7 December 2019
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Don't invest without reading this!

Peter Switzer
24 September 2019

As I was listening to my guests on my Switzer TV programme, which we recorded late yesterday, I was thinking how valuable the insights were from these professional 24/7 market players. Despite my academic background (first as a student and then as an economics lecturer at the University of New South Wales for over a decade), I know I learnt more from insightful experts who were plying their ‘trade’ at the coalface.

So when I was gifted columns in newspapers such as The Daily Telegraph, The Sun-Herald and then The Australian over a 30-year period, because of my economics background, it opened up doors to high-achievers in the areas of investing in stocks, business-building, wealth accumulation and even comprehending the important political plays that affect so many people’s bottom lines.

I reflected upon these “opportunity knocks” insights as Julia Lee of Burman Invest and Michael McCarthy of CMC Markets debated whether the company Link Administration Holdings (LNK) was a good long-term buy.

Julia gave it the thumbs up but Michael wasn’t prepared to back the story that it was a victim of Brexit.

This interview followed a story I wrote for the Switzer Report, where I employed a Warren Buffet test on LNK. I virtually asked: “Would Warren Buffett buy LNK?” If you want catch up on my full answer, just take a free trial of the Switzer Report but I will give you a hint — this company passed a number of the Buffett tests.

But all this has been outlined because I was staggered by some investigative work by accounting firm Deloitte in 2017 about what investors want out of investing. And let me say, I think some novice investors need a lot of help!

Let me sum up the big findings from the ASX Australian Investor Study 2017:

• 31% of Australian adults hold shares!

• 21% of risk-averse investors expect returns over 10%!

• 81% of young investors want guaranteed returns!

• 60% use advice for investing!

• 40% of those who are investing on stock exchanges or equivalents actively trade!

(If you want to see the total report, click here).

These revelations stagger me, as there are so many investors out there but the numbers who actually go seeking ‘inside info’ from 24/7 experts shows that many investors are part-time players.

For over 11 years, the Sky Business Channel delivered fantastic information for investors and yet its modern day counterpart — the Your Money Channel — lasted only one year before it folded.

And while there were other reasons for the joint venture business between Nine and Sky or News Corp falling over, one of the contributing factors was a lack of interest of investors to expose themselves to more and more information that would have made these people better at making money.

I believe there is a disconnect between what people want (i.e. more money) and what has to be done to make this goal happen.

I often quote the wonderful self-assessment of her career by tennis great Chrissie Evert. She observed of herself: “There were times deep down I wanted to win so badly, that I could actually will it to happen. I think most of my career was based on desire.”

Investors don’t want to win badly. They aren’t committed to know the game.

I was interviewed by ABC Adelaide’s morning radio host, David Bevan, about my new book Join the Rich Club and I said so many people who want more money to buy a house, to bring up their family and to get ready for a comfortable retirement know more about the Adelaide Crows and Collingwood than they do about something important like investing and growing wealth.

Looking at the ASX Study shows that inexperienced investors are living in fairy-dairy land, if they think they can be risk averse and get a stable 10% return!

I can show them how to get 10% per annum in the stock market but they will have to endure approximately three years where the market could fall scarily but over the decade a 10% return historically has shown up.

If you’re investor and you want good returns, you will have to take risks. There are ways to achieve this but you won’t get it through watching too much footie, Games of Thrones and Keeping up with the Kardashians.

Radio host Alan Jones interviewed me today on my new book and he picked out one of my favourite quotes: “If nothing changes, nothing changes.”

It’s so true and if you’re reading this, do what chef and entrepreneur Neil Perry did many years ago.

At the recommendation of his mentor, he did a SWOT on himself. He was asked to look at his strengths, weaknesses, opportunities and threats in relation to the success of his business. He cites this as critical to the turnaround and growth of his business and brand, as he decided to spend more time in important areas and got others to handle the “other stuff”.

If you’re not happy with your money accumulation so far, my advice to you is to spend more time watching shows like our Switzer TV programme and others like it.

Go to money websites like ours and others and be more committed to success, deep down!

If you don’t change you, you won’t change your results.

Pick up a copy of my new book Join the Rich Club today!

If you liked this article you'll love the Switzer Report, our newsletter and website for trustees of self-managed super funds. Click here for a FREE trial and to hear more of Peter’s expert commentary and advice.

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