously then has an effect on how much they can bring in and their careers, etc. So there’s that involved, which we do need to take into consideration. However, there are some other big factors at play. What’s some of the big ones that you see?

[21:24] Ayesha Ofori: Yeah, so it’s a couple of things. So there’s obviously the gender pay gap. So the fact that men get paid more than women, that is closing. And so I’d say it was more of an issue in the past. It is still an issue because we’re not at parity yet, but it’s getting better. So there’s a pay gap. As you mentioned, women tend to be the ones who… First of all, they have the children, but then they become carers predominantly for the children and also tend to be the ones who become carers for sort of elderly relatives and things like this. So we’ll take time out if that happens. Then also during menopause, a lot of women also take time out because of the various different effects that they’re feeling. And when you add all of this stuff in, it’s essentially the time out of work that has the biggest impact on a earning potential, but also Yes. Keep compounding years, essentially. making progress in some of those areas, but we’re not going to be able to eliminate them all completely. So the way that I look at it is, okay, what are the things that women can absolutely change and have a direct positive impact? Well, put your money to work and put it to work as hard as you possibly can for as long as you possibly can. And I don’t know, sometimes for me, it’s like so simple. Just you don’t even have to invest a lot or have a It’s steady, often consistent, even if it’s a small amount of money. So that’s the message that I’m going to keep drumming into people and just keep going over and over and over. It’s, you know, investing isn’t just for the rich. You can invest with a small amount of money. What matters is when you start to start as soon as possible, being consistent and investing for the long term.

[24:46] Sammie Ellard-King: Yeah. We did a study the other day into like even waiting three years versus somebody else that doesn’t and does that whole like 35 years and someone does 32 years. The difference is hundreds of thousands. So those, even those small contributions earlier make an enormous difference. The time is the key factor with this.

[25:09] Ayesha Ofori: But I think a lot of people don’t realise that. So I’ve actually put together an Excel model where I can show people this. That

[25:16] Sammie Ellard-King: doesn’t surprise me in any way shape

[25:17] Ayesha Ofori: or form. What can I say? Excel is like my best friend. Yeah, Excel is, I love it. It’s just so logical. It’s so easy to show things.

[25:29] Sammie Ellard-King: I can’t. I’m very much like, you know, have to write things out and see it in front of me. Excel, I’m just like.

[25:35] Ayesha Ofori: But for me, it works. And so what I’ve done is I’ve shown people, like, if you increase your investments, say you’re making monthly contributions, if you increase it just by a little bit, an extra £10 or an extra £50 over 10, 20, 30, 40 years, look at this huge impact. As you said, If you start in investing now versus in three years time, over 10, 20, 30, 40 years, look at the difference. And it is meaningful. But people just assume, oh, it’s only three years. It doesn’t matter. No, it’s only an extra 10 quid. That’s nothing. Compounding. Einstein called it the eighth wonder of the world. Like it really is. And it’s like, it’s not a flat line. It’s linear. It’s not even linear. It goes up like this. It’s almost exponential. And that is the beauty of investing. It’s all in the compounding. And in order to benefit from that, you’ve got to stick at it. Start early, invest often and keep going.

[26:31] Sammie Ellard-King: Wow. Thanks very much, Ayesha. And next up, we have a very good friend of mine, author of possibly one of the best finance books of all time is How to Own the World. His name is Andrew Craig. And we’re going to be jumping into why actually stock market crashes might not matter as much as you think. And when you think long term and you have a long time horizon you can actually benefit from them at the same time so let’s jump into it with andrew

[26:58] Andrew Craig: after the 1929 crash yeah the u.s stock market didn’t get back to the same level until i think it’s 1957 but it’s like you know a whole a generation right it was it didn’t get back to the same and the same japan japan in 1987 when the the emperor’s palace was theoretically valued at more than the whole state of california was how crazy um the japanese stock market and property market got in the late 80s the Japanese stock market didn’t get back above the 1987 level until a few years ago right but that totally that doesn’t matter that’s irrelevant because that that doesn’t matter to you if you’re buying every month for the whole of your life right because if the stock market crashed if you had investments in 1929 and the stock market crashed but you bought it every month from 1930 1931 1932 then the fact that it didn’t get back to above the 1920 level 29 level to 1957 doesn’t matter because you’ve made money all the way up from the bottom over 30 years and that’s what again that’s really basic stuff but it’s what people don’t understand and they’re constantly thinking about the aggregate levels of the stock market and also you know about whether now is a good or bad time to invest well you just shouldn’t think like that at all for investing for trading is different but you know as I think you also know I always talk about the fact that investing is appropriate for every single person who earns any money like fact and it will be life changing if people do it and it will be country changing if tens of millions of more people do it here

[28:24] Sammie: yeah

[28:25] Andrew Craig: trading is probably only appropriate for like 0.1% of the population because it’s hard if that yeah well exactly it’s like and it’s insane like I reckon that being a really good trader is at least a degree’s worth of knowledge yeah possibly even a PhD’s worth to be really good yeah and all this stuff you can do it in a few minutes a day it’s like yeah if you’ve been practicing for 20 years yeah do it in a few minutes a day but if you’re just starting off you probably can’t and and there are all sorts of other things you could be doing with your life either things that will make you happy like hanging out with your kids or you know your friends or whatever or if you are an ambitious person you care about you know being financially successful and stuff the ROI the return on investment of your time which is your most valuable asset of getting better at your job and getting a bonus particularly if you’re all you know getting a pay rise or moving to a better job whatever will almost certainly be better than all of the time spent messing about, looking at screens and trying to figure out how to trade crypto or foreign exchange. But I get on my high horse about this quite a lot.

[29:29] Sammie Ellard-King: The crux of it is global index funds investing, right, in a nutshell. You posted the other day about it, and I found it really interesting. It may have been a repost of someone’s, but what they said in there was that the MSCI world is now 73% US equities and growing. And, yeah, I think the Vanguard VWRP is 66% now. That’s a significant chunk of this purchase that you’re making with your £100 or your £500 or whatever that might well be. That’s a large concentration in one particular country. Then equally a large part of that is the Magnificent

[30:08] Andrew Craig: in seven.

[30:09] Sammie Ellard-King: Does it worry you in any way? And is there anything we should be keeping an eye on with

[30:13] Andrew Craig: that? It goes back to the 80-20 point again, right? What worries me far more for the average person is they don’t invest.

[30:20] Sammie Ellard-King: Right.

[30:21] Andrew Craig: So the first thing is you’ve got to be investing, right? And then the next thing is if you own a big stock market index and you buy every month for many years of your life, you’ve got a very good chance of getting a life-changing result. You know, if you do that, the outcome will be immeasurably better than if you don’t do that. And it will actually probably be the difference between being quite well off and probably being very poor because no government in the world is going to be able to fund, you know, anybody, we’ve talked about this before, but if you’re 30 today, by the time you’re 60, there will not be a pen… well you know the pension today is already effectively meaningless and by then because of all sorts of structural reasons which you know net of the sort of futurologist’s vision of AI and machine learning and robots and you know there is a small chance that we’re going towards a sort of Buck Rogers Star Trek future where everybody’s wealthy because technology’s delivered that right but you don’t want to risk the fact that that’s not what happens you need to make damn sure you’re going to be okay and the only way to do that is to take ownership of this and invest so and the point I wanted to make. So basically, if you look at any big index, so we’ve thrown these numbers around before, but the US equity has done north of 10% annualised for a century, right? And the reason for that is because a century ago, there was no aviation industry. It’s human progress. It’s real economic growth. The reason that capital markets go from bottom left to top right is because of actual tangible human progress, new inventions, bigger population, or richer population. Or

[31:47] Sammie Ellard-King: money in the system as well. Yeah, and that’s…

[31:51] Andrew Craig: why is that going to stop the only thing that will stop that is nuclear Armageddon or in which case you might as well have invested anyway yeah that’s an asymmetric bet like you’re not not investing because Iran and Israel might nuke each other and we might all die next week is why would you live your life that way that’s just a stupid yeah exactly yeah so you might as well invest anyway and so then I think if you overthink it like if you’ve done that thing if you’ve got okay I’m going to sort this out I’m going to invest every month in a big global equity index from my from whenever I can afford it my 20s for the rest of my life as a guilt-edged life habit whether or not you there’s concentration risk and you know it’s like it’s it’s much less important than the fact that you’ve done it but then the way you can mitigate that concentration risk as you get older and more successful you know more sophisticated with your money and hopefully a bit wealthier and you’ve built capital and let you know you can probably do that thing of just having a global index from 20 to 40 with it and at least you know you’ve done a good job right but then if you’re 40 and you’ve actually got quite a big pot of money and to my point earlier about 100 minus your age you’re starting to worry about the return of your money more than the return on your money because it would be tragic to suffer from a massive stock market crash it’s at that age that you and also you’ve got a bit more time on your hands you’re maybe a bit smarter you’ve read a bit more you understand this stuff a bit more you might at that point start thinking about those nuanced considerations like concentration risk and figuring out how to mitigate those risks which is really easy because you could do something like have half of your money in an equal weight stock market index explain what that is let’s use the FTSE 100 So there are 100 companies in the FTSE. And if you have a market cap weighted thing, that means if you put X amount of money, you don’t get 1% in each of the 100 companies. You get 10% in the two or three biggest companies and then 0.1% in the very smallest companies that’s market weighted. And you can do that with the S&P 500 as well. But if you buy an equal weight one, you take out that concentration risk because now you do have one five hundredth of your money in each of the 500 companies. And, you know, probably by the time within a few years time all of these sorts of financial products will have developed even more and they’ll be even better and they’ll be there’s already these things called smart beta risk factors, yes where you can buy things that have high dividend yields or and you know that might sound like you know gobbledygook to somebody who doesn’t know what was he talking about factor ETFs and that’s fine which is to get to my point like do something

[34:14] Ryan King: yeah

[34:14] Andrew Craig: don’t worry about that stuff but you know keep it simple for now keep it simple and grow and grow and then and then further down the road You know, am I worried about concentration risk? To be honest, I think if you own like the Vanguard, sorry, the FTSE All World, which has 4,000 stocks in that index, and I think the ETF that tracks it, the Vanguard ETF’s got 3,640 years of… Good skills, yeah, that’s good. Exactly, so it’s not the whole thing because it doesn’t have all the microcaps in it, but that’s still, you’re going to capture the growth wherever it comes from. And then actually just to, so I talked about factor ETFs and equal weights you know I would say that anybody who’s a British national and like my age or older is should be investing in active UK smaller companies, for example, because they used to shoot, you know, smaller companies can do 15, 16% annualised returns for decades, which is hugely transformative. You put a small amount of your money in that, but they’re not for like a 25 year old who doesn’t, you know, unless they’re very sophisticated and very high earner, but, but older folk might think about that. So if you, you know, if you’ve done a sort of fastest route from A to B 80, 20 thing of just global indices for your 20, and 30s then all of those concerns about concentration risk or any other like you know also just general rebalancing having some gold having some bonds having some whatever because you know to be clear how to own the world is about more than just owning you know it’s about understanding all asset classes as well as just global equities by the way you know that I know of course

[35:47] Sammie Ellard-King: yeah I didn’t mean to squash it down into the crux of it but like it’s the start

[35:52] Andrew Craig: right exactly you know that and you know

[35:55] Sammie Ellard-King: a large part of those assets are already owned by the companies within the And actually,

[35:58] Andrew Craig: I’m glad you said that because that was going to remind me of the point. It’s like, okay, if all you want is a proxy on human progress, that’s what you’re trying to do with investment, right? Because of that human progress point, you want financial exposure to the fact that humans make progress scientifically and whatever else. Then the use of a big global index gives you that proxy. And actually, does it matter if Apple or Microsoft are American companies given how many hundred million iPhones they’ve sold outside of America.

[36:31] Sammie Ellard-King: Yeah, true.

[36:32] Andrew Craig: I mean, what percentage of Microsoft’s revenues and profits come from X US, right? And Visa, MasterCard, JP Morgan, you know, McDonald’s, right? I mean, exactly. So the concentration risk at the top of the S&P 500 and more broadly by virtue of how big they are in the others is you’re still owning the world, right? Because those companies are all global.

[36:55] Sammie Ellard-King: Wow, absolutely love that. Investing into human progress when you’re buying index funds is such a nice way of looking at it. And next up, we’re going to be jumping into another good friend of mine, actually. I suppose they’re all good friends right about now, but he is the head of market analysts over at eToro. And we’re going to be talking all about dollar cost averaging and why it is so powerful and also why investing a little bit more when markets are down can end up paying off over the long term. Let’s jump into it with Sam North from eToro.

[37:27] Sam North: I think under is key and the stats behind all of that but there’s also and I won’t be able to quote this well but I think it’s if you miss the 10 best days of the stock market you know your performance is significantly lower those 10 best days most likely come after a significant drop so it’s almost like when you get that big move lower okay this is my time to go in and you know if you’re longer term who cares pick it in don’t look again for a week yeah the first

[37:56] Sammie Ellard-King: time you do it it you’re like what am i doing yeah everything out of your being saying don’t do it yeah and then you see it go well and you’re like well i’m doing this every time exactly you just become numb to it yeah um so

[38:11] Sam North: it is about that sort of initial dip yeah and and also you’ve got to have the understanding is where it could go lower yes it could go for another week could go for another month but if your dollar cost averaging okay well i’m buying lower down yeah and also you know it’s important to say to be diversified and what is dollar

[38:26] Sammie Ellard-King: cost averaging for the average So, I

[38:27] Sam North: mean, let’s just take, I don’t know, say the FTSE 100, for example, let’s say there’s an ETF that tracks that. And we say, rather than just, let’s say 10 grand, you’ve got 10 grand, which would be nice, wouldn’t it? You say, rather than just go 10 grand to buy that fund right now, I’m going to divide it by, you know, whatever, and do like a grand a month instead. So as the market goes ups and down, has its ebbs and flows, you’re just buying, let’s say on the first of the month, it could be that you do it quarterly or whatever, and you’re just averaging into that position and maybe that’s the way that people choose to do it takes out the site the sort of the volatility of it all the psychology of trying to time the market time in the market is very very tough whereas if you say to yourself I don’t care where it’s trading I’m just going to average myself in then you know you can you can sort of benefit from that and I think certainly for the newer investors is not a bad way to go about it so you know I’m experienced and I still do it so yeah yeah

[39:22] Sammie Ellard-King: I take it just one little step further and that’s like if it’s gone down this month then i’ll add more yeah great and then if it’s if it’s up then i’ll add

[39:32] Sam North: less a little bit less

[39:33] Sammie Ellard-King: yeah and then if it’s up the less i add i still put the same amount yeah just leave that in cash yeah and then just wait for the little dips and then i’ve got that ready to play with absolutely usually kind of works out and overall that’s just allowed me to get much better average

[39:46] Sam North: yeah exactly yeah and and and then for those people like you said they want to take it a step further when it does the five percent when it does the ten percent that’s when you go in yeah and if you you did you if we think over the last 20 years, you go COVID, you go maybe the Eurozone debt crisis, 2011, you go Trump and Brexit. And then the dot-com, you know, I’ve had five times that way. It’s gone down big time. Yeah. And it’s up hundreds of percent since all of those, you know, multi hundreds in some cases.

[40:13] Sammie Ellard-King: Well, it’s even like earlier this year, it was like five, 6% in a couple of days and everyone was freaking out. It was August, wasn’t

[40:19] Sam North: it? Yeah. Yeah.

[40:20] Sammie Ellard-King: And it’s like, you know, let’s go.

[40:23] Sam North: Yeah. It’s like Christmas. I had so many mates message me and I just, tweet and messes them back and be like let’s go shopping and then you go down a week or two weeks later and they’re like damn I should have bought more and you know I said to them there’s always the chance it goes lower this that and the other but yeah it’s a thing where history helps you know and understanding that and experience and just

[40:45] Sammie Ellard-King: to be clear everyone listening to this like this could all tail off and it could have a horrible crash in two weeks time and all of this but then for someone like us we’re ready to go again because our timer horizon is so long. But if someone’s like 62, that’s a big problem.

[41:03] Sam North: Yeah, absolutely. And I think as you get closer to a point where you might say, look, I need to retire or I’m going to need these funds for whatever it might be, you know, going, you know, the majority of your portfolio in equities or stocks is not the right thing to do. No. It might be you say, okay, I’ll go down the route with dividends or government bonds. Yeah. And that’s, you know, that’s you chaining up your portfolio to meet your needs, which is something important to do if you’re, you young and you’re saying, well, I’m going to hold this till I retire. Okay, well, let me load up in things that I’m happy to hold for 20, 30 years, regardless of what happens over a one week period. And I think, again, that can be quite tough if you see red in your, I mean, some of the biggest mistakes I’ve ever made is selling a stock too early because of that at the beginning. You know, there’s, I mean, I’ve, at times I’ve had in my portfolio, Apple, I’ve had Meta, I’ve had Amazon and I’ve, you know, I’ve taken big, half decent wins on them, but they’ve come under pressure where they’ve dropped, say 20% from the high. Oh, this is over. I get out. And then, you know, this is years ago now. So think of how much they’ve, you know, gone higher in the last sort of eight years and imagine if I just held. I

[42:04] Sammie Ellard-King: know, I know. You do beat yourself up, but I just see it as a never ending learning experience.

[42:10] Sam North: That’s why I love the, love working in markets because never, you know, never ending learning experience.

[42:16] Sammie Ellard-King: Love that from Sam. Okay. Next up is another favourite of the podcast. His name is Michael Taylor from Shifting Shares. Now this is a little bit of a shorter clip, but it’s an important one. And it’s a question we get asked a lot. Should I lump some into the market with a big amount of money or should I split it up over months or periods of time? And we’re going to find out now with Michael Taylor. Let’s say, for example, you are investing into funds right now. Yeah. Or you’re thinking of investing into funds and I get this question like, I’ve just come into some money. I’ve got 10 grand or I’ve got 50 grand. What do I do? Do I lump some or do I dollar cost average? So putting the money in each month.

[42:54] Michael Taylor: Right. Well, the answer to that depends on do you want statistically better or do you want what’s better emotionally because statistically lump sum is better 67% of the time there’s been research 67 yeah obviously you can tweak the data to manipulate it but in general that’s because markets go up over time so if you put a lump sum in and markets generally go up it’s going to be better now you could put you know a lump sum in today market collapses in a month 50% which it has done 2007 GFC things take a bath if you do your dough and then pull it out and then you avoid the market forever it doesn’t really matter if it’s statistically better because you’re not going to be in it and you’re not going to profit so if you can’t really accept that and the thing is with volatility everyone likes it when things are going up it’s when it’s going down that they don’t like it so if you think it might be better to just work your way in then do that and yes statistically it might not be as good but it might be better for you yeah so there’s no one size fits all question it’s really down to your emotions I guess

[44:11] Sammie Ellard-King: totally man like we had it even like the correction recent correction and a lot of people messaging me like oh I came in some money and I put it in and like I’ve lost I’m down two grand now and like I’m freaking out what do I

[44:24] Michael Taylor: do yeah

[44:25] Sammie Ellard-King: and I was like you know you’re just gonna have to you’re waiting out because that’s what you were going to do anyway. Yeah. So like, you know, if it was going up, you weren’t going to touch it. So it’s just, it’s just the inverse of that now.

[44:36] Michael Taylor: Yeah. Pretty much. Yeah. And

[44:38] Sammie Ellard-King: I always say to people, like, if that is you, like if you’ve never invested before and you’re starting with that and that is your first thing you do, that is a bad idea just because you don’t know about yourself until you go through that moment. Right.

[44:54] Michael Taylor: Yeah.

[44:55] Sammie Ellard-King: And you see that 10%, 20% drop. and then suddenly you’re like, I’m finding out a lot about myself. Because for me, the first time it happened to me, I was like gut wrench. Now I’m like, woohoo. But like, this is, there’s a different, because I’ve been through it. So if you’ve never experienced it, you don’t know that about yourself, right? Very well put there, Michael. Now, next up, we have ex-Credit Suisse banker and trader, Rich McDonald. Now, Rich has done so many amazing things in the industry and he’s going to talk us through how you can actually assess just by looking and thinking feeling things in the world, whether or not something may or may not be a good investment. He’s going to talk about how to build a portfolio and how to manage risk over time and his thoughts on crypto. Let’s get into it. PE ratio is a really important factor here. Were there anything else that you look to consider? Were you looking at revenue increases and net profit and debt and things like this as well?

[45:48] Rich McDonald: I would, I’d more look at, because that’s maybe getting a little bit too technical for somebody just on their starting. I Okay. Right. And just do a little taste test like Palantir at the moment. Yes. Everywhere. Everywhere. And everybody’s talking about it. If you’re sitting in the pub and your mate tells you, I’ve just doubled my money on this thing. Yes. Right. The natural thing as humans, we want to be part of a group and we want to be a successful part of a group. So if he’s made a hundred percent on it, I want to get involved. Right. I mean, Bitcoin’s billion. on this whole theory right is I want to be involved in this so I’m going to buy it is that the right time to go out and buy Palantir after it’s already doubled and doubled and doubled again if you learn PE ratios you can see that it’s one of the biggest bubbles of all time in history because it’s something like 600 times earnings 600 now 600 oh my god so you got to be really careful and just learning that means that okay I going to the pub and instead of going oh great yeah it’s like a horse tip yeah i’ll stick a tenner on that in the 310 at Haydock you know you go god do you realise do you is is now still a good time to own it do you think do you think you should be taking a little bit of profit there

[47:13] Sammie Ellard-King: yeah

[47:14] Rich McDonald: because it seems like my taxi driver just told about and my mum just said oh what’s this about palantir so maybe it’s time you know to reduce your exposure let’s say

[47:25] Sammie Ellard-King: is i i sold a lot of my Bitcoin that I had when my mum started talking to me about it. I was like, okay, this is way too much now. And she’s still got it. And it’s at the highs. No, no, she was like, shall I get some of this Bitcoin thing? And I was like, whoa, I am done. If you’re now talking to me about this, this is not a good sign. It’s a

[47:47] Rich McDonald: short-term warning, right? Maybe it’s just moved too fast too soon and it needs to consolidate for a while. That’s what happened to Nvidia, right? Nvidia had hasn’t gone up for 12 months. Yeah. Because everybody got on the hype train and it moved sideways. You know, now the FTSE couldn’t be more opposite of moving sideways, right? You’ve got stocks like Rolls-Royce that have gone up more than NVIDIA, right? Marks and Spencer’s has gone up the same as NVIDIA. Yeah.

[48:16] Sammie Ellard-King: Love a bit of Marks. It’s

[48:18] Rich McDonald: the same, right? You can walk down the high street and you can have a real, you know, look around and feel around as to what when Greggs came out with their vegan sausage roll share price absolutely flew for the next two years so you don’t have to be some kind of tech expert you know you can look closely

[48:42] Sammie Ellard-King: you can do it based on feeling and what’s happening and around you as well and then obviously looking at the p ratio looking at his performance having a little scout around and then making a calculated investment into that with a poor And that’s

[48:59] Rich McDonald: it. But at the same time, I think everybody should be at least 2%, right? In crypto? In

[49:35] Sammie Ellard-King: higher volatile assets, you mean?

[49:36] Rich McDonald: Yeah, 2% in crypto because there is a chance it could be something, right? Now, I believe in gold very much. So is Bitcoin in particular digital gold? Quite possibly, which means that, yeah, I’ve got to have a proportion and more and more pension funds are starting to go down that route as well with the ETFs available and

[50:01] Sammie Ellard-King: yeah yeah it’s one of those things it’s like just a calculator so you do that well you know let’s say you’re picking your Marks and Spencer for me I like to keep my individual holdings between 20 and 30 percent depending on the amount of time that goes in there but because the way that I invest I do heavy global tracker UK tracker and then very heavy Nice. Nice.

[50:56] Rich McDonald: a growth sector but they’ll know retail really well and they’ll have been able to play things back in the day it was super dry right so I was really lucky I managed to buy 3% of super dry of the company when I IPO’d and we and this is for the funds not for myself and I had a great run I went from £5 to £20 and it was literally because I loved the clothes you know it was it’s gone off the boil though isn’t it oh it’s terrible yes he’s um well he left Julian Dunkerton left and then yeah it went downhill yeah um but it’s the same you know French Connection we’ve seen Ted Baker yeah um you know um Zara so I mean for for anybody out there who loves Zara buy the shares you know it’s it’s been incredible um the company’s called Inditex Inditex yeah but it’s the same for H&M you know H&M has had a huge run anything like that that you You’ve got your own feel. I say the front page of my iPhone screen. If I’ve got an app on the front page of my iPhone screen, then that means I use it and it’s there for a reason. And if I’m, you know, if I’m the product as in I’m getting sold things, they’re making money, then yeah.

[52:16] Sammie Ellard-King: Yeah. I love that you said that because that’s what I did with Facebook. It got absolutely slammed. Yes. And I didn’t buy into it because I just had this weird like thing and like I was like I don’t like Mark and I was like okay sorry Mark if you’re listening to this please don’t mark down yeah I know please don’t mark down in your AI whatever you’re doing but the end of it was I just didn’t want to get into Facebook just from personal reasons but then I was watching it getting absolutely tanked and it was very aggressive and it got to the point where I was like this is a global mammoth company there is only a matter of time before it turns around and so I got in it did go lower for a little while and then it just went gangbusters for like 18 months and it hasn’t stopped and it’s probably my best performing over the past like 18 months now

[53:08] Rich McDonald: fantastic yeah that’s and that that’s right because it was the end of 2022 I was in Colombia in Medellin and I remember exactly where I was when I was looking at and it dipped under $100 yeah

[53:19] Sammie Ellard-King: that’s exactly what I was watching I was like whoa yeah this is a billion dollar business killing it with revenue you like it’s just messed up it’s you know

[53:30] Rich McDonald: yeah yeah he lost his way with a vision goggles for a while and then but yeah now 660 and he’s the king of AI so yeah there’s little beauties like that but you know you don’t have to to be doing hours and hours of research and that was a gut

[53:45] Sammie Ellard-King: feeling and a 15 minute like okay they’re doing pretty well yeah gonna take a little bit of a risk

[53:52] Rich McDonald: because you are the king of Instagram so you know all about it yeah

[53:56] Sammie Ellard-King: I’d be silly not to. It’s the first app I’ve been on now. But you’re right. That’s exactly it. But we say as well, we say to people like, walk around your house, what are the 20 products that you’re picking up every single day? And usually within that, there’s a good four or five that would be a really great investment.

[54:14] Rich McDonald: I mean, COVID is a classic, right? The best opportunity ever to buy hand sanitizer, right? Reckitt Benckiser and condoms. That was the two companies they own, Durex as well. And And then Zoom. You could buy shares in Zoom and you could buy… It went

[54:30] Sammie Ellard-King: mad,

[54:30] Rich McDonald: didn’t it? Ballistic. And then Peloton.

[54:34] Sammie Ellard-King: Peloton.

[54:34] Rich McDonald: So it’s just common sense a lot of the time. It really is.

[54:39] Sammie Ellard-King: It really is. And I think that’s where people look at investing and they feel like they need to be, you know, looking at price to earnings ratios versus X, Y and Z and then the candles and it’s like… And then they go, no thanks. But actually a lot of it is like… I think there’s something in that.

[54:59] Rich McDonald: And if you get to a certain stage as well, it’s just fun, you know, because you go to dinner parties and people will be speaking about stuff and you have an idea that, yeah, what’s the new up and coming thing to be involved in.

[55:14] Sammie Ellard-King: Absolutely love the way that Rich looks at the world. And now we’re going to jump back into another part of this Sam North episode with eToro, because we’re going to be talking about how we can build on what we’ve just aligned with Rich about how to actually put a portfolio together and also how to use my own 80-20 strategy. Let’s jump into it again with Sam North. How are you setting up then? Because you mentioned index funds and you mentioned that you’re getting into lots of different things from small to medium to long term. How are you then proportioning some of this? Are you splitting up by percentage?

[55:50] Sam North: Yes. So generally speaking at the moment I enter a stock I won’t really have more than say 5% on my portfolio in that one stock. So it might be that, you know, between 3% and 5%. 5% if I really believe it’s, you know, top conviction for me, if it’s a little bit below that, or maybe a higher risk, but more reward, it might be a 2%, 3%. So I have, generally speaking, it might be sort of 10% to 15% stocks at a time that I like. Okay, that’s your total holdings. Yeah, don’t really go much over that. Well, it just gets hard to manage. It gets hard to manage. But I also am very well aware that someone listening to this go well what about that stock what about these other 20 stocks that have gone up

[56:30] Sammie Ellard-King: 200%

[56:30] Sam North: yeah I don’t care about it because the way I’m doing it is the way I’m doing it I believe in compound interest and I know you’re a big fan of all of that as well and you know if you let the stats do the talking in the time when I’m ready to retire and play golf and tennis every single day you know the work will be done for me so yeah I don’t want to have a massive portfolio and I think actually for newer people they might not even be ready to invest one thing I think is really useful on eToro, and you don’t need money in your account to do this, is look at these incredibly successful popular investors. What do they do? You know, how many stocks do they have in their portfolio? What is their weighting to each one? Very rarely you can have someone with a weighting to a stock over 10%. You know, how many stocks do they have? How long do they hold these stocks for? And you’ll learn so much from that. Yeah. How are they moving in and out throughout the

[57:21] Sammie Ellard-King: year?

[57:21] Sam North: Yeah. And September was a great month in the market this year, but usually it’s bad. If you look at a lot of these popular investors or you look at the stats behind September, it’s usually a really bad month for riskier assets. So you see these trends and you can play off that. But, you know, if I were to start playing golf tomorrow, I’m going to look at videos of Tiger Woods. I’m going to look at, you know, let the

[57:42] Sammie Ellard-King: pros.

[57:44] Sam North: Exactly. I’m not just going to go out there and just try without ever learning

[57:48] Sammie Ellard-King: anything. Yeah, it was a big, big part of how I learned was watching a good handful of investors on etoro

[57:56] Sam North: yeah what were you doing yeah why are you doing it like you said with the feed post they explain all of that stuff as well they

[58:01] Sammie Ellard-King: do and it was really cool to see that you know back in the day when i first started you know i just like bought microsoft yeah it’s like i’ll buy some blue chips and buy a few funds and that’s what i did and they’ve done great and i still have them to this day yeah but then i was like now i want to know like oh like i want to try and find because everyone’s like says you know it’s always fun when you pick the amazon of the the future.

[58:26] Sam North: That just goes and goes and goes. And it just

[58:27] Sammie Ellard-King: goes and goes and goes. And my Amazon and Microsoft have just gone and gone and gone, which is fantastic. But then you kind of go, oh, what’s next? What’s next, yeah. And you get interested in it. But some people don’t. Which is fine. Which is totally cool. Exactly right. Like, you can just buy your funds, crack on with your merry life and go about your day. Me and you, on the other hand, like getting geeky, you amplified… Yeah. Playing words, but… By tenfold for you. But it’s… If you enjoy it, go for

[58:57] Sam North: it. Yeah, 100%. But just don’t go all in. Yeah, don’t go all in. If I liked, say, sportswear, for example, I would say, okay, I’m going to look at Nike, Lululemon, Adidas, On Holding. I’m going to look at all of these companies and line them up and say, which ones do I maybe prefer? But I’m not just going to go all in one. It might be that I have a selection because the one I choose might not be the best option as well. And I think that could be quite a useful thing to do is, yes, you want to be able to pick those winners and to get your NVIDIA’s now you’ve got hold for a long period yeah you know that you know do I think NVIDIA’s going to be hiring 10 years most likely oh that’s mad isn’t it you know and then so you’re going to have some people that have bought you know 3, 4, 5 years ago oh good

[59:38] Sammie Ellard-King: I think by the time this podcast comes out they’ll have trumped Apple yeah it keeps flirting doesn’t it from where it was like a couple of years ago they were nowhere near incredible incredible rise and that you know do

[59:52] Sam North: you hold it do you I’ve only got a small part of the original position I had in all honesty

[59:58] Sammie Ellard-King: I pulled out probably last year because I was like this is too much

[1:00:02] Sam North: yeah exactly and that can be quite tough yeah 100% and I think what can be very you know for example I’ve got a stock in my portfolio at the moment which is up 230% which is great what I’ve done recently is I’ve taken some of that position off the table and now I say whatever happens to this I don’t care I’ve already made money on it even if it was to go to zero I’ve made money on it see where it is in 10 years. I’m not going to touch it. No interest now. And if it goes up and it keeps going the way I do think it will, great, I’ve made more money. But yeah, fingers crossed. Oh, we’ll have to chat off air about

[1:00:38] Sammie Ellard-King: what that is. Yeah, yeah, yeah. You’re obviously finger on the pulse, lots of things going, you’re getting some information from some of the top people in the world. What kind of trends are you looking at at the moment?

[1:00:51] Sam North: I think for anyone involved in the markets, the two that are going to stand out are going to be AI and crypto. And I looked at crypto, you know, when I first sort of really came across it with an interest would have probably been 2017, 2018. And I remember speaking to someone a couple years after of that, 2019 or 2020, about it. And they said something that’s always stuck with me, and I really believe in what they said, is that crypto now is like what the dot-com was, like tech stocks were. You’re going to have your Amples, your Apples, your Amazons, your Apples and Microsofts that will go up 20 years later and really be there, and they’ll get incredible returns. Crypto is like that now, where if we fast-forward 10, 15, 20 years, some of the top assets will remain, and they’ll just be light years ahead of where we are. But a lot won’t. You know, you like your pets.coms and stuff like that obviously didn’t you know make it to what they are now so crypto I still think it’s got legs to really run and move AI is obviously something we talked about earlier and I think is something where we’re still in the first innings of a four quarter game you know we’re really still so early and I think that’s why it’s been quite an extravagant rise though yeah I feel there’s there’s going to be new companies within AI that we haven’t even heard of that are going to come out of nowhere. They’re going to be the new Googles. Exactly. They really are. And that’s why I think diversification within this industry will be key. I also think right now I do like China. I do. And there will be people shouting at the screen. I feel like they’ve obviously chucked some stimulus. I think they’re going to do more. I think they’re going to stick with it. It’s come so low that I think there are some good opportunities there. It’s not me saying I’m going to put 5% on a stock or 20 on an ETF it’s lower. Do you

[1:02:42] Sammie Ellard-King: worry about like the macroeconomics and the sort of political warfare that’s going

[1:02:45] Sam North: on? I do but I also feel like a lot of that has been priced in and I also think with the sort of time horizon for how long I’d be looking to hold I could weather a little bit of more negativity anyway.

[1:02:59] Sammie Ellard-King: Yeah.

[1:03:00] Sam North: If you were to say to me you’ve got 100% of all your money on an area near the bottom end of the list China but I also feel like the reward is good and actually the risk isn’t as big right now. As it has been. Has been. Yeah. Also like healthcare. I think healthcare is an interesting area. Renewables too. I think, you know, depending on who wins the US election, I think certain companies will do well there as well. Yeah. There’s a lot to like in healthcare, I think. Yeah. Absolutely. I mean, you just have to look at, what is it? Novo Nordisk, how well they’ve done. Yeah. You know, all these celebrities. Well,

[1:03:38] Sammie Ellard-King: it’s back to my point about biology.

[1:03:40] Sam North: Yeah.

[1:03:40] Sammie Ellard-King: It’s, The advancements in that space from both food and healthcare perspective is just absolutely insane. And some of these guys, you know, the curing diseases now with a pill that they take in 10 minutes, they have no disease. That’s a real life thing that’s probably going to be one, two, three years out.

[1:04:00] Sam North: And then go five years and there’ll be companies that are creating things we can’t even imagine that are new companies and they’re going to be the next Novo Nordisk and the biggest company in Europe or the US or whatever or the world. Yeah,

[1:04:11] Sammie Ellard-King: 100%. I know I mention him probably every podcast, but I just think he’s great. He’s Andrew Craig. He’s got a book, Future is Biotech. And it blew my mind. It’s like we’re going to have these little things on our desks which are microchip computers and it’s just like a living organism.

[1:04:28] Sam North: It’s absolutely insane. An area that is fascinating. And I think if anyone wants to get geeky, go down that route.

[1:04:34] Sammie Ellard-King: So guys, this is it. I thank you so much. I hope you’ve learned a ton about investing and you feel a lot more confident about making those decisions right now. It is actually amazing that we’ve gone 150 episodes of this podcast. If you’ve not subscribed, please do subscribe. If you haven’t shared it with a friend or a family member, please do. It helps us grow the show. We want to spread the message as much as we can and I will catch you on the next one, guys. Peace out.