investing advice

KEEP CALM AND CARRY ON

What should a long-term investor do? How do you save for your goals and aspirations? Adam Smith, CEO of Saxo Australia, gives us his seven top tips on becoming a better investor.

In the words of American economist Benjamin Graham, “the essence of investment management is the management of risks, not the management of returns.” Understanding your investing psychology is crucial to building your portfolio and managing risks. Different investors realise their dreams at different times.

Some investors are willing to take on investment risk because they are confident that the stock market will recover in the long run, which fits their long-term investment horizon. Other, more cautious, investors may regard a 20 per cent drop in the value of their portfolio as disastrous. These investors may have loss aversion, meaning they fear losses and feel the pain of losses more than they enjoy gains. For your long-term financial health, it’s critical to understand which type of investor you are (risk averse, loss averse, risk-taking or long-term) and to set your portfolio at the appropriate risk level to avoid panicking at the worst possible time, selling out and incurring significant losses, only to jump back into the market once the gains from any rebound are in the rearview mirror.

ARE YOU LOOKING FOR YOUR NEXT INVESTMENT?

Here are some valuable tips on how to pick it. Investing can be a daunting task, even in the best of circumstances. We want to make things a little easier. While not every investment will be a winner, understanding what makes an investment worthwhile can help you build an enviable investment portfolio.

Choosing a good investment is a combination of understanding their financial situation and identifying the more significant trends that will shape the market in the future. Whether you’re a seasoned stock market veteran or a complete novice, refreshing and refining your investing strategy is never wrong.

With that in mind, consider the following seven suggestions to help you become a better investor.

1. Know what you want from your investment portfolio

Before making any market moves, it’s critical to understand what you hope to gain from your investments. Everyone has different goals when investing, so being honest with yourself is essential. Looking for high short-term returns? You may want to make ‘riskier’ investments. Do you want to start building a long-term nest egg? You may want to consider investing in high-quality bonds.

Know what you want from your investing experience before putting your money where your mouth is. This way, you can be confident in your decisions and satisfied with the results.

2. Observe what sectors are experiencing change

A changing world means shifting fortunes for businesses all over the map. While everyone will recommend different sectors, keeping an eye on commodities (particularly companies involved in mining and exporting oil, coal, gas and gold) is worthwhile as the world is facing a shortage of real resources and rising demand. Consider companies that manufacture electric vehicles, as the market is expected to grow in the coming years.

Identifying market trends will help you understand how the market is thinking now and how it will think in the future. World events, government legislation and innovation can all change the fortunes of companies and even entire sectors, so keeping up to date is a must.

3. Identify companies that will play a crucial part in pushing their sector forward

Now that you’ve identified which industries are changing, look for companies that will drive the change within those industries. For example, if you’re interested in electric vehicles, you might consider investing in electric car manufacturers such as Tesla and Volkswagen. You can also consider investing in companies that mine materials such as lithium, aluminium, copper, cobalt and nickel, all of which are used in producing electric vehicles.

Keep in mind that the market is constantly evolving, so identifying these changing sectors early on can help maximise the profit you’ll make from your investments.

4. Don’t put all your eggs in one basket

Compared to a portfolio that only includes stocks from one sector, a diverse portfolio is more likely to succeed over time. If you only invest in a few companies, one company failing or underperforming can spell disaster. On the other hand, if you have a diverse portfolio of companies from various industries, you are much more likely to withstand changing market conditions.

5. Numbers don’t lie – so look at their financials

Before investing, look at the company’s public financials and ensure it has a track record of increasing its cash flow and earnings. You can use a platform like ours or Yahoo Finance to quickly and easily determine if a company’s earnings and cash flow have been increasing, and if these trends are likely to continue. Such numbers, known as ‘fundamentals', can quickly help you understand how the company performs and manages its accounts. Fundamental analysis is integral to deciding which companies to invest in, so don’t rush it. When you select companies with rising cash flow and earnings, their stock tends to increase. You don’t want to be backing a company that’s not gaining business or is going backwards financially.

6. Think with your head, not your heart

FOMO (fear of missing out) can be a powerful motivator, especially if you’re part of a group betting on a specific stock or sector. However, if the numbers don’t add up and it’s not a stock you’d typically invest in, don’t take the risk.

7. Time in the market is better than timing the market

Stock and bond price declines, as we are currently experiencing, create opportunities to invest at much lower prices. Investors should not try to ‘time’ their investments but instead spread them out over regular intervals. This is known as dollar cost averaging and is accepted as an excellent way to build portfolios, especially when stock prices are volatile. The reality is that most gains in a portfolio come from asset allocation – the mix of stocks and bonds – rather than picking winners in a selection of individual stocks.

MANAGED PORTFOLIOS MAKE YOUR MONEY WORK FOR YOU

Finding the right mix of stocks and bonds for your risk tolerance and life stage is challenging. Only investors with the time and knowledge should attempt to create and manage their asset allocation.

Research from The Advisable Australian 2022 report illustrates that many investors in Australia are looking for sophisticated investing support yet are being priced out of private wealth management services. Managed portfolios can be an excellent way for time-stretched investors to diversify their portfolios, grow their wealth and minimise risk.

In 2023, Saxo will launch lowcost, expertly managed portfolios to help bridge the chasm between Australian investors and the everpresent opportunities across the global markets. The portfolios are curated by renowned masters of the global markets, including Black Rock, Morningstar and Nasdaq. The funds dynamically allocate assets that reduce your risk in the bad times, and shift assets when the markets turn good again, so you can keep calm and carry on.

DIVERSITY IN RETAIL

New research into long-term employment for young adults with psychosocial disabilities is helping to change our workforce for the better.

words: Matilda Meikle

The new three-year project launched by the Queensland University of Technology (QUT), the Australian Retail Association and Disability Employment Australia will help to nurture a more accepting workplace for diverse Australians. The project will involve 120 participants, with trials in Brisbane, Sydney and Melbourne to establish their “retail readiness.”

The study, a big step forward for creating a more inclusive country, comes after the Australian Government provided an $867,420 grant, which was administered by the Department of Social Services. Thanks to this funding, the QUT research team hopes to gain insight into how to prepare and support workers, and deliver impactful training to increase employment opportunities in the retail sector for workers with psychosocial disability.

AUSTRALIA’S RETAIL INDUSTRY

According to the Australian Institute of Health and Wellbeing, young adults between the ages of 15-24 with a disability are more than twice as likely to be unemployed or experience longer periods of unemployment.

At the same time, due to the continued effects of Covid and an ongoing workers shortage, there are over 46,000 vacant jobs in the retail sector. This large gap in the workforce is a problem the QUT project aims to solve, focusing on helping the retail sector to develop a more accessible environment for diverse workers.

Once the program has been completed, trainees will be provided with a certificate from the Retail Training Institute, which will allow them to access new opportunities in a previously closed employment market. These trainees will be well equipped with the skills needed for successful retail careers, meaning both employer and employee can thrive.

THIS PAGE: EMPLOYING 1.3 MILLION AUSTRALIANS, RETAIL IS ONE OF THE MOST DIVERSE SECTORS IN THE COUNTRY.

“Developing programs to help people with psychosocial disability overcome barriers to employment enables them to enter a workforce that provides gainful employment, social engagement and meaningful income.”

THE STUDY

Professor Gary Mortimer, one of the lead researchers on the QUT team and chair of the ARA’s Consumer Research Committee says that research shows customers developed positive relationships with brands after engaging with diverse workers.

“Developing programs to help people with psychosocial disability overcome barriers to employment enables them to enter a workforce that provides gainful employment, social engagement and meaningful income,” he says.

“This is real-world research that’s going to deliver real outcomes for not just retail businesses, but society in general.”

And Gary isn’t alone in that sentiment. The Australian Retailers Association (ARA), one of the leading companies launching this project, wants to create a unified and diverse workplace. As a sector that employs 1.3 million Australians, retail has the opportunity to grow into a community of accepting and forward thinking team members. The ARA informs, advocates, educates, and protects the retail sector, hoping to turn this dream into a reality.

Paul Zahra, ARA CEO, says retail is one of the most diverse work sectors in Australia.

“Improving the diversity, equality, and inclusion opportunities for people with a disability is an important focus for our team members.

“We applaud and warmly welcome this investment from the Federal Government which will be critically important in undertaking this work.”

The project is still in early stages, but could signal the beginning of a more open and accepting workforce, providing diverse Australians with employment opportunities and helping to educate the public.

Monitor where it matters most with InfraGuard

Senceive’s InfraGuard wireless monitoring system is ideally suited to sites and structures that are considered valuable and vulnerable, and where there is the possibility of sudden, potentially catastrophic movement.

InfraGuard, available from Position Partners, is a sophisticated wireless monitoring solution to help asset owners manage critical infrastructure.

It not only tells you what your assets are doing – it shows you. Smart tilt sensors respond to movement to give you immediate insight of an event at a remote site. You will get alerts of small-scale movement which could indicate the early signs of a slope or structural failure, and graded alerts of further movement, backed up by photographic images.

InfraGuard is primarily intended to detect movement but can also include cameras that are triggered by tilt sensors, providing an instant view of potential problems so that users can differentiate between false alarms, small-scale movement and large-scale movement that could represent an emergency – all without visiting the site.

With a proven track record of detecting potentially disruptive and dangerous events, InfraGuard can be your eyes and ears on site, without needing feet on the ground.

Data assessment and management is performed in the field without relying on external server analysis – if a sensor detects movement that breaches a threshold, it will trigger a sample to be taken on all the sensors within its network. This is crucial for interpreting an alert to understand its validity or impact.

When movement is detected, a higher sampling rate is often required to understand the rate of change and to plan appropriate steps. Pre-defined parameters and trigger levels can be programmed, which instruct the system to change sampling and reporting rates according to the degree of movement.

InfraGuard is built around the Senceive FlatMesh intelligent communication platform and therefore provides long-term, low maintenance monitoring, with readings taken at set intervals in normal conditions. When the system detects movement, it responds automatically by accelerating sampling and increasing transmission rates, with the extent of the response related to the severity of the event.

The system is suitable for many monitoring applications including: • Sites where there is the possibility of sudden, potentially catastrophic movement. • Sites that are considered valuable and vulnerable. • Monitoring slopes such as road and rail cuttings, embankments, levees and mines. • Sites where early warning of failure such as landslips and rockfall would be needed. For more information, visit positionpartners.com.au/product/ infraguard/