In this Money Matters talk, broadcaster and journalist Iona Bain shares insights about the world economy, recent trends, and important things to look out for with regard to your investments. Drawing from her own investing experiences, Iona warns about common mistakes like panicking when markets go up and down and stresses the need to understand economic trends and how markets truly work.

Iona Bain is an award-winning broadcaster, journalist, speaker and author who specialises in money. She is one of the best known financial journalists of her generation, with a rare combination of accessibility and authority, and is often credited with bringing millennial money issues into the mainstream.

active or passive investment?

Once you start investing, it’s important to keep up with what’s happening in the financial world. Even if you choose passive investing, you still have decisions to make. There are different tracker funds to pick from, so knowing their differences is key.

Active investors spend a lot of time watching screens and gathering information to understand various risks. But most of us can’t do that because we don’t have all the resources they do.

Iona suggests learning from successful investors like Warren Buffett. She says it’s smart to have a plan for your investments and not change it too much. While it’s good to stay informed, it’s also important not to mess with your investments too often once you have a solid plan in place.

Finding Balance in Investment Strategy

Iona warns that it's easy to get caught up in the ups and downs of the stock market, leading to a constant urge to adjust your investment plan.

She acknowledges that life changes, and as it does, your financial goals may change too. It's smart to take a look at your investments every few months or so to make sure they're spread out in different areas, like companies, industries, and regions, and to keep an eye on fees. But Iona cautions against overdoing it. Checking your investments too often, especially if you can do it right from your phone, can lead to unnecessary stress and maybe even some impulsive decisions.

Iona aims to show her audience that resisting the urge to check your investments all the time, even though it's tough, might be the best move in the long run. She believes that finding the right balance between staying informed and giving your investments some space to grow can lead to better outcomes in the end.

the global economy

Looking at how the world economy has been doing, Iona thinks about important times like the 2008 financial crash and how central banks have kept interest rates low since then. This made it easy for people and businesses to borrow money, which made things like houses and stocks more valuable. But it also made the gap between rich people who own assets and everyone else bigger.

The COVID-19 pandemic further reshaped the economic landscape, with all the lockdowns and a subsequent resurgence in economic activity as restrictions eased. This resurgence, coupled with geopolitical tensions and disruptions in energy supplies because of the invasion of Ukraine, contributed to inflationary pressures, giving us new challenges for central banks to navigate.

Throughout these turbulent times, Iona observes how economic policies and shocks have influenced investment opportunities and outcomes, underscoring the need for investors to adapt to evolving economic dynamics.

INFLATION AND INVESTMENTS

Iona explains how central banks respond to rising inflation by increasing interest rates, aiming to curb spending. However, the pace of these changes is crucial to prevent economic downturns. Despite recent rate hikes, public sentiment remains pessimistic about the economy, while stock markets continue to thrive.

Iona highlights the importance of understanding that investing isn't just about current events; it's also about predicting future trends. She encourages people to trust their own opinions and stay informed about market developments.

Growth vs. Value Companies

During the pandemic, tech companies like Facebook, Amazon, Apple, Netflix, and Google—dubbed "peak FAANG"—saw significant investment. This trend reflects a growing reliance on technology, with Tesla also playing a part in this tech-dominated landscape.

While FAANG companies experienced considerable success during the pandemic, Iona highlights a shift in market sentiment towards the end of 2021. As inflation fears mounted, investors re-evaluated their strategies, prompting a closer look at value companies—often considered bargains in the stock market.

Drawing a parallel to personal experiences, Iona likens value investing to finding a good deal, albeit with some risks involved. Just as she found a budget-friendly alternative to a pricey item online, value companies may seem attractive due to their lower prices, but their potential for growth remains uncertain.

Amidst economic uncertainties, Iona stresses the importance of understanding market dynamics and maintaining a balanced approach to investing. While savings may seem appealing during times of economic uncertainty, she advocates for a dual approach—saving for short-term goals while investing for long-term dreams.

In conclusion, Iona advises investors to stay informed but not be swayed by market noise, urging a balanced portfolio approach. She recommends periodic portfolio reviews and invites people to continue learning for further investment insights.

Catch up on Money Matters 2024:

• Trailer and landing page

• Panel #1: How do we make the economy better for women?

• How to Work Towards What You Value with Stefanie Sword-Williams

• Panel #2: Your Unique Wealth Building Journey

• Financial Joy: A Journey to Financial Independence with The Humble Penny

• Current State of the Economy and Market Update with Iona Bain

• Panel #3: Cultivating Wealth | Coming soon

• Cherise Live Music | Coming soon

• Keynote interview with Candice Brathwaite and Emilie Bellet | Coming soon

Thank you to our partners:

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