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How to manage PERSONAL finances when the MARKET goes south

know that when everything goes to custard there’s plenty of people that are making money but on one hand we’ve got people that have wiped out 30 of their super and on the other hand people are making money out of this how are the people making money out of it well they’re probably working with pj patterson now pj is a multi-award-winning financial advisor he saw this crash coming he moved his clients money to safety and put them in a position where they could profit in his coming presentation he’s going to go through the three factors that he uses to read an economy he’s going to talk about why your risk profile is probably costing you money he’s going to talk about full cycle investing and why you should really pay attention to that and he’s going to go through his current investment playbook he’s going to give some predictions around how long this recession is going to last is it going to be a v-shaped recovery and a whole bunch more but before i hand you over to pj let me give you a little bit of context as what this is all about so you’re about to sit in on a session from one of our crisis reinvention team but let me give you some quick context when covert started to seriously impact businesses we mobilized experts from within the dent community to be able to help business leaders like yourself navigate the difficult decisions across a variety of topics including how to access finance and grants to cash management to human resource law to marketing and sales strategies to cool tools and tech that you can use from home through to high stakes leadership health wellness stress management not just for yourself but for your team and look a whole lot more for the full schedule with more being added every week visit dent dot global forward slash reinvent and we hope you find it a useful resource all right let’s do this hi glenn and thank you very much for that introduction my name is pj patterson i’m the chairman and founder of keystone financial we’re a financial planning firm here in sydney australia and we specialize in helping our clients risk manage their assets this is a super important time and i do think that this presentation may very well be one of the most important presentations you look at all year and i know that’s a bold statement but given the circumstances that we’re in right now you need to have the unfettered no bs tell me what’s going on information that will help you potentially save thousands and thousands of dollars before i get started though i unfortunately do need to show you a general advice warning the suggestions and commentary in this presentation will give you a general idea of the options available to you you will need to work out what is appropriate for you that being said my job today is to give you a number of insights and some tools and to answer some questions about what the heck is going on and as oprah winfrey famously said surround yourself with people who are going to lift you higher now forgive me if i look around a little bit i do have some things around me that are going to help jog my memory as to exactly where i am in this presentation so bear with me if i’m not completely focused on you during the presentation let’s get started i’m going to say some scary things to you today but i don’t want you to be scared information is knowledge and knowledge is power and it will set you free what i’m going to share with you today are insights and knowledge about where we are the markets and what’s happened to date and give you some frameworks for how we might be able to look at markets and gain those insights and knowledge if you could please stick around to the end i think you’ll find i have put together or i will share with you rather that i put together some great resources specifically for the dent and kpi community and i want to be sure that you don’t miss out on the opportunity to to get those now more than ever is an important time in your lives to protect your family’s wealth protect the capital that you currently have and if you happen to be a really young person a millennial millennial or a gen y or gen zed or whatever the gen is now you will probably get some deep insights into where we are and how you can um prepare yourself for the next time this happens and it’s going to happen again i mean these things come along every five to seven years or so and um honestly at this point the covet 19 thing is one of those black swan events but nevertheless these sorts of market corrections happen all the time i also suggest that you take some notes today so grab a piece of paper or open a page in your browser and get ready to type some things down i’m sure there’ll be some things that will that you want to follow up on or that you want to ask some questions about because frankly i don’t do things in a in a very orthodox way now don’t let that scare you i think you’re going to find that the insights i give you today are not mainstream financial media or the mainstream at all but they do absolutely work and the tools and the methods that i use absolutely work and i’ll share more about that shortly also feel free to hit me up in the comments section uh leave comments post questions on this video i i’m sure that it’ll be available to do that and i would love to hear your commentary and answer any questions you might have so let’s sit back take a deep breath and get ready to learn so here’s what i’m going to cover today i’m going to give you a quick snapshot of where we are in the economy and what’s going on both globally and locally i’m going to take a look at market volatility and why that matters to you i’m going to show you how to read an economy using the three factor model that we use here at keystone financial i’m going to talk about your risk profile and what that actually means to you and why i don’t use them or don’t think they’re really that relevant i’m going to discuss with you why you should consider becoming a full cycle investor what that actually means and how to actually look at implementing a full cycle investment strategy and finally i’m going to talk about the playbook we have on right now for our clients and how that might help you in protecting your capital and your wealth right now the global economy and global financial markets are in crash mode i know that’s a bold thing to say but anything beyond about a 20 correction in markets is considered a crash and here’s a couple of statistics bear with me while i read these off the screen here’s a couple of stats of markets as that when i’m recording this which is the friday the 4th of april so the dow jones industrial average was down 26 percent this is year to date by the way the s p 500 is down 23 the nikkei is down 24 and a half percent the australian all ordinaries was down 24 the ftse is down 28 and the dax which is the german index is down 28 now i could go on and on about other stock market indices around the world but you would get they would all be very similar you would all get the same feel that we are absolutely in a an economic crash the other issue is that all of the metrics that are tracked right now globally with all of the data points and econometric data points that come out particularly out of the g20 countries are horrendous and they’re deteriorating and this is a very key thing to understand about knowing where we are in the world today and how you should be potentially viewing the world as well as how you should be investing and right now it’s not a very safe environment to invest because all of the econometrics are continuing to decelerate and that is a very very bad sign for this probably the short and medium term before we are really it’s safe to go back in the water as it were we need to see gdp figures and things of that nature going up in fact one of the things i might actually suggest is that we do have an ongoing market crash now i know we may see the markets have a little bit of a pop this week i don’t know it depends on when you’re viewing this but we’re definitely in a bear market and typically what happens in bear markets is you see a violent crash to the downside so it really just falls off of a cliff and you’ll see these really powerful rallies inside of a bear market this is typical this has gone on for years or not gone on for years but it is it’s a very repeatable and known thing about bear markets and the the thing you need to again rely upon is what is the economic data telling you and i’m going to get into that in just a moment but before i do that i just want to say that i am particularly proud of the fact that my firm saw an economic slowdown coming now we didn’t see a coveted 19. i’m going to be absolutely upfront about that no one would have seen covet 19 coming and what the impact it would have had on the global economy that’s kind of referred to as a black swan you might have heard that term banting around the media in the last 10 or 15 years particularly after the gfc everybody you know talked about these black swan events well covet 19 would certainly be classified as one of those but i was already positioned with my clients money in uh for rather a declining economic environment we were sort of headed this way anyway now would it have been this bad i don’t know probably not but certainly because the world economy has for all intents and purposes been shut down because we’re trying to keep people to stay at home and restricting movement and airlines have you know really restricted the number of flights they have now and it’s really only essential services and essential movement this is going to have a huge impact it already is but it’s going to have a huge impact on the global economy and i dare say when we get that we start to get the gdp numbers floating uh coming through rather from all of the again g20 economies we’re going to see some really really horrendous and bad gdp numbers and that is not a good thing for you or me as a result of the markets crashing and all of this up and down movement what we’re actually seeing is the volatility of markets has increased and this is a really important metric and something that you you should be aware of and if you’re not aware of it what you’re about to be because it’s one of the most powerful tools you can use to determine when it’s safe to invest and i i look at well actually volatility rather is the measurement of price movement over time so the more price moves and the bigger the moves the more volatile you’ll see or the more volatility rather you see in the market and one of the measures that we use for volatility in my business is the uh the vix which is the s p 500 volatility and there’s basically three regimes of volatility you could probably already guess what i’m about to say but the first regime is sort of the safe regime it’s where it’s a green light and i sort of hearken all this to a traffic light system and that’s what volatility gives you so pardon me bear with me for one sec while i explain this and then i’ll tie back together again but volatility has again has three regimes the first regime is green everything’s fine markets going great that’s where you get your captain stock picker everybody you know everybody’s a winner uh in stocks and it’s just one of those things where it seems like you can do no wrong you can almost throw a dart at the market and uh and have a winner the second measure of volatility is a yellow light it’s where volatility moves into a certain range that is caution and often what you see there is a lot of chop you’ll see markets shooting up and down and up and down and up and down there’s just a lot of movement in the markets and that’s a traders that’s a great traders market if you want to do that sort of thing but most of us don’t have the capacity time or even skill set to trade the market over very short terms but anyway that’s

uh that’s a yellow light in terms of volatility now the red light is when volatility gets so extreme that the in the volatility indexes and the one i mentioned earlier was the vix if you popped in into yahoo finance or something like that right now and put the ticker symbol vix in you would get the vix volatility index and so when volatility reaches extreme points it becomes a red light a stop a basically don’t go into the water don’t go into this market and so the ranges for that are as follows the green range the general range where everything is fine and you can invest and not really worry about what’s going on in the in the market is sort of a volatility measure of 9 to 15. and if you’ve bothered pulling up that chart and maybe just pause this right now and pull up the chart of the vix it might be a little exercise fun exercise for you to do and go back about six months you’ll see that the vix range was right around in that 9 to 15 level and it was there for a long time and coincidentally we had quite a bull market going on for quite a long time since about 2000 late 2017 early 2018 we started a bull market anyway that’s the green volatility bucket 9 to 15. the yellow volatility bucket is sort of 18 to 25 to 28 somewhere in that range that’s where again you’re cautious and you’re seeing a lot of chop in the market and it’s not necessarily a sign that you need to sell your assets but it’s certainly a time where you might be saying well i don’t know if i want to allocate new capital here or you want to look for asset classes where they have lower volatility finally the red bucket which is the no go bucket this is the bucket of volatility where effectively the stock market becomes uninvestable or an asset class becomes uninvestable and it does depend on asset class i’m speaking more broadly here about stocks but that is a volatility level above 31. once you get above 31 then the market really becomes a and this is a technical financial term it becomes a show and you really should be sitting on your hands in fact you should probably be considering taking money off the table because what happens with volatility is that assets and cash flow to markets or asset classes that have low or falling volatility so the the opposite is also true as volatility rises and price movements get more extreme cash moves away from that sort of asset class so why is volatility real important well it’s one of the key components of risk that we look at so as volatility rises risk is rising and that is the lesson for you on volatility so right now where are we in the markets well i’ve just given you a real awesome primer on what volatility is all about so if you have gone on to yahoo you know that the volatility measure on the s p 500 on well friday april 4th uh closed i believe at 46. now it’s been as high and hold on for this one right it’s been as high as 82 i believe 82 or 83 intraday that is ridiculous face melting volatility as an investor you just cannot be in a market with that kind of volatility even at 46 it’s still above the level that i gave you for red which is 31 so it just means you know what you can’t invest in asset classes with that kind of volatility now every asset class has its own volatility metrics so whilst i’ve given you those three buckets that generally applies to stocks and broad market indexes but it won’t be the same for something like oil or something like treasuries or sovereign debt or currencies even for that matter they all have their own volatility measures and they all have that sort of green yellow and red light metric now the other thing that not the other thing but the next thing i should say that we look at um in terms of looking at markets and how we uh the lens that we look at through them is a three factor economic model and the thing i like about this model is it’s very simple and it’s global macro and that’s the level that we start at we look at first of all what’s going on globally what is the global macro environment telling us and the three factors that we look at are growth or gdp inflation and interest rates and i’m going to go into each of those in just a little bit more detail now so growth or gdp as you can imagine if a country’s growing its gdp is growing and prosperity is happening money’s flowing that country’s manufacturing stuff the services industry is going well jobs are being created and broadly speaking the overall wealth of a nation is rising and that’s a great environment to be in you want to see gdp rising now as i mentioned a little bit ago there’s every chance that the u.s and many other countries that you’re probably watching this video from so australia singapore hong kong pot well actually the chinese probably wouldn’t let this in on their internet but maybe taiwan korea canada and uh new zealand these countries gdps are all going to fall now if you don’t believe me just give it some time they’re all falling and they will all have varying degrees of negative gdp over the next couple of quarters now does that mean that we are in a recession most likely it further could mean and we won’t know this actually until we get months and months beyond this so the the thing about knowing whether you’ve had a recession or even a depression you almost don’t really know that until possibly quarters ahead or or months ahead so the data will tell us and give us a pretty likely or probable scenario there but certainly my call and my view is we’re in a recession right now in australia the us is in recession europe’s in recession most places in the world are in recession and it’s not going to get any better anytime quick so that’s the first factor gdp the second factor is inflation now we all pretty much know what inflation is it is a measure of prices and we see that often when we go to the pump to the petrol station to fill up if gas prices or petrol prices are higher that’s a sign of inflation if they’re lower that’s a sign of deflation similarly if you go to the shops and you do your weekly grocery shop you might see that the cost of the things that you are buying or the basket of goods that you have is getting more expensive over time and pardon me that’s that is a measure of inflation so what we actually want to see is we actually like to see moderate levels of inflation a lot of the central banks and i won’t go into all of this really in detail a lot of the central banks like to try to generate inflation because it helps with other parts of the economy but the reality is that for you and i as consumers deflation is actually our friend right if you think about it what are the things that have been deflating in price over the last say 25 30 years it’s been things like tvs and computers and all of the things that we kind of don’t need but we want right all those gadgets and things they seem to be going down in price but all the stuff that we actually need on a day-to-day basis like the cost of housing and food and petrol and insurance and health insurance all of those things go up so inflation isn’t necessarily a great thing but it is one of those metrics that we look at now finally the other metric that we look at is interest rates now as you would almost undoubtedly know if you’ve been watching any of the mainstream media stuff and financial media you know that interest rates drive a large part of our economy so as interest rates fall that’s that’s good that usually means that um debt is getting cheaper and they’re trying to maybe promote a little bit of economic growth and and commensurately if interest rates go up a little bit that’s also a healthy sign that the economies are probably you know growing and they want to make sure that we don’t get into a a hyper inflationary or a high inflation environment so they increase interest rates it’s one of the policy tools that central bankers use to control the supply of money in an economy but it’s certainly one of the key metrics that you and i as individual consumers and homeowners and all the rest of it use to to govern how much money we have to spend how much how much we allocate towards our discretionary spending that sort of thing based on how much we have to spend on things like debt and revolving debt so anyway that’s the three factor model that we use now generally speaking we want to see um there are two levels and this then goes into how our quadrant model works and there’s basically four quadrants so let me just recap for a second growth inflation and interest rates three factor model global macro the direction of those three things put us into four different quadrants the first two quadrants are good so growth is rising inflation moderate to maybe rising a little bit or falling a little bit and interest rates again probably not extreme going to one extreme the other just a normal policy setting uh normal cost of money type thing that’s quadrant one and two and that pretty much means we are in a growth phase we’re seeing that gdp is is growing and we’re seeing that the world economy and um large nations like the us and china and korea and all of these guys if they’re in quads one or two it means global trade is moving and things are going well it’s kind of a happy time it’s a goldilocks time if you’ve ever heard that term before now on the flip side to that quads 3 and 4 are bad and so quad 3 and quad 4 basically mean that or we’re basically seeing that growth or gdp is falling inflation might be we might be in a deflation so inflation is probably falling it’s falling fast and interest rates are usually being cut as well and that is because we have a problem with growth and a problem with economic growth and we need to be able to uh or they’re trying to i should say they’re trying to actually stimulate growth by cutting interest rates so where are we right now in terms of the economic situation in australia well we’re in quad four which is very much a recessionary quad and in fact we are so deep into quad 4 as i said earlier this could very well be a depression and as an investor this pretty much means that we’ve got to batten down the hatches and as far as not being an investor or just being a normal human being it also means we need to batten down the hatches because there could be some very unsavory things headed our way in terms of additional job losses further slowing of the economy further restriction of movement we’re really in uncharted waters here in terms of how the covid 19 situation is playing out across the globe and what it truly is going to mean long long-term for the global economy i personally think that we’re going to see some positive things in terms of new ways to manage the global workforce in terms of things like working from home and more flexible working arrangements and maybe not needing you know office space this sort of thing that’s going to take a while to play out and in between that happening and today there could very well be a lot of pain and suffering amongst most of the population who maybe don’t have secure jobs and things like that so anyway i’m sort of coming at this from an investor point of view and how to protect your capital your superannuation money and so forth so let’s get into a discussion around risk i love this slide from warren buffett where he says risk comes from not knowing what you’re doing and it’s uh it’s a pretty common thing where as i described earlier in the volatility regimes when volatility is low i see it all the time i get you know the captain’s stock picker everyone has some punt or tip on the stock market because everything’s kind of going up and everybody’s a winner and people think well i don’t really need to understand risk management i’ll just pile all my money into this one opportunity or two opportunities and and make a gazillion dollars well look i am over exaggerating on some of that stuff but you’d be surprised at the number of people i’ve come across throughout my career where that’s how they invest and it’s a very very scary thing um i think most investors make the wrong decisions first of all because they don’t have the tool set as what i’m giving you today some of the tools that you can use to really get an idea for where you are in the investment cycle the economic cycle and maybe what you should be investing in i’m going to talk a little bit more about that later but as we all know a lot of investors buy high and sell low right it should be the other way around buy low and sell high and they just make bad investment decisions they don’t size their positions accordingly they invest in the wrong industries at the wrong time in the cycle it’s just a veritable you know show of mistakes that people make and i think part of what drives that is this risk profile thing that goes on in i’m well it goes on in australia in the financial planning industry and i suspect pretty much any country us in any country in europe korea etc will have these risk profile questionnaires that people are asked to fill out so when you’re working with an advisor one of the things you’re going to ask you to do is fill out a risk profile questionnaire if you have a superannuation account in australia likely you’ll at least just take a box to say i’m a you know balanced investor or something like that but they might actually have you fill out a risk profile questionnaire and i i think about these risk profile questionnaires in a different way and i’m going to give you an analogy it’s like asking you how many pairs of shoes do you have in your wardrobe and the reason i use this analogy is because a risk profile is like having one pair of shoes in your wardrobe and what i mean by that is if you are put into let’s say a balanced profile it means that that that advisor or that fund or whoever it is it’s managing your money is going to manage your money exactly as a balanced investor through the entire cycle so if you think about where we’re at right now we’re coming into winter right in the market cycle it’s going to be bad it’s going to be a really cold winter and if all you have is a pair of flip-flops or a pair of high heels or a pair of tennis shoes or a pair of sandals right that’s the only pair of shoes you’ve got you’re not going to do too well in winter right if it’s snowy and icy and it’s really bad conditions that’s the wrong footwear to have for the market environment and unfortunately as i say the way that the mainstream market financial media and financial establishment treats you is by saying you’re this type of investor we’re going to manage your money exactly the same way through the entire cycle now i think that is completely stupid and i’m going to tell you why i think that if you consider that we have a business cycle everyone knows that we have a business cycle we go through a business cycle there are certain points in that business cycle where you should be able to say take a much more defensive posture where you might actually get out of growth stocks and value stocks and the things that do really well in quads one and two as i described earlier and move more defensively into bonds and fixed income and treasuries and cash and all that sort of thing by the same token when that environment when the winter resolves itself and we see spring and summer coming you want to be able to do the same thing you want to get out of those defensive assets and pile into maybe overweight some of the growth assets and things like that but here’s what the financial establishment does is they go no no no you’re a long-term investor we’re not going to worry about trying to time the market and we’ll just invest you this way throughout the cycle because you’ve got 30 or 40 years or 50 years or whatever your investment horizon may be now again i think that’s ludicrous because i also believe that it is absolutely possible to time the market now i’m not talking about timing the absolute day the market tops or bottoms but if you understand or anything i said earlier about gdp and the three factor model in interest rates and inflation if any of that resonates with you then you would be able to then filter that down into a playbook to say when these things are happening depending upon the quad we’re in there’s a playbook for me to invest there’s a certain type of investment playbook that i need to put on and in doing so it improves the probability that you’re going to a have a positive return and b not lose a shitload of money when we get something like a correction or crash so the problem with a risk profile is it really shouldn’t be called that it should be called an investment profile because that’s what it does is it lumps you into a style of investment a risk profile is much different and managing risk is much different and again it is one of those things where you need additional tools to understand where you are in the market cycle and what’s going on with things like volatility and particularly in certain asset classes to really understand how you should be investing and the types of investments you should be making because at the end of the day everybody wants to see their capital grow like who wants to lose money nobody wants to lose money and that’s why i think these risk profiles are stupid because they ask you you know questions like if your investment went down 20 what would you do well most people that i know would panic they would be like oh my god i’ve lost 20 of my money uh or you’ve lost it mr mrs advisor and so that’s not a good thing so look let’s just cut the bs right nobody wants to lose money and everybody wants to make money that’s we’re human beings that is how we’re wired but we don’t have a system that enables that it doesn’t enable you to be flexible and move with the business cycle and that’s what i want to go into now is this understanding of what is full cycle investing i love this quote from j paul getty which is no one can possibly achieve any real lasting success in business or get rich in business rather by being a conformist and i completely that quote completely resonates with me because i have always viewed my self and my firm as an outlier as a non-conformist because let’s face it right now once again we have a whole class of investor and they’re typically the super annual super annuals who are getting completely cleaned up right now by these market movements because the establishment because the advice community doesn’t have the tool set or the tool i should say of full cycle investing so let’s just talk about that for one second what is what is actually being a full cycle investor well being a full cycle investor is actually recognizing using the tools i’ve already mentioned the three factor model volatility and other things to determine where we’re at in the investment cycle and furthermore it’s also about ascertaining what quadrant you’re in so that you can put on a certain investment playbook now all we’re trying to do all we’re trying to do and i’m not and i don’t want you to get the impression that i’m some super duper genius level investor all i’m doing is i’m making observations about the market as i’m trying to get that incremental increase in performance in generating alpha for my clients that will actually make the difference in the long term and let me tell you this as i mentioned earlier in this presentation because we saw an economic slowdown coming we were able to position our clients in basically in cash but also in other things that perform well in that environment now again covet 19 came along and has completely bagged the u.s economy the chinese economy economies in europe the australian economy they’re all going to suffer badly that is like that’s a an extreme outlier event like if for any of you math nerds in here that might be uh might be familiar with standard deviations like this would be like four five six standard deviations away from what you would expect to be a normal sort of event and that’s pretty extreme that that sort of stuff just doesn’t happen but being a full-cycle investor means that you have a tool set to say okay what’s happening with growth inflation and interest rates isn’t the economic environment accelerating or decelerating what’s the rate of change of the acceleration or deceleration how bad is a recession going to be is it going to be shallow or is it going to be deep like a depression all of these questions get asked and an answer is postulated in a full cycle investment strategy and again what this means is you are repositioning your assets to be more likely to experience a positive return during that environment because what happens is that over the long term it’s not being a long-term investor that this whole game is all about in fact the best long-term investors are awesome awesome short-term investors think about a guy like warren buffett everybody thinks he’s a prolific long-term investor and i agree with that he has had one of the best performances of any person managing money on the planet there’s a heck of a lot of other people like warren buffett around mind you that have also done similar things but what they’ve been really good at is managing the short term really well and i’ll give you a quick example i don’t know how much cash warren buffett asserts is currently sitting on get that out of my mouth how much cash warren buffett is currently sitting on but in the lead into the gfc during 07 to 2010 warren buffett had been heavily invested in cash and treasuries now he of course he kept his regular investment portfolio going because he buys big stakes in companies and they generate a lot of dividend income and such like but he didn’t reinvest a lot of his cash back into those businesses or buying other businesses because he didn’t believe that the market had value in it not that value is a big metric for whether you should put capital to work in the market but he could clearly see that something wasn’t right and along comes the gfc now warren buffett during the gfc put billions and billions of dollars of his cash hoard to work he bought big stakes in companies like ge wells fargo bank of america i’m sure the list goes on but anyway he was a great short-term investor at the moment that the market had the most pain and suffering he was ready with cash and that is ultimately what being a full cycle investor is all about is knowing the spot to pick to invest in [Music] okay so we’ve talked a lot about risk risk profiling economic models volatility being a good short-term investor to be a good long-term investor so what’s the playbook that you should have on right now well as i mentioned throughout this presentation we are probably entering a depressionary style environment if you just think about what’s happened to the global economy it has effectively grown to a halt and that’s really really bad i mean it’s super really bad and so right now you should probably be out of the stock market you should not be fully invested and the reason for that at least in stocks the reason for that is because earnings of companies have yet to be revised down now again this is another metric that we look at for how we look at markets but if earnings are going to be down and they will be a lot of companies are already revising lower they’re saying we can’t even give you guidance because we just don’t know i mean if you think about it right there whole industries that are shut down the airline industry has probably been 80 or 90 percent of its capacity is gone who’s going to restaurants and cafes because they can’t right so the services industry is gone the restaurant and hotelier industry is going to be completely ravished there are other industries that are going to be hit very very hard manufacturing is one of those as well obviously there are some industries that will do pretty well there’s some certainly some portions of the technology sector that will do okay but broadly speaking on on the whole on balance you cannot right now make an argument to be invested in stocks because we just don’t know where the bottom is so that would be the first thing i would suggest in terms of putting on a playbook to say look now’s the time to be sitting in cash if you have lost money already in your superannuation account or maybe in a personal account i dare say if we get a bounce of some sort in the markets you would be wise to consider selling into that because again remember what i said right at the beginning of this presentation about bear markets is you often see these big rallies in bear markets where people go hooray you know we’re back to a bull market environment and and you know we’ve had this v-shape recovery well i’ve got news for you again that doesn’t happen typically in bear markets you don’t see these sort of v-shaped recoveries in fact we’re going to be very lucky if we see a an extended sort of u-shape recovery because again the economy has been so devastated by covid19 so what i’d like to do now is cover off a few faqs i’m going to have to put my glasses on to do this so forgive me for looking down but i just wanted to cover off a few of the things that particularly in australia that australians might want to be aware of and then share with you a few other insights and then give you that resource that i promised that i was going to give you at the beginning of this video so first of all how many of you were aware at this stage you could access your superannuation if you need to if you are experiencing financial hardship well the fact of the matter is you can and the government has rolled out a program where you can access ten thousand dollars in this financial year which ends june 30 of 2020 and then another 10 000 next financial year now the the process to do this is you have to have what’s called a my gov account so the mygov account is something that pretty much well everyone in australia who’s over the age of 18 should probably have one but you certainly you can set one up fairly easily just google my gov and go set yourself up with that account the process is you have to apply through mygov to access your super so you can’t just go and call your fund and say i need ten thousand dollars or whatever uh you can if you have a self-managed super fund you can’t just go and take the money out you basically need to get approval from the ato to do that so the my gov website you’ll go in there there’ll be somewhere in there where you’ll make an application to do that they will review it and they will send a letter or some sort of communication which you will then forward on to your fund or if you are a self-managed super fund then you will just send that to whoever your fund administrator is just so they have it on file so that the the auditors and so forth are able to have the proof that it was okay for you to take that money out so that’s the process to use for that i get i’m getting asked a lot how bad is this economic downturn going to be and i think that right now no one knows again we’re not really going to know until we’re well and truly through all of this and we’re looking back probably three four years after the event but having said that i think it’s going to get a lot worse before it gets better and so i don’t want to be one of these pollyannas who just runs around saying oh look for opportunity and all this stuff yes there will be opportunity don’t get me wrong i mean trust me when i say this at a certain point when i see the data suggesting it i’m going to be piling my clients back into equities and stocks and all the growth stuff but that’s not i dare say that’s not going to be for months and months because we have to work through this cycle and if i could just sort of look back at history the great depression lasted the whole period of time of the great depression in financial markets lasted 44 months a typical recession will last nine months a recessionary environment will last nine months and the average is i think somewhere around 14 months so literally this covid19 thing has just started to affect the global economy in the last one to two months so there’s a lot of time and space between now and when we can call for a recovery okay so how are we going to know that it’s ending well again it goes back to the looking at the economic data we want to be able to see economic data improving and incrementally improving not just you know a one-off sort of number we want to see a lot of economic data getting a lot better and as it does that will then give us confidence at least as investors that it’s time to go back into the market you need to protect your capital right now and even if that means at the moment you have to crystallize a loss or you have to take a loss you know what it’s better to have a 10 15 20 percent loss than to have your capital go down 40 or 50 percent because the reality is and you probably could do the mass on this you would know this right if you have a fifty percent loss you have to have a hundred percent gain just to get back to even now if you have a fifty percent loss in your capital you won’t recover for years and years and again this is why i use a full cycle investing model because it means we get out of stuff even if there’s a small loss we get out of it that’s fine but you want to preserve capital and that’s one of the key messages that i’m hoping you’re getting loud and clear for me is you must preserve your nest egg you must preserve what whatever wealth you have in your family you must preserve that now because that’s your ammunition that’s your firepower for when the market actually turns so one of the final things i often get asked is or a statement i hear being made is stocks look really cheap right now should i be buying stocks and again in bear markets this is exactly what happens is bear markets have bounces and people think oh this is it this is the beginning of the next bull market so they then feel compelled to go and buy stocks but they don’t have that overlay that structure that i talked about that prism of full cycle investing of growth inflation and interest rates to guide them to say well hang on a minute has anything actually changed in the economic narrative that suggested the stock market should be going up i mean you know what stocks go down and they go up and these are the things that happen on a day-to-day basis but what i’m telling you is over that short and medium term particularly in bear markets you get bounces they should be sold and if you get some recovery of your capital during that bounce you should take that opportunity to sell and now it’s definitely not it is april of 2020 now is definitely not the time to be looking at a fully allocated stock portfolio thank you very much for sticking around to the end of this video it’s been great to hopefully give you some information that’s going to make give you the ability i should say to make better financial decisions around this evolving market situation and uh once again please if you do have any questions or comments hit me up in that but now let me just share with you what i am doing for the dent community which i’m so proud and pleased to be a part of there are some incredible people in this community and doing great things as well so this is my opportunity to help you with some more knowledge and learnings around this so i’ve created a webpage on my site it’s only visible it will only be visible to people with this url and that’s www.keystonefinancial.com.a u forward slash k p i and on that site is it’s it’s a bit like um capcom if uh if you’re a bit of a space nerd then you know that uh capcom is the uh is the one person in mission control that talks to the astronauts and the reason for that is because you know if you’ve ever seen any of these movies you know that there’s 40 or 50 different people inside mission control that are tracking their own little you know metric and own little system of of the spacecraft and if they all tried to talk to the astronauts at once it would mass confusion would rain and the message of whatever needed to be put through would not be put through and confusion would ensue and of course they would probably prioritize the wrong thing so i call this webpage capcom for you because what you need is one voice so my firm is on a mission one voice one mission and that’s to protect and risk manage your capital so on that page you’re going to see some first of all some links to all the government programs and things going on so jump on on those links they’ll probably pop you over to the treasury website or you’ll download some of the fact sheets so if you’re a small business person there’s some fact sheets there for what you can do to help your business maybe get some cash flow or how to seek remedy from landlords and such like some of those resources i’m also going to have on there a bit more of a detailed playbook for you as to how you should be investing your capital during this period of time i will give you the current quad map and i’ll probably do that for the four or five key countries that i know the dent community is most prolific in and there’s a bunch of videos there as well that i’ve been shooting so one of the things i do for my clients is i communicate with them regularly especially in this environment i’ve been recording updates uh just from my computer with my little headset on it look like i’m in a i’m a pilot in a cockpit or something like that but i just shoot you know 10 to 15 maybe sometimes 20 minute videos on what the heck is going on just to give my clients more information about the current situation and to put them at ease and give them confidence that i am doing the right thing around their money and that i am bolted in the chair and paying attention to what the hell’s going on in financial markets because that’s what you have to do in a in a environment like this is really keep on top of this stuff so you’ve got access to those videos and i’ll post more into that webpage as well consume them at your will there’s absolutely no obligation to do anything you don’t have to give me any of your details no sign ups required none of that stuff i want you to have this information with the caveat though please if you’re going to act on anything i tell you once again remember that general advice warning i gave you i don’t know you individually i don’t know your personal circumstances so please if you’re going to make any decisions around what you’ve learned and believe me you’re going to be able to make some better decisions please consult with an advisor and again consult with somebody that knows what the hell they’re doing that knows how to risk manage money and by all means if you do if you would like to contact me my email details will be there my mobile number and contact details for australia will be there i run a global firm in terms of global macro investing and access to a global platform to do that and so i would be all too happy to share with you my insights and my wisdom that i’ve gained over the last 25 years or so in financial markets so once again ladies and gentlemen thank you so much big shout out to glenn and the gang at dent i really appreciate the opportunity to share my insights with you guys i do hope that we all survive and i know we will this next six to 12 month period with our capital and our money intact and of course our families health and our individual health intact so ladies and gentlemen thank you once again and i will hopefully uh see you all again at some point soon for more expert talks just visit dent dot global forward slash reinvent because we believe that the decisions that you make now matter more than ever we started den 10 years ago in the middle of the gfc in london and we shared the key person of influence methodology as a tool to be able to help businesses thrive despite the chaos today it’s a best-selling book and over 3 000 businesses use the methodology like an operating system for driving performance and we’ve learned that regardless of economic conditions that your primary focus as a founder should be showing up as the go-to brand the key person of influence in your industry more important than systems or social media more important than facebook videos or launching a website the goal of showing up as the key person of influence in your industry should be the organizing force it should be the primary objective that helps align all your other decision making because as your influence and reach expands it becomes easier and cheaper to attract clients team media even investors when times are tough it’s the key people of influence to become even more valuable and even more in demand if you’ve been in business for a while you’re probably a lot closer than you think so every week that this covert 19 thing continues i’m going to be hosting a weekly talk to help business leaders like yourself recalibrate their focus so they can make the most of the times that we’re in if you’re interested in jumping on a zoom and saying hi with me you can find the link to register for my sessions as well as all of the crisis response team sessions at dent dot global forward slash reinvent if you found this useful let us know my name’s glenn carlson and please be brave have fun let’s go make a dent in the universe.

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