90 Years of investing experience in one 50 minute video. A lesson for beginners and experts alike.

About this video

• Video Title: 90 Years of investing experience in one 50 minute video. A lesson for beginners and experts alike.
• Channel: Clive Thompson
• Speakers: Clive, Brigett
• Duration: 46:25

Overview

This video features an interview with Brigett, an investment advisor with over 40 years of experience. She shares insights on why investing is crucial, the difference between saving and investing, and various investment types like bonds, equities, and ETFs. The discussion also covers strategies for setting investment goals, managing risk through diversification, the timing of buying and selling, and alternative investments such as real estate, gold, and collectibles. The importance of research, avoiding emotional decisions, and seeking expert advice is emphasized throughout.

Key takeaways

• Importance of Investing: Investing is essential for financial independence and to mitigate fear of the future by building a cushion of savings and investments.
• Saving vs. Investing: Saving involves putting money in a bank account with minimal interest, while investing means actively using money in assets like equities or bonds to make it work for you.
• Risks of Holding Cash: Inflation erodes the purchasing power of money held in cash over time, meaning its value decreases even if the nominal amount remains the same.
• Investment Types: The video introduces various asset classes:
  • Bonds: Loans to companies or governments with fixed interest payments.
  • Equities (Shares): Ownership in a publicly listed company, offering potential dividends and capital appreciation, but also risk of price decrease.
  • ETFs (Exchange Traded Funds): Baskets of shares that offer diversification by tracking an index like the S&P 500.
• Investment Goals and Time Horizon: Investment strategies should align with individual time horizons (short, medium, long-term) and financial goals, with longer horizons allowing for tolerance of market volatility.
• Diversification: Spreading investments across different asset classes and within asset classes (e.g., various companies in an ETF) is crucial to mitigate risk. The "don't put all your eggs in one basket" principle is highlighted.
• Market Timing and Strategy: It's generally advised to invest today rather than trying to time the market perfectly. A "33% rule" is suggested for purchasing stocks, involving phased investments to average out the purchase price.
• Selling Strategy: The decision to sell should be based on whether one would still buy the investment today. If the fundamental reasons for investing no longer hold, it's time to consider selling.
• Alternative Investments: Real Estate Investment Trusts (REITs), gold (physical, certificates, mining shares, ETFs), and even collectibles can be considered for diversification, provided they are rare or offer enjoyment.
• Paper Trading: Practicing investing with simulated money through paper trading accounts is recommended for beginners to learn without financial risk.
• Avoiding Hype and Scams: It's crucial to be wary of get-rich-quick schemes, especially those promoted on social media, and to focus on sound, diversified investments in quality companies.
• Seeking Professional Advice: Consulting with trusted friends or financial professionals is advised, especially for those new to investing, to navigate the complexities and avoid costly mistakes.