As many of you know, Tuesday 17 March, 2020, was intended to be the start of the Switzer Investor Strategy Day in Sydney, before the federal government announced a ban on gatherings of over 500 people. Nonetheless, Switzer stands – the show must go on! So our talented team of tech magicians managed to pull together an online live stream, where we hosted our Switzer Investor Strategy Day, with a few alterations, through the web.
While we are all uncertain of what the future holds when it comes to coronavirus, we intend to reschedule our Switzer Investor Strategy Day in the flesh at some point in the near future.
In order to support Switzer’s followers in a very volatile period of uncertainty, we invited our 10 guests into our office studio. The agenda went as follows:
You can also watch the Investor Strategy Day in full via the following link.
Peter and Paul did not let the change of plans interrupt their usual banter, but instead, decided to share some positive insights on coronavirus concerns.
Peter and Paul’s financial careers extended throughout periods like the 1987 crash, and the global financial crisis, and if there is one thing they have learnt it’s that we should listen to patterns of history. The duo agree that this coronavirus pandemic has had three significant differences from previous pandemics and viruses:
Ultimately, no one really knows what the future holds. But we do have history, which tells us that we will likely survive this period, and eventually, everything will turn back to normal.
We then had 10 guests address this theme of concerns from their own industries – ranging from strategy, to overseas equities, to emerging markets, to property to Australian equities, to ESG and even art.
Michael Wayne – Medallion Financial Group
Michael Wayne from Medallion Financial Group discussed best investment strategies during volatile market periods like this.
Michael, like a number of experts who came on the show, say this is the first time they are experiencing an event like this, but judging by history see this as an eventual opportunity to take advantage of.
“There’s not a lot to do at this point but wait for the volatility to subside,” said Michael.
When offering advice to clients, Michael said “be patient and wait for the news flow to improve”.
He agreed that “everything at the moment is unquantifiable”, but did offer some advice for those willing to weigh up the risk and invest in stocks. Michael recommends to “target the sectors that have been hit the hardest because they’ll bounce back the quickest”. Banks, airports and education services are sectors he recommended.
“Refer back to history. Over long periods of time, things tend to recover. Good businesses recover first,” he said.
Jon Tringale – WCM Investment Management
Jon Tringale from WCM Investment Management, a company that offers advice in investing in overseas equities, agrees that the time to buy will be when the news and media flow shifts to a positive tone.
The market, no doubt, will suffer a hit from lost revenue due to cancelled events. But Jon agreed that there will be a time, judging from history, where it will be safe to invest overseas again, but not until the news about coronavirus becomes more positive and people start seeing the light at the end of the tunnel.
Anthony Doyle – Fidelity International
Anthony Doyle from Fidelity International offered advice about investing in emerging markets. He was also the first to admit “we underestimated the impact it [COVID-19] was going to have”. Anthony covered a lot of economic concerns that have emerged out of the coronavirus pandemic, including the contraction of economic growth in Europe and the US, which he says is growing the economic to a halt.
“No one has faced anything like this before,” said Anthony, reflecting on interest rate cuts, fiscal policies and the drop in oil prices, which have seen a quick bear market turnover dropping from record equity highs that we had just 3 weeks ago. But he stands by the fact that it is not the virus itself that is causing such dramatic and volatile market responses - it’s the government responses.
Anthony offered very new insights from a survey of Fidelity’s analysts last week, where their Asia analysts saw China was experiencing a “very scaled economic decline”, while their European analysts understand a market contraction that will last longer, while China’s contraction has plateaued out.
Ben Harrop – Centuria
Ben Harrop from property and investment bond managers, Centuria, offered insights into investing in property in the current market.
“Property has that quality aspect…it’s back to basics kind of stuff. The market risk goes up and down,” said Ben.
Ben also reflected on some of the property lessons from the global financial crisis, which were that “property companies got carried away with debt”.
In property, “the market risk goes up and down” said Ben, but he thinks the greatest impact the current market will have on markets is interest rate cuts. He found the RBA cuts concerning, but the possible contemplation of cutting interest rates to 0 is almost unheard of, and would have a heavy long-term impact on property investments.
Paul Miron – Msquared Capital
Paul Miron from Msquared Capital & Strategic Advisory shared his insights into the work of Msquared and investing in property.
Msquared offers fixed interest investment opportunities secured by registered mortgages over quality, non-specialised real estate located exclusively in central metropolitan locations across the eastern seaboard of Australia, predominantly within Sydney & Melbourne.
The organisation conduct risk assessment on the likelihood of investors being paid back, in relation to low or high risk investors.
Karen Majsay – Travel Associates
Karen Majsay spoke on behalf of Travel Associates, representing the importance of booking through a travel agent when travelling.
Karen, like most of us, did not anticipate the impact coronavirus would have on every aspect of society, but more so the travel industry. She says at the beginning of the year, her biggest concern was the bushfires and arranging for her clients to travel to bushfire-affected areas.
She said a positive impact of the uncertainty surrounding the coronavirus pandemic is that the majority of companies are allowing customers to book with more relaxed conditions and with a much lower penalty than standard bookings.
Her final piece of advise was, “when it does pick back up, everyone should book with a good agent. Support your local!” said Karen.
Tamas Calderwood – eInvest
Tamas Calderwood from eInvest offered advice for investing in Australian equities during this period of market volatility.
Tamas, like all our industry expert guests, agree that the current market is an element of concern and the market is “getting smashed”.
Though, he thinks it is important to track profits, particularly those that are record profits, and that income will eventually come out of this market volatility.
While expected income may be lower than it started, Tamas and eInvest believe it will still go up and it is this hope that we need to hold on to.
“We’ve been through crises before…this is a totally unexpected one, but we presuming everything returns back to normal in a couple of months time…It doesn’t need to be back to the levels we were at before. But just to see things return back to normal…that’s where the market will have some hope,” said Tamas.
Shawn Burns – Contango Asset Management
Shawn Burns from Contango Asset Management also gave insights into investing in Australian equities.
Peter and Shawn went back and forth on the “unusual” and “excessive” global government response to the coronavirus outbreak, Shawn offered some practical tips on Australian stocks that are performing well.
Most industry experts, including Shawn, believe the market will rebound in 3-4 months.
James Harwood – Russell Investments
James Harwood from Russell Investments discussed ESG investing, aka, investing in environmental, social and corporate businesses.
James explored how more people wanted to invest in a sustainable future, setting up a better future for their families and not investing in fossil fuel companies.
ESG’s put the “emotion in investing”, said James.
When it comes to investing overseas, James explained his position in a very timely manner:
“Just like we’ve been told to stay at home, keep your assets at home in Australia!”
Raj Nanda – Nanda\Hobbs
Raj Nanda has held executive positions in major financial groups like UBS, Macquarie Bank and Citibank. He is now the Managing Director of Nanda Hobbs, which is a commercial art gallery that represents a number of talented artists in Australia and abroad. In addition, Nanda\Hobbs have additional services like portfolio management, fine art valuations, income-generation investment structures and art rental services.
According to Raj, “76% of wealth managers consider art as part of a diversified portfolio”.
When it comes to data for art investing, Raj recommends secondary market sites like asd.com.
He says that while art is not as volatile as the stockmarket, it is important to get the support of a gallery or at least do as much research as you can.
Raj says there are a number of ways to get informed about art investing. The first is education seminars (which Nanda\Hobbs host), doing your research, visiting galleries, getting price lists, going on asd.com and looking at options.
Raj wrapped up his talk quite nicely, saying “there’s nothing like using your holiday budget for a piece of art to stare at while you’re stuck at home in isolation!”
Finally, Peter and Paul hosted a 45 minute masterclass on “Protecting your share portfolio”.
At a volatile time like the minute, Peter and Paul offered some effective advice on how to protect your share portfolio with a number of areas to consider, including dividend reinvestment plans, selling your DOGS, making your portfolio more defence, buying ETFs that profit from bear markets, buying index put options and buying stock put options.
Watch the full masterclass HERE from 2:20.