DAVID HARVIE | from SAXO Markets

Somehow markets seem to be heading upwards just as the news seems to be getting worse and worse. Higher interest rates mean less money for people to spend, which will have a negative effect on company profits. There may even be a recession, but are there ways to benefit? Joining me today is a glass half full kind of guy, David Harvie from Saxo Markets. We wade into the shallow of Commodities and Foreign Exchange.

David is the Country Head of Direct Sales at Saxo Markets. He is responsible for designing and executing strategies to grow sales as well as improve customer experience and retention for Saxo’s suite of investment offerings, while overseeing the team of local relationship managers.

He has more than 20 years’ experience in the financial services sector providing strategic wealth management advice and solutions to family offices, business owners and individuals.

He is a highly regarded MC and keynote speaker. As you'll hear in this episode, he is a strong advocate of simplifying often complex financial strategies and terms.

TRANSCRIPT FOLLOWS AFTER THIS BRIEF MESSAGE

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EPISODE TRANSCRIPT

Chloe (1s):
Shares for Beginners. Phil Muscatello and Finpods are authorized reps of Money Sherpa. The information in this podcast is general in nature and doesn't take into account your personal situation.

David (12s):
I thoroughly encourage people to consider dollar cost averaging. What does that mean? It's a fancy way of saying slowly dipping into the water over time. So a hundred k example, you might take 12 months to deploy that you might automatically put into the markets every single month. And on top of that, if you then have surplus cash flow, might be 500 a month, might be a thousand month, whatever that may be. Might be your superannuation contributions every quarter or every month Paid, paid by your employer, whatever that may be. Deploy it and just do it on an automatic basis.

Phil (51s):
G'day. And welcome back to Shares for Beginners. I'm Phil Muscatello. Somehow market seem to be heading upwards just as the news seems to be getting worse and worse. Higher interest rates means less money for people to spend, which will have a negative effect on company profits. There may even be a recession, but are there ways to benefit? Joining me today is a glass half full kind of guy, David Harvie from Saxo Markets. Hi David,

David (1m 16s):
Phil. Good to, good to see you. Yeah,

Phil (1m 18s):
Thank you very much for coming over. David is the country head of direct sales at Saxo Markets, so we're in a tricky investment landscape. Haven't markets always been a little tricky to Navigate?

David (1m 29s):
Ah, look, as I said it, it's good to see you and it's good to pop over to the studios here in, in beautiful Balmain. Have they always been tricky? Probably, yeah. Well, actually, before,

Phil (1m 41s):
Before we started this recording, you, you said that you were, you started at, or you were working at BT Yeah. In the nineties. Yeah. And it was a, a golden age halcyon days. There were no global financial crisis. No, but there were high interest rates then, of

David (1m 54s):
Course. Yeah. Yeah, there were. And I mean, look, I, I'm a little bit of a history buff and I sort of go back to, I mean, obviously those days, 30 years ago, those listeners that do remember Banker's Trust as opposed to BT or Westpac, it, it was Halcyon, you know, and we were in the ivory towers and, you know, and, and the big rooms were the big screens. And, and we kind of got the sense, particularly as a young male, young man entering financial services, that nothing would ever go wrong. Well, of course, you know, things can, but look, have markets always been tricky. Markets have been around since sort of civilization started.

Phil (2m 34s):
Oh, You've been deep history.

David (2m 37s):
I'm really showing my age. You know, the, the, the Romans started to think about provisioning for wheat and grains so that they developed futures. And we fast forward, I don't know, a thousand years plus plus. And the Dutch got all caught up with the tulips. You know, we had that problem

Phil (2m 57s):
And invented the corporation.

David (2m 58s):
We had the, the corporation come along. You know, we had trade, obviously we had geopolitical sort of ructions as empires and economies grew. So markets, markets have always been tricky. I think if I then fast forward to probably what's a little more recent history, and, and that time at BT, you know, we then went into the tech rec, you know, we went into y2k. We had, we had Asian currency crisis, the big one of course, which is probably, I think, been forgotten unfortunately a little bit. And the most recent one was the GFC.

David (3m 39s):
And then the topic dejour today is interest rates. And really, Phil, if you put that in context, we're probably returning to normal. The last 10, 10 to 13 years have been abnormal post GFC really, really, really low interest rates. Abnormally low. Yeah. And as humans, we tend to acclimatize to things pretty quickly. And that's what the investor, that's what the mortgage holder, and that's what most of us, particularly Australians have now become used to.

Phil (4m 12s):
So despite this, do you think it makes investing more difficult?

David (4m 17s):
I think, I don't think it makes it any more difficult. I actually think it, this is gonna sound maybe a little bit glib. I think it makes it fun. Yep. I really do. You know, I think if I think again, back as an advisor, you know, I spent a lot of, lot of years as an advisor, probably 15 plus years, and the last sort of dozen plus years in, in the advice to many space, which is kind of what we do at Saxo. What we do at Saxo is really try and provide a platform to express an investment idea. Okay. But when I think, I think back to the times, the really heady times, you know, it was, you could literally buy anything and it would go up, you know, and in a rising tide, most ships, even the leaky ones would, would kind of kind of rise.

David (5m 3s):
But, you know, the old adage goes, and, and a falling tide or an ebbing tide, that's when we see, you know, the holes in those ships or who's not wearing, who's something naked. Yeah, well, who's not wearing any underwear. So I actually think it's really interesting now. And I think when we, we speak to our clients, what we know is the clients who spend a little bit more time, they do their due diligence, you know, there's plenty of opportunity out there. You know, I, I do cast my mind back again to the depths of the GFC and the nadir. And were on the monopoly board. We weren't gonna pass, go nor collect $200. Yeah, that's exactly the time when I had clients, little old ladies buying Commonwealth Bank.

Phil (5m 45s):
I had really smart clients buying the financials. You looked at somebody like a Warren Buffett, who we all know and love and admire, wading into financials, you know, spending 5 billion in Goldman Sachs, and he tripled his money in a, in a couple of years time. So are we at that point of crisis now? No. And, and we don't think so at Saxo, but we are certainly at a time when one needs to be really, really prudent. And I, I think that's fun. I think it's interesting. Speaking of swimming naked, the BNPL sector by now, pay later sector seems to be something. I mean, we've just seen the collapse of OPY who's a one of the players. And it seems to me that that is a particular kind of business that has been negatively affected by higher interest rates.

David (6m 31s):
Yeah, look, it's probably outside the remit of Saxo. So I, I'll I'll put on sort of the David Harvey hat here. Look, we've all done it. I, I, I've, well, okay. I've done it. You know, so I've been caught up with credit cards. You know, I think back to my, actually really lucky I had a, well, I still have a wonderful father who was a bank manager in a really small country town. Okay. And just, just on that for a moment, you know, dad was someone you don't get to meet these days. He's a bank manager. Yeah. In a small country town. They don't exist anymore, unfortunately. But I, I was fascinated, you know, I'd, I'd sort of sprinted the bank after school.

David (7m 11s):
I'd sit up and dangle my feet over the little sort of stool. I had my big, big red ledger book. And in would come customers and you'd sort of do a couple of things you don't do anymore. The first thing that you would do is you would count cash, cold, hard cash, and then you would record it, or you would withdraw it, or you would deposit it. The other thing I would notice is when we'd spend an hour to go to shopping over at Inverell or Tamworth or whatever, mum would hand over this thing called cash. Okay? So there was a physical exchange, and as you know, there's a, there's a little bit of a tug on the heartstrings or the purse strings when you physically hand that over.

David (7m 56s):
We now live in tap and go. Okay. And, and I've noticed with my kids 12 and 10, they're really keen to tap. And that's fine. And I think there's a little reminder every single time that we're not just tapping, we're giving something away. So within that context, if I think about buy now, pay later, I probably wouldn't shoot the messenger being buy now, pay later. What I'd probably think about is the root cause and that is that we have to have everything now as opposed to wait and earn and save and invest in those sort of things. So I think that's probably, rather than a crucifixion of young people for using it, I think it's a wonderful opportunity to talk about building a solid financial foundation.

David (8m 39s):
Spend as much as you like in the spending account, go for it. You know, buy the guitars or buy the purses or go on the holidays. That fi that's fine. But if there's, you know, 10%, maybe 15% of your savings going towards investing on your future, that's absolutely fine.

Phil (8m 56s):
Interesting story. The other night I went to pick up a pizza and the bill was $42 for a couple of pizzas, and I had a bit of cash, and I gave the wait person $52. And she said, what change do I give you?

David (9m 13s):
I begrudge. But now I thank my primary school and, and we are in a, again, a small town. So she ended up being the high school mass teacher, and we would spend the first 20, 30, sometimes 40 minutes in class standing, and she would go from person to person with either deduction or addition or subtraction or multiple, whatever that may be such that we would learn to do mathematics on our feet.

Phil (9m 39s):
We shouldn't, we shouldn't boil listeners too much with that stories of Ancient history. We should, we should not. Okay. So cash in the bank sounds like a good deal at the moment, but surely higher inflation's going to be eroding the value of that no matter how much you can get out of a term deposit these days.

David (9m 56s):
Yeah, look, it's a good one. I think, again, I go back ca cash in the bank. A a lot of times people will think, and I've heard them say that I'm sitting on cash, right? And, and I'm, I'm sort of sitting idle, okay, you might hear idle cash. I don't subscribe to that point of view. Doing nothing is doing something. It actually is an investment choice to sit in cash. And so what I would encourage the listeners to do is to think about your asset allocation, i e between risk on and risk off. That's probably a nice bifurcation or a nice place to start. Think about those two buckets. In my risk off bucket, cash is an option, but there are other options.

David (10m 37s):
You've just mentioned term deposits. There's fixed interest or bonds. You might even then start to venture into some other income reducing assets. They might be good quality blue chip shares. They might be real estate investment trusts, they might even be some EFTs, whatever the case may be. But that mix

Phil (10m 58s):
ETFs,

David (11m 1s):
Oh my god, thank God you're here, ETFs, thank you. Exchange traded funds. But that mix is risk off. And then the other bucket you can think about obviously are equities, foreign exchange, commodities, whatever the case may be, and the, and the risk on scenarios. So I'd probably think about that. Then when I think about sort of how I run my portfolio, if we talk about that for a second, I probably think a third, a third, a third, a third of it. I want to really probably go easy on myself. You know, it may or may not produce market like returns. And I'll tend to benchmark that against a relevant index. It might be the ASX might be the s and p 500 or the Euro. If that that's, you know, that's where I am.

David (11m 43s):
A third of it. I want to do better than market. You know, I want to have some beta on top of that, you know, as opposed to just the alpha returns and,

Phil (11m 51s):
And that's picking individual

David (11m 53s):
Stuff. Yeah, for example. Yeah, look, it might be, but it, but it also might be, and, and maybe we'll get to this a little bit later, I think how, again, not plugging Saxo, but what, what I would say is what whatever you are using, you know, whether it be a platform or an online broker, start to think about individual stocks. But start to think about a whole universe out there. And what I mean by that is don't be constrained just by Australia. Don't be constrained just by the US even. And again, I pretend to notice with Australian investors, it's Australia first, which is fine and it then might be US second, but my god, you know, we sit in around about 3 billion people who are really industrious here in the Asia-Pacific region.

David (12m 34s):
And there are a squillion opportunities in that region. And obviously I think another house view, in fact, I know a house view that we have at Saxo is that European markets and European economies are probably going to outperform North America over 23 and 24. So in that proportion of your portfolio, that's probably where you should start to venture. Ooh,

Phil (12m 55s):
Get, get into the luxury bra brands, huh?

David (12m 57s):
Well, and look, that's, that's the last third. The last third is where I'm, again, call it fun, but where I'm going to really start to use my economics background, I'm gonna going to start to think about themes. I might look at a theme called, well the Fed and Mr. Powell in the last couple of days has reaffirmed that we are starting to move toward a disinflation as opposed to inflation. And remember I was actually very fortunate to spend some time with Phillip Lowe earlier this year. And he reminded us of a simple thing. Inflation is the rate of change. So if we think about getting into a car that's acceleration, so zero to a hundred kilometers an hour, that's accelerating.

David (13m 40s):
But once we're at a hundred and

Phil (13m 42s):
We're at a, in a Lambo at the moment,

David (13m 43s):
Well hopefully, or, or, or an Audi or even my nice little Skoda. But once we've reached that sort of terminal velocity or velocity of a hundred Ks an hour, we're not accelerating. We're actually going at a pace. And that's called speed. And certainly as the heat comes out, certainly as interest rates start to bite and they already have, I think the other big moving part is with China coming back online, which it is, they've certainly relaxed policies over there and starting to consume again. And not the least of which supply chains are starting to free up. You know, let's not forget there's a European or an East European war going on. So with all those moving factors, probably not the war, but certainly the other factors starting to alleviate those supply constraints and interest rates biting, inflation is starting to turn.

David (14m 36s):
What does that mean? What it means is there's a tremendous opportunity, there's a tremendous opportunity in commodities. There's a tremendous opportunity, particularly in foreign exchange. And if your investors haven't ventured there, I'd encourage them to

Chloe (14m 52s):
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Phil (15m 10s):
But for novice investors who would be listening presumably to this podcast, how do they approach sectors like commodities and foreign exchange, for example?

David (15m 20s):
I think, again, I'll go back to my BT days now. Bankers trust days, you know, up on level four there, it was the size of a couple of football fields. There were massive TV screens, there were a lot of men, not that there's anything wrong with that. They were all in pinstriped suits, et cetera, et cetera. It was very patriarchal and it was very big bank. And that kind of is a problem for me. And that's certainly a problem for us at Saxo. So what, And it's a problem for investors and it's a problem. I had no idea about how Approach markets, yeah. And I, I can't go and knock on the door at level four of the halcyon halls and say, I want access to commodities or I want access to, to Forex or, or currency exchange. You just, you kind of can't do it.

David (16m 1s):
Well now you can, you know, on again, on a mobile device or an iPad or I tend to use screens at home through our platform, but certainly through other platforms you can al, you can access fx, you can access foreign exchange. How do you express that? You might simply invest in a pair. I'll give you an example. The US dollar we believe will start to roll over. That is start to turn and Go down in value. Go down in value. Yeah. Compared to the Aussie dollar. Yeah, yeah. Compared to the Aussie dollar. If we think about, probably focus on either dollar yen or Aussie dollar US dollar. So let's focus on Aussie dollar to begin with. We think about some of the moving parts we've just spoken about.

David (16m 43s):
China's coming back online. What does that mean? It means that they'll consume more of the things that we dig up, okay? Iron ore et cetera, et cetera. Copper, lithium with EVs consuming more lithium, et cetera, et cetera. So that energy play, that commodities play, the hard commodities will be consumed more. What does that mean? That means they need to be paid for in Australian dollars. So you could argue that there'll be a demand for Aussie dollars. The other big moving part is, again, think back to Mr. Lowe. He bumped up interest rates here in other 25 basis points, a quarter of a percent this week. So did the Fed. It could be said that the Fed is probably a little ahead of us.

David (17m 28s):
Okay? So they're probably got another couple of rate rises to go. And that's what we think is a house as a Saxo house. We also think that's consistent for the RBA. So maybe the FED's a little bit ahead in their tightening cycle and maybe they might move towards easing before we do. But either way, we think that there might be a nice demand for the Aussie dollar. And on the flip side, there might be less demand for the US dollar with lower interest rates. So that's a really cool thing to express. And you can do that with fx. The other thing I would encourage the listeners to think about is if Phil, you own Apple shares or Microsoft or Tesla, anything that's denominated in another currency, in this case US dollars, cuz you're buying it on the NASDAQ or you're buying it on the Dow, or you're buying a stock over in Germany or you know with the Euro, you are already a Forex trader, you are already exposed to currency.

David (18m 29s):
And look, it's alarming to me when somebody books a trip to Disneyland, that might be the first time they ever think about they're Aussie dollars. You know, they might think, oh my god, the Aussie dollar's gonna go down, I might buy some now or do I buy it later? But gee, in your super fund right now, and if you're an investor right now in anything that's other than Australian, you are already doing this. So if you're not looking at this space, you're doing yourself a disservice as an investor.

Phil (18m 59s):
So again, just getting back to the question then, how does a new investor look at foreign exchange? I mean, we're talking about an etf eft.

David (19m 6s):
Yep, yep. Yeah, good question. Sorry. And thank you for being on back on track. This, this look, there's a million different ways. I'll give you two. One is back to our EFT slash ETFs. There's some great ones here. I'm not sure if I can plug anyone, but I, you know, I I, I've used beta shares for example. They certainly live on the Saxo platform. They're nice and clean and easy to understand. On the topic of ETFs by the way, just a little bit of digging a simple Google search jump on and please, please, please have a look at the ts and Cs, how is that ETFs set up?

David (19m 46s):
What is it invested in? The fees and charges, you can look at that as well.

Phil (19m 50s):
They're generally pretty consistent across the industry. But I'd really, really encourage the investor to take just a few minutes just to do a little bit of digging on on what that ETF is doing and what is seeking to express. So for my cash equity, you know, my long investors who are looking for things to go up in markets, generally, that's generally what an investor wants. That's probably not a bad way to go. The other way to do it is to actually get a little bit sexier if I'm allowed to say that. And that is to actually trade currency. And you know what, it's pretty easy. If I have a view that the Aussie dollar's going to appreciate against the US dollar, I buy the Aussie dollar and I'll buy an Aussie dollar US dollar pair and you can do that through FX spot.

David (20m 40s):
Again, nice and easy. You can do very little money as well. So there's very little capital outlay. This is very, very capitally efficient or a capital efficient trade. So again, I would probably start small for the listeners who are interested, we've got plenty of education on the Saxo platform and you're more than welcome and we can share the links and all that sort of stuff.

Phil (21m 1s):
Yeah, no, we'll put that in the notes cuz this is interesting. This is something we haven't really covered ever on the podcast, is foreign exchange, right? Commodities we've done quite a bit and alternative assets and bonds and fixed income markets, but never, never foreign exchange.

David (21m 14s):
Yeah, it's probably my favorite topic. And the reason I love it is again, being in the industry for so long, I was so personally so invested in being invested and and being long and it's particularly coming to Saxo, I've now realized that yeah, there's just a, a whole world of opportunity out there for investors to hedge their portfolio. You know, again, you got a hundred grand invested or a million dollars invested in the US markets, why aren't you hedging it? You know, think of it like an insurance policy that sort of sits on the sideline. If US stocks are going up, that's great, but if you, your currency's going the other way, well then you are eroding your investment gains.

David (21m 59s):
So why wouldn't you hedge against that? And you can do that, you know, you can do that in a relatively capital efficient way. Those insurance policies are are pretty cheap.

Phil (22m 9s):
So let's look at an investor who's coming to markets for the first time right here, right now, in the start of 2023. What would you suggest for them to look at and the ways to approach markets?

David (22m 21s):
Well, I think the first thing, I'd probably say three things. I think the first thing I would say is get started. Okay. Every day, every week, every month it goes by you're missing out. And this is not about fear of missing out, but this is about learning. You know, this is about putting your toe or your feet in the water. I think if I extend that analogy, maybe you don't want to completely jump in, you know, and if you completely jump in the deep end, you might not drown, but certainly you might flail around a little bit. So probably two things I would suggest. The first thing that I would suggest is have a look, just sit back for a moment Phil, and have a look at what is the total amount that you want to invest. Now that might be a lump sum, it might be 10 k, might be 50 k, might be a hundred, whatever that amount is.

David (23m 8s):
And then what is the ongoing amount that you can contribute? And I would really encourage people to especially focus on the ongoing. A lot of people think about the upfront, okay, I've saved that 10 grand, or I've got the a hundred K in super, let's press the go button. And that can be psychologically difficult because you are treading into the markets and into the unknown and you're jumping into that water for the very first time. So I thoroughly encourage people to consider dollar cost averaging. What does that mean? It's a fancy way of saying slowly dipping into the water over time. So a hundred k example, you might take 12 months to deploy that.

David (23m 50s):
You might automatically put, what is it, wherever it is, 8,000 something or other into the markets every single month. And on top of that, if you then have surplus cash flow might be 500 a month, might be a thousand month, whatever that may be, might be your superannuation contributions every quarter or every month paid by your employer, whatever that may be. Deploy it and just do it on an automatic basis. Why does that help? It helps because you are spreading your timing into the market. You're not necessarily jumping in on a low, so you might miss out on that, but you're also not necessarily jumping in on a high.

David (24m 32s):
If we think about it mathematically, it's a bit hard to describe verbally on a podcast. But if we think about it listeners mathematically, if you do get that dip in the markets as you're investing over time, you're simply buying more. The markets are on sale, great. So you're buying more of what you normally would, you're buying more units in a fund or more shares or whatever the case may be. So you're just buying more, which is great because when markets then do recover, which they always do, history always shows. Sometimes it takes a little longer than you've simply got more units at the end of that recovery. So that's dollar cost averaging. The second thing I'd probably, again going back to our E, our favorite ETFs, my view is if I know something I, I know talking about Forex before, I kind of know that I'm pretty comfortable with it.

David (25m 23s):
That's how I'll express it. I know technology pretty well, so I'll express through individual stocks. So they're my wheelhouses for example, I started to look at cyber in particular the last couple of years. And cyber defense. Cyber, oh, cyber Security. Security I should say. Yeah, apologies. And this is very much a house view of ours that's been consistent at Saxo for the last 18 months. And I would suggest it's consistent for the years to come. And it makes sense. We have, again, a war in Europe, we have nations attacking each other on a cyber basis. It's happening here in Australia with some big health funds and so on.

David (26m 4s):
So that I, I look for industries that are mandated. Okay? And it is now mandated for every single business to have a level of cybersecurity. So from an investment theme, let's ride that wave. Now you ask the question as to how to express that. I don't know the market that well, it's kind of new for me. I don't know the names, I don't know the companies. So I simply look at a basket of ETFs that express that view

Phil (26m 30s):
Dollar cost averaging. Yep. And you're saying that people are buying at at any particular time and the market's up, market's down. So sometimes you're on sales, sometimes things are expensive. Yep. But this gets away from the idea which many people have about markets is that you have to time them.

David (26m 48s):
Yeah. Ti timing the market versus time in. Look, if I'm an FX trader who is living minute by minute, sometimes at the very most hour by hour, or I'm a commodities trailer trader who's looking at nothing but oil. One of my, or one of our largest clients at, in, in the Australian office here at Saxo, 24 7, 365, he looks at copper. That's, it doesn't look at anything else. He is timing the market. They are timing the market. And that is absolutely what a trade up must do. And for your listeners, maybe that's what you start to do with some parts of your portfolio.

David (27m 30s):
And I, the question I would sort of ask is, what's the return in your time? Okay, so if you're sitting in front of a screen all day, every day looking for a few hundred dollars here or a few hundred dollars there, maybe that's scalping. Scalping. Yeah. Scalping, exactly. You know, and every now and again it's fun to scalp, okay. And to pick up on something. And in a busy life that I have, I might do that every now and again. But really what pays dividends is time in the market. You know, I go back to the earlier comment of the GFC. I go back to the comment of Warren Buffett picking over the bones of Goldman Sachs, for example, or, you know, waiting into those big businesses that were completely and utterly on the nose.

David (28m 10s):
That took some time to investigate, no doubt. But that also took some time to play out in some cases between five to seven years. And his re returns were 3, 4, 5 times what he originally put in. So again, I go back to my little old ladies buying Commonwealth Bank at $25 at, at the depths of the gfc, and fast forward four and five years, those little old ladies picked up $5 every year on their $25, which is a great return in terms of dividends. And 5, 6, 7 years later the stock had quadrupled. So timing the market potentially from opportunities that do pop up great and, and start to average in or dive on in, but allow time for that thematic to roll on and actually express and play out.

David (29m 3s):
That's the trick. And that's I think where a lot of people got get lost.

Phil (29m 6s):
Yeah. Because everyone gets a short term view and then they suddenly see some red on their screen and often panic.

David (29m 12s):
Yeah. And I think, look, I keep a little diary and it's not fancy, it's a spreadsheet and it's a little reminder, you know, I bought into cyber, by the way, in my self-managed super phone middle of last year. And at the end of the last year it was pretty red. You know, why was it red? Because interest rates still were a little heady, inflation was still looking a bit toppy and tech stocks were on the nose. But as that was red, I quickly had a, a look at the little reasons why I bought that in the, OR invested in the first place. And it's everything we just spoke about, governments have mandated it, it's owing only going in one direction.

David (29m 52s):
These are subscription businesses. Okay? So they're locked in nice.

Phil (29m 57s):
Those beautiful software as a service kind of Business.

David (29m 59s):
Exactly. There's SaaS businesses or they're government mandated, or they're government contracted. You know, I think about something like a Lockheed Martin, something like 99.9% of it, its revenue is, is is, you know, provided by the US Department of Defense. So if it's on the nose, that's fine. I just simply have that little spreadsheet reminder, my, my trading diary, my investment diary, and I, I, I soldier on. Yeah.

Phil (30m 26s):
Well I think that's a really important for listeners to understand is having a diary and actually being able to refer to the reasons why you built, bought a particular company ETF or whatever, whatever investment it is, just to remind yourself, isn't it?

David (30m 40s):
Yeah, absolutely. You know, and I think you can also learn, you know, I go back to diaries past where sort of things haven't played out, okay, what did I learn there? Did I allocate too much to that? Did I not hedge, you know, what was the learnings in terms of why I did that? Again, you know, plugging the saxo sort of education, there is an absolute ton on the website. A couple of things I'd get listeners to look at. Firstly, the 2% rule, what does that mean? It means a mathematical way of how you might allocate between an individual holding or an individual share. So start to think about, am I really, the old adage you're putting all your eggs in one basket probably doesn't make sense for 40% or 30%, or even 20 or 10% of your holdings to be in one position.

David (31m 30s):
So you wanna start to think about how you split that out. Other things, as we've already spoken about, about dollar cost averaging, you know, the other thing that you can consider, even as a long investor, that is a long-term investor, where do I take my profits? You know, how do I set that rule for myself, but equally, at what stage does the red become too red and too dark that I simply exit that as well? And that's the real trick I think as well is, is takes a lot of guts to buy and invest takes even more guts to take profit, but by gosh, you've gotta have nerves of steel to take a loss. And I think taking a loss, you can limit those losses and take them prudently and certainly do them largely and unemotionally.

David (32m 14s):
Not your fault, just hasn't played out. Take the loss, move on, redeploy the capital to somewhere that is gonna work out over time.

Phil (32m 23s):
Okay. David, tell us a bit more about Saxo markets and what Saxo markets have to offer listeners.

David (32m 27s):
Yeah, absolutely. I love working here. A and the reason I love working here is I get to do this, you know, we get to talk to investors on a broad base around how to express their investment themes or trading ideas. Saxo is 30 years old. We started predominantly as an fx, so that big foreign exchange sort of provider out of northern Europe. And today we have 12 offices around the globe. Ran about 60,000 plus products on the platform. So more than you can poke a stick at. And for the investor here in Australia or your listeners, there's, there's a couple of different ways that you can sort of use the platform or use us.

David (33m 10s):
The first one might point you towards is Saxo investor. And that's nice and clean and easy. And that's probably where an investor would go largely long only, they might buy some individual shares, they might buy some ETFs or some bonds. A step up from that is Saxo Trader Go, and that's more of a trading platform. So again, you can go long only and build a portfolio, but that's where Phil, you can start to add in some of those things that we spoke about. So you might have a view on commodities, you might have a view on currency or some other markets. The other great thing about that platform and our, all of our platforms is their multicurrency. So what does that mean? It means that you might start out with Aussie dollars, but you can start to hive off into US dollars or the Euro or yen or whatever the, whatever the flavor of the day may be.

David (34m 0s):
So, so that's a great one to look at. The other great part about Saxo Trader Go is it's also mobile. So how I'll tend to use it is I might do some of my analysis on a screen, but then late at night I might get out the iPad or the iPhone and, and, and sort of trade that way, or at least keep tabs on what the portfolio's doing. The last iteration is Trader Pro. It's actually the sexiest one. So lots of screens and I think, you know, for your listeners, you can check it out, you can download it. That's not mobile by the way. You can download it. It's actually really good. I tend to use it for my deeper analysis. So I don't use it every day, but I certainly get Trader Pro out when I want to do some deep investigation on a particular holding or a particular stock.

Phil (34m 46s):
Can I just pick you up on a point there, when you say an investor might have a, a view on a particular sector or a a, a stock, for example, how do people, what's the best way for them to try and avoid being taken in by a story as opposed to having a legitimate view that's got some solid background in detailed information?

David (35m 10s):
Gee, that's a good question. I I, I love that question

Phil (35m 12s):
Because it's easy to say, I've got a view about something, you know, yeah, I think iron ore is gonna go up, I think copper's gonna go whatever, you know, but how do you, how do you add meat to those ideas?

David (35m 23s):
Look, it's a, it's a great question, and I think the paradox is we have information overload, of course. And so the question is, you know, where do I source my information from? I'm probably at a point where I've just cut, cut, cut, cut, cut. You know, I tend to live on a minimalist sort of diet of information, and it comes from probably three, maybe four different sources for me. And so, you know, and it, it's kind of not relevant to the conversation as to what those sources are. I think what is more relevant is I know them. I, I trust them. They've a track record of providing salient, prescient, sort of factual information.

David (36m 10s):
So that's sort of my core. But I will then look for speakers or presenters or the David Harvie's or whatever the world that do provide an opinion. And I will segregate my information between fact and opinion. And that's a nice little tension for me because I can have a look at the facts and I can sort of apply my rationale to what that means and form that view in inverted commas. But then I will look to some trusted sources for opinions. And again, at Saxo we've got 30 strategists globally. Please start there. You know, we have our own podcast as well, Phil, probably not, not as, not as, not as good as yours, but you know, probably three, four times a week when I'm in the car, I'll flick that on and I'll listen to some opinions of really, really, really highly intelligent SMEs or subject matter experts.

David (37m 7s):
I'll listen to John Hardy, who does nothing but fx. That's where I get my FX opinion from. Or I might listen to Ole who, who talks to us about commodities. I might listen to good old Ross Gittens who's still going around in terms of macroeconomics. So I'll pick an expert in a particular field that's of interest to ratify the view that I have,

Phil (37m 29s):
And also presumably to help the learning process as well. Yeah, because not everyone's gonna have the same amount of experience that you have and this is the way that you learn. Exactly. And how you can form an opinions. Exactly, Exactly. So no one on Twitter with rocket emojis then?

David (37m 47s):
You know, funnily enough, I, I kind of don't, I don't Twitter too much. I do a fair bit on LinkedIn and, and less on the other platforms as well. But no, no, no, nothing in that realm as such, as such.

Phil (38m 3s):
David Harvie, thank you so much for joining me today. It's been a real pleasure speaking with you

David (38m 8s):
And Phil. Thank you mate. And, and, and for the listeners out there and to you, this kind of conversation session, I love having because it's a great little pause in our busy lives to actually think about how should we do things and how can we better own lives and, and take control of our own financial future. So I really, really, really appreciate it. Thank you.

Chloe (38m 27s):
Thanks for listening to Shares for Beginners. You can find more sharesforbeginners.com. If you enjoy listening, please take a moment to rate or review in your podcast player or tell a friend who might want to learn more about investing for their future.

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