How did you first get interested in investing, and how did FFT start?
To most people, I had it all. Great job, healthy disposable income, new outfit most weeks and a yearly overseas trip that made Instagram posting a sport. Sydney’s social life had me by her talons and I was loving every minute of it. Heck, I was single and in my early 20’s, who wouldn’t be? The only problem was, I was drowning in debt. And I don’t mean paddling around in it, I mean head under water, can’t breathe, scene out of The Godfather kind of drowning! It had consumed my life like a recurring nightmare and despite having flashes of an adult conscience, I just kept spending.
The truth is, I was on a dangerous spiral into a future addicted to debt and the only person I could blame was myself. I was 23. I knew I had to go cold turkey. I knew I had to get sober. And that’s exactly what I did. I cut up my credit cards, all of them. And I started writing about my journey to becoming debt-free. What I didn’t take into account is what would happen when I finally got there and had money in the bank. I started with a small goal to cash savings, then it was a bigger goal, followed by investing in shares and then buying a house.
Turns out that other women were in a position just like me and wanted to learn more about investing…so I kept writing about my experiences and Fearless Female Traders was born. I’ve also recently released a mini e-book on the ‘5-step debt diet’ available as a download on my website!
Is FFT similar or different to sites like Girls On The Money and High Heeled Traders, and how?
I’m a big believer in creating a community of female partnerships who share a common goal – to help women invest! I love following ‘Girls on the Money’ and ‘High Heeled Traders’ and give them my biggest web-high-five for everything they’re doing for female investors. I guess where FFT may differ slightly is that all the blogs, vlogs and partnerships are curated from my personal experience with money. FFT started as a collection of anecdotes from my personal financial journey – kinda like a private journal – and turned into a public diary where I share my experiences into what worked for me, what didn’t, what I failed at, what I didn’t enjoy and what I loved. Money, shares and investing is so personal, I believe it always needs a personal touch.
What kind of advice do you give to women who perceive investing as too risky?
For many women the word “risk” means something to avoid at all costs. And when it comes to investing “risky” is almost always an immediate association! There’s also three myths that I try to bust when talking about risk –
Mistake 1: Cash is safe!
I often here the line “I am going to put all my money into the bank because I want it to be safe”. It is certainly true that cash-based investments make sense if you have short-term objectives like saving for a deposit for a house in 3 years. However, if you have long-term goals like saving for your retirement in 30 years-time, investing in cash is risky. Why? You won’t get capital growth and the value of your investments will be eaten away by that blood sucking leach know as inflation.
Mistake 2: Freaking out over negative returns
When people look at their investment returns with their super or share trading account and see negative numbers over 1 year they sometimes freak out and decide to make drastic changes by switching to something more “conservative”. Believe it or not, this approach isn’t really conservative. Some of the best days in markets can come at a time when it seems everything has turned to custard as we saw in the GFC. By getting out during volatile times you can miss out when markets do recover. Think of it this way – by trying to avoid disasters you can unintentionally create a disaster.
Mistake 3: Forgetting that time heals wounds
When you see how shares can move up and down, the reaction can be “this is not for me because it’s too risky”. The fact of the matter is that investing over the long term helps smooth out those “bumps” you see in markets, especially shares. As Warren Buffett pointed out in the 20th Century, the global economy went through 2 world wars, numerous military conflicts throughout Asia and the Middle East, a great depression and a flu epidemic that killed around 3% of the world’s population. Yet despite these horrific events, the American stock market (the Dow) rose from 68 to 11,722 – a return of 17,107%.
As well as ETPs, have you considered other forms of trading/investing?
Great question! I have definitely considered other forms of trading and investing and in fact have added a few other products/ items in my portfolio more recently. Of course, an exchange traded fund is a cost-effective entry point for new investors that is diversified, well-performing and great for a long-term investment.
But I can’t ignore my passion for healthcare (where my career started) and regularly find myself researching smaller biotechnology companies who are either about to patent or have just entered early phase (I or II) clinical trials in humans to prove safety and efficacy. Usually once it hits this point, you have a good idea as to whether it will meet it’s post-marketing application and hit the market prior to the patent expiring (i.e. before competitors can get their hands on the compound).
I have invested in three health/medical based companies as individual investments and have money in a small managed fund through my bank. Even with all of my research, reading and experience in investing, it has still taken me a while to build my portfolio.
As a BSc and MBA graduate, how (if at all) has this helped your investing?
Definitely! Coming from a science background, my brain tends to go to the logical before the emotional, which helps when you’re investing. As I say, “you should never get emotionally invested in your shares”, it will only break your heart! I also think the constant report writing from labs has set me up with some solid researching skills that I still use today when looking at a new company, share market or report. As for the MBA, well that really solidified my financial skills and gave me fantastic insight into the basics of the share market and investing from a business perspective.
Do you think retail investing in Australia is a viable alternative while the RBA holds at 1.5%?
Given the recent announcement that the cash rate is being held at 1.5%, I have also read speculation from investors that this is expected to remain at 1.5% up until November 2019! This has two effects, 1. Any investment in cash (for example an interest-earning savings account) is likely to suffer. In Australia, we have a popular online cash account called ‘ING’. With their rules (5 purchases a month, minimum $1000 deposit per month etc), the maximum interest rate return is 2.8%, and 2. It’s great for anyone planning on applying for a loan or with a current loan because it means the interest rates will remain low for some time to come and thus repayments will remain low.
In my opinion (and this is just mine #disclaimer!), retail investing in Australia is most certainly a viable alternative, especially since the interest-earned on current cash investments is forecast to remain low for at least another year. Although compound interest is our friend, compound on cash investments will not be able to compete with potential dividends and growth expected in the Australian market in ETF’s and individual companies – for example, in the data sector. I found a gem that I’m thinking of putting some money into, purely because my cash investments aren’t going to grow as much as I would like over the next 12-18months.
The voice of women on trading forums seems in the minority: why do you think this is?
The fact is that the share market, investing, the trading floors has been a very male dominated environment since the inception of trading began. And for many reasons, it’s remained this way right up until today’s socially-driven progressive environment. I’m not sure there is one answer to this, but I’ll attempt to give mine…with a few thoughts:
- When shares were traded on the floor of a large room some many many years ago, with men yelling at one another, it represented the ‘hunt and gather’ behaviours of our ancestors. It was very pre-historic and wasn’t a place that women were necessarily attracted to.
- Fast forward to today, the environment seems to still struggle with the idea of women in trading. Is it sexism? Is it competition? Or is it a lack of awareness? Perhaps it’s a bit of all three but in my opinion, it’s a lack of knowledge. Money and finance has always target the male market, and has completely missed the opportunity to market the female market. The fact is, evidence-based research has unequivocally shown that women are better investors…now we just need to market it to them better!
You posted strong comments on cryptocurrencies: what do you see as the future of investing?
Yes. Well, those opinions still exist! I won’t rant and rave about my disapproval for cryptocurrencies and rather put my energy into blockchain. That right there, is the future of investing! It is estimated to be valued at over $7B by 2022, but I think it will go beyond that. Every major bank and company will be using blockchain as a transparent, regulator-loving, audit-trail for any and all online transactions. I’m looking at blockchain technology now and can’t wait to finish my research so I can invest!
What is your next project with FFT, or after it?
I have recently published my first mini e-book “5-STEP DEBT DIET PLAN” (linked), and I’m in the process of planning and building my “Investment VLOG series”, coming to FFT by the end of July. I’m also writing a full e-book…but with a full-time job, that is happening slowly!
I have been published in Girlboss (US), Mamamia, Huffington Post, Women’s Health Australia, Collective Hub, Kidspot, 9Honey and appeared on Australia’s Channel 9’s A Current Affair Program, been the guest speaker on events.
Interview by: Francesco Sani for “Why we need more (good) female traders” at Babypip discussion threads.
Fearless Female Traders
[Disclaimer: The information in this blog is the opinion of the author only and does not take into account your personal and financial situation. If you have specific questions relating to your own Tax, you should always seek professional advice]