April 8, 2025 • 33 mins
The share markets have dropped hard following a severe bout of selling by institutional investors, but share-broker data suggests that everyday investors are bargain hunting.
What's really going on?
Gemma Dale, head of investor behaviour at NABtrade joins Associate Editor - Wealth, James Kirby in this episode.
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In today's show, we cover:
* What bargain hunters are buying
* Gold drops from the favoured list
* In a Covid-style replay, ETFs underpins the action
* Getting rid of unwanted shares
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:09):
Hello, and welcome to the Australians Money Puzzle podcast. I'm
James Kirby. Welcome aboard everybody. Now, folks, we are in
the middle of what looks like a sharp share market
shakeout and what I'm going to do in the next
two shows is I'm going to split it. And today
(00:29):
I'm going to talk to a professional inside sharebrooking right,
who's also an expert on investor behavior usefully about what's happening,
what's happened so far and why. And later in the
week I'm going to talk to doctor Sam Wiley and
he's going to take We're going to take a deeper
look at what's perhaps evolving in the market now and
(00:51):
what are the dangers and opportunities for you the investor
going forward and put together, I think this is going
to be very useful to you. And just before we start,
if you need contexts, you should know the Australian share
market as we speak in early April, it's down around
ten percent for the year and Wall Street is down
around fifteen percent for the year as we talk this morning,
(01:14):
after an extraordinary session overnight whereby the Dow ended flat
but conceals a lot of drama, and it was actually
touching bear market levels. That is, at one point in
the Wall Street session on Monday this week, American Monday,
they were touching bear market levels twenty percent down from
(01:37):
the top. They had a rally at the end based
on a report that was later contradicted, if not denied,
by the Trump administration that they were going to cool
off on tariffs. Another thing to keep in mind, especially
if you are interested in property, is that interest rates
will now almost certainly Fowell and I've been skeptical about
(01:58):
that to date. Not only that, but they will probably
accelerate the pace of the cuts that were coming through
this year, and it would seem that we could have
anything up to we could see your mortgage basically falling
from six's to six ish to five ish percent, perhaps
official rates falling from four to closer to three percent.
Very important change in the market. So all linked, of course,
(02:19):
and also I think some renewed focus on the capacity
and capabilities inside big super lots to talk about. Okay,
my guest today is Jemma Dale, head of investor behavior
at NAP Trade. She's been on the show before.
Speaker 2 (02:33):
How are you, Gemma, I'm well, thanks, how you good.
Speaker 1 (02:36):
Great to have you on today, Ideal to have you
on today. So let's just talk first and for what
we were talking before the show, and I think listeners
be really interested in this. So what everyone sees so
far is the usual thing. By that I mean share
market plunge. Now, you see, we all use these words
too often, plunge, and we see we get up in
the morning, we see a headline share market plunge is
(02:57):
one percent, two percent. That's not a plunge, right, that's
four if it falls nearly five percent in the single session,
the worst session since COVID. Okay, I'll accept the word plunge.
This week, on that day, only market's falling. We know why,
no mystery is there because of tariffs and the threat
(03:18):
of that. This continues and escalates and gets oursel works,
and until the market sees that there's an end to
it of some sort, we simply cannot make a call
as to when it's going to stop. However, you've been
looking at now this is only a single brokerage, but
it's a big brokerage and ab nap trade. And you
(03:39):
tell me that you're seeing people buying more than selling,
tell me a little bit more about that and what
exactly and who are This.
Speaker 2 (03:47):
Is the best part of my job and it's so interesting.
And we had a clear example of how investors respond
to market volatility, but particularly falls. Right, you talk about volatile.
No one cares about the up and down. What we
care about is the down. Everyone gets a bit bored,
particularly because it's slower and unless interesting. Yeah, or out
(04:11):
the window, out the window, sorry if it's out the window.
So market has plunged, as you say, We saw this
in COVID as well. So COVID market peaked to trough
in three weeks. That was a plunge, right, that was
a very significant collapse, very sharp. Then it turned around
and it raced back up again. And what we saw
(04:32):
from our investors during that period was just an extraordinary
switch from holding cash and very modest trading levels to
very aggressive buying through the fall and as the market
turned around and started climbing back up again. So we
went from a sort of let's say forty five percent sell,
(04:55):
fifty five percent buy. There's always a slight buyas toward
buying because people are building over time, right, the vast
majority of people are not selling shares over time. They're
trying to build a portfolio, so there's always a bit
more selling on average, s a bit more buying on average.
During COVID it went to eighty twenty, so eighty percent
buying twenty percent selling, and most of the selling was
to get back into something else you were rotating through
(05:18):
your portfolio, So huge buying through COVID and also a
huge influx of new investors so our customer base. And
this was true across most of the retail brokerages during
that period.
Speaker 1 (05:31):
Okay, now, so we don't want to talk about which
too much. I'm trying to get a broader picture. But
what you're saying is really interesting. Okay, So this week, then,
in this downturn, your turnover is lifting again and you
are seeing, yet again, you are seeing, let me just
clarify this beyond all doubt, you are seeing people doing
more buying than selling this week.
Speaker 2 (05:52):
Yes, So what we saw on Monday, which was when
the market sort of bottomed out, down six percent very
early in the morning, just after the open, that was
our largest trading day ever including the pandemic. It was
about ten percent higher than our previous largest volumes, and
it was absolutely more buying than selling.
Speaker 1 (06:13):
So the listener will say, if that's going on in
every share Brookridge Fly, is the market.
Speaker 2 (06:18):
Falling Because retail investors are less than twenty percent of
the market, that's the main reason. So the vast majority
of the ASX and global markets is institutional money. That
is superfunds and algorithmic traders and hedge funds and any
number of large institutional investors. They're driving the flows generally,
and retail investors are at the margin what we see,
(06:43):
so they will know you will very rarely see except
in some smaller stocks in particular, which are kind of
retail focused. You tend not to see retail investors driving
the price, particularly as aggressive of when you see volumes
like this, So they're a smaller part of the market.
But we have seen so we have seen some of
our larger investors selling, so they're trimming positions, they're not
(07:08):
selling their whole portfolio. It's always really important to go
you know, if I sell five percent of my portfolio,
that's not the same as selling one hundred percent of
my portfolio. So they're trimming, and some of them will
be trimming positions that they just want to kind of
settle down. There has been a huge influx of cash
to our book over the last twelve months. So cash
has been climbing and climbing.
Speaker 1 (07:29):
Yeah. So these every day investors have built up cash
positions in recent times much more than big super funds
would have, and now they are bargain hunting faster than
big super funds have. Here's the thing. To what extent
do you think your experience in that which is a
major share roker in the market is mirrored in other houses?
Speaker 2 (07:53):
It appears to be relatively similar. I will say our
database were attached to a bank, they skew slightly older,
they skew more experienced. For obvious reasons. You know, younger
people might be attracted to a sort of flashy and
more techi kana name. We tend to have sort of
(08:14):
a lot of self managed super fund retirees. We have
lots of younger investors as well, but it's more representative
the total population rather than a newer broker that might
attract younger people.
Speaker 1 (08:24):
So the chances are the newer brokers younger people are.
The pattern might even be more pronounced.
Speaker 2 (08:30):
It may be, it absolutely may be so younger investors.
I find this really interesting. Younger investors learn to investor
in COVID, and what they learned was by the dip,
and that's what they do.
Speaker 1 (08:40):
And they learned in one crash, yes, that you bought
the and it went flying back up. Right, So it's
a V. COVID is extraordinary. And it was a V
shaped recovery.
Speaker 2 (08:49):
Yeah, there's a Nike swoosh. It kept going past the V.
Speaker 1 (08:52):
Yes. Yeah. And if they had been around in two
or eight, they would have watched the market take two
years to fall fifty in the slow mind.
Speaker 2 (09:01):
Yeah, it didn't make experienced month fIF.
Speaker 1 (09:04):
Right, eighteen months fifty five percent slow torture, a crumbling
share market where you kept thinking it was turned the
corner and it hadn't, Which leads to the question, And
I can't I wouldn't even ask you this. I wouldn't
ask any one person because no one knows. But I
could frame it this way. This generation of bargain hunters
that we're seeing come out of the woodwork this week,
(09:25):
emboldened by COVID. Is there a danger that this is
not like COVID as a reversal.
Speaker 2 (09:35):
I think you're absolutely correct. There is a real risk
because this is restructuring the global economy right if the
tar stick. And this is the difficulty. No one knows
the trump and if you think you do, you're wrong.
You know, it's highly volatile. The decision making is it's volatile,
let's call it that. So it's very difficult to predict
(09:56):
to what extent the twers was stick. There'll be retaliation
and so on. But we do assume that there is
an intention to restructure the global economy and US dominance.
So if we assume that to be correct, inflation will
rise under tariffs, absolutely will, particularly in the US. It
(10:17):
might be deflationary in Australia if we get lots of
cheap goods from China and other people who can't sell
them elsewhere, but inflationary in the US. That puts up
with pressure on rates, which is interesting. It puts downward
pressure on share prices. The US consumer could be absolutely
crushed by this, So there's a real risk that we
sort of fall dramatically into a recession. That is what
(10:37):
has happened in the previous instances of tariff's being implemented
like this. But we're going back a century. Don't have
great data on this.
Speaker 1 (10:45):
We're going back to nineteen the thirties, yeah, okay, on
what people are doing. So we've established that for listeners
that it would seem that people are responding very like COVID,
that they are actually looking for bargains, that they are
actually buying more than selling. This is active every day
(11:05):
investors who sort of people who listen to this show,
they are also perhaps if they are selling there, they're maneuvering.
Maybe they're selling out of gold for instance, after getting
a big run and buying I don't know just about anything, right, yes, so.
Speaker 2 (11:19):
Northern Star was our biggest sell yesterday. You're absolutely correct,
that was the biggest sell.
Speaker 1 (11:24):
Yeah, okay, and that's a gold gold miner. So just
before we go into that sort of deep dive, the
patterns of what people are buying. Are they going back
into the US? Are they going back, if you like,
into the fire? Are they going straight back to the U?
Is it the US bias? Are the ATS?
Speaker 2 (11:40):
We yeah, so not specifically only the US. When we
see ETF buying, it is usually the ASX two hundred
and the S and P five hundred, but there is
also now some world. So misky world is sort of
the benchmark that the UTF matches. I should note all
of the utfs that we see typically are just basic
(12:03):
index ets. They're not managed, they're not leverageda Clain Vanilla, right,
very simple stuff. You know exactly what you're getting, very
cheap as well, very low mars, and lots of good
historical data on the value of investing in that kind
of product if you don't want to pick the stops yourself. Right.
So we have seen that. We have also seen Nasdaq
(12:25):
one hundred and quite a lot of that and World
more broadly. But World is sort of seventy percent US
at the moment, so one would trust that investors know
when you are buying a World ETF, you are getting
a lot of US exposure in that and then a
smaller amount, much smaller amount of the rest of the world.
Speaker 1 (12:47):
Okay, really interesting. We got to take a short break
and we will be back very quickly because this is enthralling. Okay,
back in the moment. Hello, Welcome back to The Australian's
Money Puzzle podcast. James Kirby with Jamma Dale from Nabdate,
(13:07):
head of Investor Behavior, who is always good to talk to.
Ani Date have to mention in the middle of a
share market downturn. Okay, so tell us now what your
data in channel that is showing about people what they're
buying and what they're buying, what they're selling, to the
extent that you could.
Speaker 2 (13:24):
Yeah, absolutely, So one thing I will comment on because
you just sort of asked this question before. There are
different types of investors obviously in any customer set, and
we have hundreds and hundreds of thousands of customers and
so they are quite different. Younger people obviously have a
different portfolio and different trading slash investing behavior than older people,
which is quite typical. One of the main reasons is
(13:45):
older people have been doing it longer and they're much
less likely to own a lot of ETFs. They started
buying direct stocks, so they tend to hold BHP, CBA, CSL, Macquarie.
You know, big Australian companies has been around a long time.
So what though, those guys are doing it at the moment,
and our active trade is they are materials, particularly BHP
(14:07):
and Woodside. Woodside has been absolutely smashed because the oil
prices come off so hard. Uh, BHP obviously a lot
of exposure to China.
Speaker 1 (14:17):
Sorry, just to clarify, people are with these stocks they're
buying or selling them.
Speaker 2 (14:21):
They're buying them.
Speaker 1 (14:22):
They're absolutely they're buying them. They're buying Woodside after the
sell off of the oils because the oil is down
because of a variety of things, including which almost got lost.
We'll pick I've allowed it to go off in the
middle of all this, which which would normally have been
big news, but it didn't get through the crash news. Okay,
So commodity old time commodity miners EH, fossil fuel giants.
Speaker 2 (14:45):
Yes, and banks. Interestingly enough, Westpac, so, CBA, NAB and
I and Z are strong by at the moment, less
so Westpac. But sometimes that's a normalist. That's just one
day and for whatever reason, that just wasn't the So
I don't want to say that's a trend. It just
is what happened yesterday when McQuary got hit really hard
(15:06):
yesterday morning and then bounced quite a lot. So it
was obviously brought in the morning when it was under
a lot of pressure. And mccrary's one of the companies
in Australia with a lot of US earnings and obviously
a lot of exposure to the US.
Speaker 1 (15:18):
Yes, and you sign up people searching in they're doing that.
Do you think there's an element of swinging towards defense
in the chase for income and dividends from the bank
shares particularly.
Speaker 2 (15:33):
It could be that. I think the real risk with
bank shares, and now investors are acutely conscious of this
is they've been until quite recently. If you look at
three of the big four, they've come off very hard.
It looks like CBA has come off hard, but it
hasn't really. I mean CBA was at one hundred dollars
or eighteen months ago. It's still it, what one hundred
(15:54):
and forty ish. Yes, it made it to one hundred
and sixty, but it's not exactly a dramatic pullback when
you consider it is a bank and it perhaps should
not have run sixty percent in eighteen months. It was
quite an extraordinary price, and the year was back at
around three percent. So for our guys, they know the
bank share process is extremely well and they're very reluctant
to chase. They were mostly trimming banks through the last
(16:15):
eighteen months because they felt they had just run too hard.
The rotation back in is interesting. I think it's more
of a quality play than a dividend play, mostly because
they've got lots of banks already.
Speaker 1 (16:28):
Yes, okay, and as you say, it's worth hearing this folks.
You know the franking are fully frank. Years on the
bank shows coming up at seven and eight percent now
with the exception interesting the comebob banks. That is the
thing is it doesn't fall what was it doesn't fall,
(16:49):
but it was the one that was supposed to fall hardest. Yes,
the scause it's run the hardness, but it hasn't. So
that's an interesting I often find when you get this
period of supervolatility in a big sell off there it's
always really worth looking the next thing said, well, what
did actually happen? Which stocks did forward? And the other
themes we could look at? What about the AI and
(17:10):
tech gang.
Speaker 2 (17:13):
In the US. So we'll say that just that difference
between more mature investors, the ones who've been doing this
a long time and have stock portfolios versus newer investors
who tend to have ETF portfolios, because they're quite different cohorts.
The ETF portfolio guys are just loading up, absolutely up,
and we.
Speaker 1 (17:29):
Were loading up on ETFs. Sorry, there's no evidence of them.
Speaker 2 (17:33):
Broadening, and it may happen, but not yet. So what
has happened, and we ran this analysis last year. So
interesting to me is that yes, people buy ettfs and
there's a bit of a just keep buying mentality, and
a lot of it is younger people trying to build
a portfolio over time. And you can extrapolate to say
they're saving up to by home or whatever it is.
They're just trying to build up a portfolio over time.
(17:54):
They use ETF to do that. What we found through
a bit of sort of begging through our data and
analysis is they are not just blindly buying. They are
far more likely to buy. And I mean by a
magnitude of like fifty percent on a day the market
falls by more than one percent, So on a day
when it falls six percent in the morning, they are
(18:16):
going to buy dramatically more and dramatically more people are
going to buy. And I kind of love that. I'm like, well,
you guys, know what you're doing. This is not just
random buying. You're actually trying to time just little winds.
They're little accreative wins, right, Like if you just buy
it one percent cheaper, but you're doing it consistently, that's
(18:37):
quite nice, right, And I think to your question a
little bit earlier, like, do we know whether this is
a V shape recovery like COVID or a horrendous bleed
like two thousand and eight. We don't know. Obviously, we
don't know at this point. But for those people who
are doing cumulative ETF buying, I don't know if they
care an enormous amount. This is just a long term
(18:58):
buying strategy and they will try to buy weakness, and
that tends to be the newer investors. That's just their strategy.
Speaker 1 (19:04):
It's okay, sort of an aggressive exactly.
Speaker 2 (19:06):
Is it quite a sophisticated, simple strategy?
Speaker 1 (19:10):
Yes? Right, okay, very interesting and no obvious swing back
towards the defensive alleged defensive quality of the ASEX with
the high dividend yield.
Speaker 2 (19:20):
Not really. I mean, obviously we sow enormous buying, but
we have seen so much cash piling up. We absolutely
knew people were waiting for a pullback, and they are
absolutely moving on the pullback, which is good to see.
They're not just sitting on cash indefinitely. What is always
interesting to see is what happens as it continues. You know,
it's unlikely you get a sell off. That's three days
only and then it's all over and back to the races.
(19:42):
So it'll be interesting to see what happens.
Speaker 1 (19:44):
It will be interesting to see what happens. Well, that's sure,
but we ruled off the books this morning. We would
all be in trouble, wouldn't we. We'd be all our
super funds. If we were in big super they would
be down considerably because our big super funds are we
know from the statistics, more exposed if you like, to
the US share market and have elevated that exposure recent times.
(20:07):
And they also have more exposure to on listed assets,
which we haven't talked about. Yes, but either they will
drop and if they don't mark them down, they become
imbalanced if you like, because their shares are down, but
their private equity holdings aren't because they haven't marked them down.
So I can't see your way out of that. I
wonder had you look at all at I noticed myself
(20:28):
looking at the listed what I call the listed on list,
the listed on listed market, which is all these funds
which have emerged which give investors exposure to assets that
are private technically, and then they list them on the
stock market and they say there's no contradiction in that.
But I did notice that the funds, private equity funds
(20:50):
and private credit funds that are listed on the ASEX.
This is very broad, but they are down perhaps fifty
percent more than the market itself. So the market being
down ten percent this year so far, some of those
big funds down fifteen percent or more. I thought it
might didn't be sharper, And I think any observations on
that whole scene for our listeners.
Speaker 2 (21:11):
I think the comment I would make, we do not
see a lot of appetite for that kind of product
and structure on. Yeah, So if you look at our
younger investors, they're just buying plain vanilla retfs and that
is their strategy, and they're very consistent about it. So
they're quite sophisticated. They try to time it, but they're
quite happy to take a small win rather than looking
(21:34):
to time it perfectly and hold out in cash for
a year and a half waiting for a pullback. You know,
they're just happy to buy consistently. When you look at
our more mature investors, and again this is a bit
of an experienced thing. A lot of them are around
during the GFC and they have seen what happens to
I liquid assets, regardless of whether or not they're in
a liquid structure. They've seen what happens, and it's very
(21:56):
clear that they are steering well away from things that
they don't understand and when they diversify away from direct
equity portfolio. So you know, they have a direct equity
portfolio that have some cash. We obviously don't see everything
they have off platform. They have lots of other things
generally as well. But if they do go into something
(22:16):
beyond their ASX listed exposure, they tend to stay with
stuff that's pretty vanilla and pretty transparent. You know, they'll
go into international equities, you know, they'll go into some
rates and so on, but then going into more opaque
structures at all.
Speaker 1 (22:32):
I just want to ask you almost repeat, is that
in your It seems as you have come to a
conclusion on your own database at NAP trade that the
older investor has stocks. They probably started off someone said
to them by ten stocks. They went in, they bolt
two banks, two minors, they've got a supermarket. They played
around the edges, et cetera. Some years younger went in
and they started buying ETFs. Then they both then they
(22:54):
maybe increased their sophistication of their portfolio. They had the AX,
the S and P. Then they bought NASDAK, then they
bought Miski, then they bought something US small caps or whatever.
All fine, here's the thing. It seems to me, if
it keeps going the way it is, that the ETF
investors will dominate your platform sooner or later.
Speaker 2 (23:13):
So I get this question a lot, and it's really interesting,
and no, I love it. I think it's such an
interesting question. Right, So, pre COVID ETFs were four percent
of our holdings. They are now fourteen percent of our holdings.
Fourteen percent still pretty small of a yeah, holdings of
what people hold overall, so we don't manage it for them.
(23:35):
Just sits on the platform. Yeah, fourteen percent. So that's
bigger than any individual holding, It's not dramatically bigger. So
the sort of top ten Australian stocks, top ten ASX
stocks make up about fifty percent of holdings. You know,
(23:56):
has that shrunk?
Speaker 1 (23:57):
Has that shrunk to thet You've.
Speaker 2 (23:59):
Got to remember our customer base doubled, So the weight
of ETF holding sits in the newer investors, the weight
not all of them, obviously some of our more mature
investors hold ETFs as well, but they tend to add
them to their portfolio. They don't go, God, I'm really
awful at managing my own portfolio. I'm going to sell
it all down and go into an ETF. They go, oh,
here's the thing I don't hold. I'll get some S
(24:20):
and P five hundred. So yeah, it's I think what
is worth noting is, obviously the number of investors has grown.
And I'm extrapolating across the industry here because I suspect
it's true, particularly for our bigger competitor. There's one competitor
that's bigger th enough. And what you see is your
newer investors are growing the ETF book, and your existing
(24:41):
investors have a lot of direct equities, and then they
might can nearbor. Yes.
Speaker 1 (24:46):
Interesting, so, I think, folks, because we are because the
large investors, the institution investors, dominate the market and swing
the market one way or another. Just be aware of
this that though it looks like the everyone's selling and
getting out of the stock market, or at least, you know,
unloading lots of shares, it's not everyone. It's largely institutional
(25:09):
investors and pension funds, your own pension fund, no doubt,
your own super fund. But it's not you the active investor,
which is very much our listener. Really interesting. Okay, Gemma,
take short break. We'll come back with some questions. Hello,
(25:30):
Welcome back to The Australian's Money Puzzle podcast. I'm James
Kirby talking to Jemma Dale of KNAB Trade, who's just
been telling us some very interesting insights into what's been
going on behind the headlines really of this share market downturn.
It is very much an mirror image of what happened
(25:51):
in the COVID downturn. Except we know how the COVID
downturn ended. We don't know how this one ends. We
don't know. Sorry, folks, tell you what we don't. I'm
not even going to try a quick not so much question.
But a couple of quite a few messages came in
over the weekend, basically all say the same thing, that
I was biased against industry funds. I'm not at all,
(26:14):
and I regularly would say that they suit many people,
but I would also very quickly say they should never
be beyond question. Someone also meant the point that as
a journalist day and writer, you should regularly declare that
you have an SMSF. I regularly declare I have an SMSF.
I have an SMSF. I would have mentioned it on
the show many times. And just for the record, my
(26:36):
other half is in an industry fund, you see, all
her life, and despite my entreaties, is involved. Yes, of
course trustee of the Curbly Superinnuation Fund, but has her
industry fund going too. So let me tell you there
are no biases on that. And look, I would just
say it would be silly of me to have them.
But there would be times, I suppose on a live
(26:57):
show like this where if I'm digging in on a
certain theme, it may seem so, but I would strenuously
defend that I would have an independent view on, especially
on these big themes. But thank you all the same, everybody,
and do always give us your impressions or observations on
that sort of thing and keep me in line, all right.
(27:20):
Question from Danny. Question relates to government health funds. How
those listed private health companies go since they were battered
from pillar to post, Gemma, the Ramses and co. I
mean they've been sought off anyway. I haven't looked but
I preserved they couldn't have been sought off much further
in this route and health scope. My bi hanging on
(27:41):
there and in the middle of it of a takeover
place should be interesting anyway, quickly, folks, Delly says, if
my question relates to government health fund loading fee cover
for over thirty one year olds, you all know about that.
If you're over thirty one day, they double get you
if you don't get your cover. So he says it's
(28:01):
often better. You're often better off paying Medicare levy than
the health cover due to expensive loading. So you could
easily be persuaded to buy health cover private insurance cover
if you are older over thirty one. What are your
thoughts on this? Okay? We went to James Gerard, our
friend financial advisor. He says the loading is collected by
the private health insurer and not forwarded to the government.
(28:23):
It's the private health surer keeps the loading correct. There
are several instances where the Medicare levy search charge will
work out better than the hospital coverage under a private
health insurance policy. This signals the actual benefits of the
policy and purely focuses on what is less pain financially,
what is cheaper? Okay? And then James says, as Daney noted,
(28:44):
O the people who are liable for a large surcharge
and people whose income is just over the threshold for
the surcharge may be better off just paying the surcharge.
But if you go down the path of paying the
surcharge and sidestepping a hospital insurance policy and make sure
you have a good public hospital nearby because you never
know when you might need it, what there you are?
James Gerard has covered all potential angles there, but it
(29:05):
is it's something that has come up, and it's something
we're quite acutely aware of. And that's always the answer,
to be honest with you, if you if it's strictly speaking,
if you want to do with the cheapest way, you
know it's quite obvious what to do, but you take
a risk, all right? Now? A question from Keaton where
Jema can come back in? I hope Keaton first name says,
(29:27):
a share I regrettably bought was recently delisted from the
ASX and listed on the NSX. I've never heard of
this exchange. My understanding is I need to sell my
shares to write off the loss against my gains from
selling other more successful shares. What is the easiest way
to do this? Help would be appreciated. Okay, no advice.
(29:50):
We never give you advice. This is information only and
you would never just on the phrasing there. I expect
all the I'm talking to, all the Keatons in the
world need to sell shares to write off the last
against capital gains. You may do so if you wish,
but that would be the theory behind that would be
(30:10):
you do it if you want to do it. All right? Ever,
hear of the NSX gemen. Do you deal with them
at all?
Speaker 2 (30:16):
So, yes, I'm aware of it. We do not offer
the NSX. We do offer tri X. We don't offer
the NX. We offer you off for THEX.
Speaker 1 (30:25):
We should help keeping first of all by telling him,
you know, it's basically it's in an attempt as an
alternative exchange to the AX. There's been several of them.
There are several of them, very very small and not
particularly well known, but.
Speaker 2 (30:38):
Yeah, yeah, still small. If you go to their website,
it'd actually list the brokers that you can use to
trade through them. So Keaton, if you want to go
to their website, you can find out who will be
able to place trades on your behalf through that exchange,
and you can potentially get them to act on your behalf.
Speaker 1 (30:56):
And it's a perfect I mean to make it clear,
it's a perfectly legitimate exchange. Have This is just an
attempt and there have been several attempts. And there are
other exchanges that you mentioned another one X yeah X
c hi dah X you see.
Speaker 2 (31:12):
Now, goodness may I'm out of date now called used
to be called t X. Sorry giving away my age already.
Speaker 1 (31:22):
If you think about the US, you know they've got
different markets, right, we don't talk about you know, they
got the S and P, they got the Dow Jones,
they got the nasdak all in the one country and
there wasn't There's been attempts to try and build and
not to have the AX have a monopoly, which is
not a healthy thing at all. But that's the historical
background there. NSX is a perfectly just useful small exchange
(31:45):
and as Jemma says, just look at their website to
see the brokers they use. And if you then should
desire to sell your shares for whatever reason, including the
fact that they don't seem to have been going very well.
If you say the word regrettably holding them, then you
can just pick one of those brokers, all right. Terrific. Well, Gemma,
what a great time to have you on. We could
(32:05):
talk every day, good market, We could talk every morning
for a while and it would all be really interesting
for our listeners. I thought today was terrific, a really
fresh insight into what's going up, back, going on, back up,
statistically and evidence based, which is what we are all
about here. Okay, thanks very much, Gemma.
Speaker 2 (32:25):
Absolute pleasure. Thank you for having me.
Speaker 1 (32:27):
Great to have you on, as always, great to have
Jemma Daye there of trade, head of investor behavior and
something of a doyen of market inside trading data, which
on days like this or weeks like this, is very
interesting to know. So turns out active investors, independent investors
are actually in their bargain hunting already, folks. We will
(32:49):
see how they get on in the days to come.
We will talk to Sam Wiley later in the week.
Until then, let's have some more correspondence. Great to have
those questions today The Money Puzzle at the Australia dot
Com dot AU. Today's show was produced by the Assema Group.
Talk to you soon, HM,
Hello, and welcome to the Australians Money Puzzle podcast. I'm
James Kirby. Welcome aboard everybody. Now, folks, we are in
the middle of what looks like a sharp share market
shakeout and what I'm going to do in the next
two shows is I'm going to split it. And today
(00:29):
I'm going to talk to a professional inside sharebrooking right,
who's also an expert on investor behavior usefully about what's happening,
what's happened so far and why. And later in the
week I'm going to talk to doctor Sam Wiley and
he's going to take We're going to take a deeper
look at what's perhaps evolving in the market now and
(00:51):
what are the dangers and opportunities for you the investor
going forward and put together, I think this is going
to be very useful to you. And just before we start,
if you need contexts, you should know the Australian share
market as we speak in early April, it's down around
ten percent for the year and Wall Street is down
around fifteen percent for the year as we talk this morning,
(01:14):
after an extraordinary session overnight whereby the Dow ended flat
but conceals a lot of drama, and it was actually
touching bear market levels. That is, at one point in
the Wall Street session on Monday this week, American Monday,
they were touching bear market levels twenty percent down from
(01:37):
the top. They had a rally at the end based
on a report that was later contradicted, if not denied,
by the Trump administration that they were going to cool
off on tariffs. Another thing to keep in mind, especially
if you are interested in property, is that interest rates
will now almost certainly Fowell and I've been skeptical about
(01:58):
that to date. Not only that, but they will probably
accelerate the pace of the cuts that were coming through
this year, and it would seem that we could have
anything up to we could see your mortgage basically falling
from six's to six ish to five ish percent, perhaps
official rates falling from four to closer to three percent.
Very important change in the market. So all linked, of course,
(02:19):
and also I think some renewed focus on the capacity
and capabilities inside big super lots to talk about. Okay,
my guest today is Jemma Dale, head of investor behavior
at NAP Trade. She's been on the show before.
Speaker 2 (02:33):
How are you, Gemma, I'm well, thanks, how you good.
Speaker 1 (02:36):
Great to have you on today, Ideal to have you
on today. So let's just talk first and for what
we were talking before the show, and I think listeners
be really interested in this. So what everyone sees so
far is the usual thing. By that I mean share
market plunge. Now, you see, we all use these words
too often, plunge, and we see we get up in
the morning, we see a headline share market plunge is
(02:57):
one percent, two percent. That's not a plunge, right, that's
four if it falls nearly five percent in the single session,
the worst session since COVID. Okay, I'll accept the word plunge.
This week, on that day, only market's falling. We know why,
no mystery is there because of tariffs and the threat
(03:18):
of that. This continues and escalates and gets oursel works,
and until the market sees that there's an end to
it of some sort, we simply cannot make a call
as to when it's going to stop. However, you've been
looking at now this is only a single brokerage, but
it's a big brokerage and ab nap trade. And you
(03:39):
tell me that you're seeing people buying more than selling,
tell me a little bit more about that and what
exactly and who are This.
Speaker 2 (03:47):
Is the best part of my job and it's so interesting.
And we had a clear example of how investors respond
to market volatility, but particularly falls. Right, you talk about volatile.
No one cares about the up and down. What we
care about is the down. Everyone gets a bit bored,
particularly because it's slower and unless interesting. Yeah, or out
(04:11):
the window, out the window, sorry if it's out the window.
So market has plunged, as you say, We saw this
in COVID as well. So COVID market peaked to trough
in three weeks. That was a plunge, right, that was
a very significant collapse, very sharp. Then it turned around
and it raced back up again. And what we saw
(04:32):
from our investors during that period was just an extraordinary
switch from holding cash and very modest trading levels to
very aggressive buying through the fall and as the market
turned around and started climbing back up again. So we
went from a sort of let's say forty five percent sell,
(04:55):
fifty five percent buy. There's always a slight buyas toward
buying because people are building over time, right, the vast
majority of people are not selling shares over time. They're
trying to build a portfolio, so there's always a bit
more selling on average, s a bit more buying on average.
During COVID it went to eighty twenty, so eighty percent
buying twenty percent selling, and most of the selling was
to get back into something else you were rotating through
(05:18):
your portfolio, So huge buying through COVID and also a
huge influx of new investors so our customer base. And
this was true across most of the retail brokerages during
that period.
Speaker 1 (05:31):
Okay, now, so we don't want to talk about which
too much. I'm trying to get a broader picture. But
what you're saying is really interesting. Okay, So this week, then,
in this downturn, your turnover is lifting again and you
are seeing, yet again, you are seeing, let me just
clarify this beyond all doubt, you are seeing people doing
more buying than selling this week.
Speaker 2 (05:52):
Yes, So what we saw on Monday, which was when
the market sort of bottomed out, down six percent very
early in the morning, just after the open, that was
our largest trading day ever including the pandemic. It was
about ten percent higher than our previous largest volumes, and
it was absolutely more buying than selling.
Speaker 1 (06:13):
So the listener will say, if that's going on in
every share Brookridge Fly, is the market.
Speaker 2 (06:18):
Falling Because retail investors are less than twenty percent of
the market, that's the main reason. So the vast majority
of the ASX and global markets is institutional money. That
is superfunds and algorithmic traders and hedge funds and any
number of large institutional investors. They're driving the flows generally,
and retail investors are at the margin what we see,
(06:43):
so they will know you will very rarely see except
in some smaller stocks in particular, which are kind of
retail focused. You tend not to see retail investors driving
the price, particularly as aggressive of when you see volumes
like this, So they're a smaller part of the market.
But we have seen so we have seen some of
our larger investors selling, so they're trimming positions, they're not
(07:08):
selling their whole portfolio. It's always really important to go
you know, if I sell five percent of my portfolio,
that's not the same as selling one hundred percent of
my portfolio. So they're trimming, and some of them will
be trimming positions that they just want to kind of
settle down. There has been a huge influx of cash
to our book over the last twelve months. So cash
has been climbing and climbing.
Speaker 1 (07:29):
Yeah. So these every day investors have built up cash
positions in recent times much more than big super funds
would have, and now they are bargain hunting faster than
big super funds have. Here's the thing. To what extent
do you think your experience in that which is a
major share roker in the market is mirrored in other houses?
Speaker 2 (07:53):
It appears to be relatively similar. I will say our
database were attached to a bank, they skew slightly older,
they skew more experienced. For obvious reasons. You know, younger
people might be attracted to a sort of flashy and
more techi kana name. We tend to have sort of
(08:14):
a lot of self managed super fund retirees. We have
lots of younger investors as well, but it's more representative
the total population rather than a newer broker that might
attract younger people.
Speaker 1 (08:24):
So the chances are the newer brokers younger people are.
The pattern might even be more pronounced.
Speaker 2 (08:30):
It may be, it absolutely may be so younger investors.
I find this really interesting. Younger investors learn to investor
in COVID, and what they learned was by the dip,
and that's what they do.
Speaker 1 (08:40):
And they learned in one crash, yes, that you bought
the and it went flying back up. Right, So it's
a V. COVID is extraordinary. And it was a V
shaped recovery.
Speaker 2 (08:49):
Yeah, there's a Nike swoosh. It kept going past the V.
Speaker 1 (08:52):
Yes. Yeah. And if they had been around in two
or eight, they would have watched the market take two
years to fall fifty in the slow mind.
Speaker 2 (09:01):
Yeah, it didn't make experienced month fIF.
Speaker 1 (09:04):
Right, eighteen months fifty five percent slow torture, a crumbling
share market where you kept thinking it was turned the
corner and it hadn't, Which leads to the question, And
I can't I wouldn't even ask you this. I wouldn't
ask any one person because no one knows. But I
could frame it this way. This generation of bargain hunters
that we're seeing come out of the woodwork this week,
(09:25):
emboldened by COVID. Is there a danger that this is
not like COVID as a reversal.
Speaker 2 (09:35):
I think you're absolutely correct. There is a real risk
because this is restructuring the global economy right if the
tar stick. And this is the difficulty. No one knows
the trump and if you think you do, you're wrong.
You know, it's highly volatile. The decision making is it's volatile,
let's call it that. So it's very difficult to predict
(09:56):
to what extent the twers was stick. There'll be retaliation
and so on. But we do assume that there is
an intention to restructure the global economy and US dominance.
So if we assume that to be correct, inflation will
rise under tariffs, absolutely will, particularly in the US. It
(10:17):
might be deflationary in Australia if we get lots of
cheap goods from China and other people who can't sell
them elsewhere, but inflationary in the US. That puts up
with pressure on rates, which is interesting. It puts downward
pressure on share prices. The US consumer could be absolutely
crushed by this, So there's a real risk that we
sort of fall dramatically into a recession. That is what
(10:37):
has happened in the previous instances of tariff's being implemented
like this. But we're going back a century. Don't have
great data on this.
Speaker 1 (10:45):
We're going back to nineteen the thirties, yeah, okay, on
what people are doing. So we've established that for listeners
that it would seem that people are responding very like COVID,
that they are actually looking for bargains, that they are
actually buying more than selling. This is active every day
(11:05):
investors who sort of people who listen to this show,
they are also perhaps if they are selling there, they're maneuvering.
Maybe they're selling out of gold for instance, after getting
a big run and buying I don't know just about anything, right, yes, so.
Speaker 2 (11:19):
Northern Star was our biggest sell yesterday. You're absolutely correct,
that was the biggest sell.
Speaker 1 (11:24):
Yeah, okay, and that's a gold gold miner. So just
before we go into that sort of deep dive, the
patterns of what people are buying. Are they going back
into the US? Are they going back, if you like,
into the fire? Are they going straight back to the U?
Is it the US bias? Are the ATS?
Speaker 2 (11:40):
We yeah, so not specifically only the US. When we
see ETF buying, it is usually the ASX two hundred
and the S and P five hundred, but there is
also now some world. So misky world is sort of
the benchmark that the UTF matches. I should note all
of the utfs that we see typically are just basic
(12:03):
index ets. They're not managed, they're not leverageda Clain Vanilla, right,
very simple stuff. You know exactly what you're getting, very
cheap as well, very low mars, and lots of good
historical data on the value of investing in that kind
of product if you don't want to pick the stops yourself. Right.
So we have seen that. We have also seen Nasdaq
(12:25):
one hundred and quite a lot of that and World
more broadly. But World is sort of seventy percent US
at the moment, so one would trust that investors know
when you are buying a World ETF, you are getting
a lot of US exposure in that and then a
smaller amount, much smaller amount of the rest of the world.
Speaker 1 (12:47):
Okay, really interesting. We got to take a short break
and we will be back very quickly because this is enthralling. Okay,
back in the moment. Hello, Welcome back to The Australian's
Money Puzzle podcast. James Kirby with Jamma Dale from Nabdate,
(13:07):
head of Investor Behavior, who is always good to talk to.
Ani Date have to mention in the middle of a
share market downturn. Okay, so tell us now what your
data in channel that is showing about people what they're
buying and what they're buying, what they're selling, to the
extent that you could.
Speaker 2 (13:24):
Yeah, absolutely, So one thing I will comment on because
you just sort of asked this question before. There are
different types of investors obviously in any customer set, and
we have hundreds and hundreds of thousands of customers and
so they are quite different. Younger people obviously have a
different portfolio and different trading slash investing behavior than older people,
which is quite typical. One of the main reasons is
(13:45):
older people have been doing it longer and they're much
less likely to own a lot of ETFs. They started
buying direct stocks, so they tend to hold BHP, CBA, CSL, Macquarie.
You know, big Australian companies has been around a long time.
So what though, those guys are doing it at the moment,
and our active trade is they are materials, particularly BHP
(14:07):
and Woodside. Woodside has been absolutely smashed because the oil
prices come off so hard. Uh, BHP obviously a lot
of exposure to China.
Speaker 1 (14:17):
Sorry, just to clarify, people are with these stocks they're
buying or selling them.
Speaker 2 (14:21):
They're buying them.
Speaker 1 (14:22):
They're absolutely they're buying them. They're buying Woodside after the
sell off of the oils because the oil is down
because of a variety of things, including which almost got lost.
We'll pick I've allowed it to go off in the
middle of all this, which which would normally have been
big news, but it didn't get through the crash news. Okay,
So commodity old time commodity miners EH, fossil fuel giants.
Speaker 2 (14:45):
Yes, and banks. Interestingly enough, Westpac, so, CBA, NAB and
I and Z are strong by at the moment, less
so Westpac. But sometimes that's a normalist. That's just one
day and for whatever reason, that just wasn't the So
I don't want to say that's a trend. It just
is what happened yesterday when McQuary got hit really hard
(15:06):
yesterday morning and then bounced quite a lot. So it
was obviously brought in the morning when it was under
a lot of pressure. And mccrary's one of the companies
in Australia with a lot of US earnings and obviously
a lot of exposure to the US.
Speaker 1 (15:18):
Yes, and you sign up people searching in they're doing that.
Do you think there's an element of swinging towards defense
in the chase for income and dividends from the bank
shares particularly.
Speaker 2 (15:33):
It could be that. I think the real risk with
bank shares, and now investors are acutely conscious of this
is they've been until quite recently. If you look at
three of the big four, they've come off very hard.
It looks like CBA has come off hard, but it
hasn't really. I mean CBA was at one hundred dollars
or eighteen months ago. It's still it, what one hundred
(15:54):
and forty ish. Yes, it made it to one hundred
and sixty, but it's not exactly a dramatic pullback when
you consider it is a bank and it perhaps should
not have run sixty percent in eighteen months. It was
quite an extraordinary price, and the year was back at
around three percent. So for our guys, they know the
bank share process is extremely well and they're very reluctant
to chase. They were mostly trimming banks through the last
(16:15):
eighteen months because they felt they had just run too hard.
The rotation back in is interesting. I think it's more
of a quality play than a dividend play, mostly because
they've got lots of banks already.
Speaker 1 (16:28):
Yes, okay, and as you say, it's worth hearing this folks.
You know the franking are fully frank. Years on the
bank shows coming up at seven and eight percent now
with the exception interesting the comebob banks. That is the
thing is it doesn't fall what was it doesn't fall,
(16:49):
but it was the one that was supposed to fall hardest. Yes,
the scause it's run the hardness, but it hasn't. So
that's an interesting I often find when you get this
period of supervolatility in a big sell off there it's
always really worth looking the next thing said, well, what
did actually happen? Which stocks did forward? And the other
themes we could look at? What about the AI and
(17:10):
tech gang.
Speaker 2 (17:13):
In the US. So we'll say that just that difference
between more mature investors, the ones who've been doing this
a long time and have stock portfolios versus newer investors
who tend to have ETF portfolios, because they're quite different cohorts.
The ETF portfolio guys are just loading up, absolutely up,
and we.
Speaker 1 (17:29):
Were loading up on ETFs. Sorry, there's no evidence of them.
Speaker 2 (17:33):
Broadening, and it may happen, but not yet. So what
has happened, and we ran this analysis last year. So
interesting to me is that yes, people buy ettfs and
there's a bit of a just keep buying mentality, and
a lot of it is younger people trying to build
a portfolio over time. And you can extrapolate to say
they're saving up to by home or whatever it is.
They're just trying to build up a portfolio over time.
(17:54):
They use ETF to do that. What we found through
a bit of sort of begging through our data and
analysis is they are not just blindly buying. They are
far more likely to buy. And I mean by a
magnitude of like fifty percent on a day the market
falls by more than one percent, So on a day
when it falls six percent in the morning, they are
(18:16):
going to buy dramatically more and dramatically more people are
going to buy. And I kind of love that. I'm like, well,
you guys, know what you're doing. This is not just
random buying. You're actually trying to time just little winds.
They're little accreative wins, right, Like if you just buy
it one percent cheaper, but you're doing it consistently, that's
(18:37):
quite nice, right, And I think to your question a
little bit earlier, like, do we know whether this is
a V shape recovery like COVID or a horrendous bleed
like two thousand and eight. We don't know. Obviously, we
don't know at this point. But for those people who
are doing cumulative ETF buying, I don't know if they
care an enormous amount. This is just a long term
(18:58):
buying strategy and they will try to buy weakness, and
that tends to be the newer investors. That's just their strategy.
Speaker 1 (19:04):
It's okay, sort of an aggressive exactly.
Speaker 2 (19:06):
Is it quite a sophisticated, simple strategy?
Speaker 1 (19:10):
Yes? Right, okay, very interesting and no obvious swing back
towards the defensive alleged defensive quality of the ASEX with
the high dividend yield.
Speaker 2 (19:20):
Not really. I mean, obviously we sow enormous buying, but
we have seen so much cash piling up. We absolutely
knew people were waiting for a pullback, and they are
absolutely moving on the pullback, which is good to see.
They're not just sitting on cash indefinitely. What is always
interesting to see is what happens as it continues. You know,
it's unlikely you get a sell off. That's three days
only and then it's all over and back to the races.
(19:42):
So it'll be interesting to see what happens.
Speaker 1 (19:44):
It will be interesting to see what happens. Well, that's sure,
but we ruled off the books this morning. We would
all be in trouble, wouldn't we. We'd be all our
super funds. If we were in big super they would
be down considerably because our big super funds are we
know from the statistics, more exposed if you like, to
the US share market and have elevated that exposure recent times.
(20:07):
And they also have more exposure to on listed assets,
which we haven't talked about. Yes, but either they will
drop and if they don't mark them down, they become
imbalanced if you like, because their shares are down, but
their private equity holdings aren't because they haven't marked them down.
So I can't see your way out of that. I
wonder had you look at all at I noticed myself
(20:28):
looking at the listed what I call the listed on list,
the listed on listed market, which is all these funds
which have emerged which give investors exposure to assets that
are private technically, and then they list them on the
stock market and they say there's no contradiction in that.
But I did notice that the funds, private equity funds
(20:50):
and private credit funds that are listed on the ASEX.
This is very broad, but they are down perhaps fifty
percent more than the market itself. So the market being
down ten percent this year so far, some of those
big funds down fifteen percent or more. I thought it
might didn't be sharper, And I think any observations on
that whole scene for our listeners.
Speaker 2 (21:11):
I think the comment I would make, we do not
see a lot of appetite for that kind of product
and structure on. Yeah, So if you look at our
younger investors, they're just buying plain vanilla retfs and that
is their strategy, and they're very consistent about it. So
they're quite sophisticated. They try to time it, but they're
quite happy to take a small win rather than looking
(21:34):
to time it perfectly and hold out in cash for
a year and a half waiting for a pullback. You know,
they're just happy to buy consistently. When you look at
our more mature investors, and again this is a bit
of an experienced thing. A lot of them are around
during the GFC and they have seen what happens to
I liquid assets, regardless of whether or not they're in
a liquid structure. They've seen what happens, and it's very
(21:56):
clear that they are steering well away from things that
they don't understand and when they diversify away from direct
equity portfolio. So you know, they have a direct equity
portfolio that have some cash. We obviously don't see everything
they have off platform. They have lots of other things
generally as well. But if they do go into something
(22:16):
beyond their ASX listed exposure, they tend to stay with
stuff that's pretty vanilla and pretty transparent. You know, they'll
go into international equities, you know, they'll go into some
rates and so on, but then going into more opaque
structures at all.
Speaker 1 (22:32):
I just want to ask you almost repeat, is that
in your It seems as you have come to a
conclusion on your own database at NAP trade that the
older investor has stocks. They probably started off someone said
to them by ten stocks. They went in, they bolt
two banks, two minors, they've got a supermarket. They played
around the edges, et cetera. Some years younger went in
and they started buying ETFs. Then they both then they
(22:54):
maybe increased their sophistication of their portfolio. They had the AX,
the S and P. Then they bought NASDAK, then they
bought Miski, then they bought something US small caps or whatever.
All fine, here's the thing. It seems to me, if
it keeps going the way it is, that the ETF
investors will dominate your platform sooner or later.
Speaker 2 (23:13):
So I get this question a lot, and it's really interesting,
and no, I love it. I think it's such an
interesting question. Right, So, pre COVID ETFs were four percent
of our holdings. They are now fourteen percent of our holdings.
Fourteen percent still pretty small of a yeah, holdings of
what people hold overall, so we don't manage it for them.
(23:35):
Just sits on the platform. Yeah, fourteen percent. So that's
bigger than any individual holding, It's not dramatically bigger. So
the sort of top ten Australian stocks, top ten ASX
stocks make up about fifty percent of holdings. You know,
(23:56):
has that shrunk?
Speaker 1 (23:57):
Has that shrunk to thet You've.
Speaker 2 (23:59):
Got to remember our customer base doubled, So the weight
of ETF holding sits in the newer investors, the weight
not all of them, obviously some of our more mature
investors hold ETFs as well, but they tend to add
them to their portfolio. They don't go, God, I'm really
awful at managing my own portfolio. I'm going to sell
it all down and go into an ETF. They go, oh,
here's the thing I don't hold. I'll get some S
(24:20):
and P five hundred. So yeah, it's I think what
is worth noting is, obviously the number of investors has grown.
And I'm extrapolating across the industry here because I suspect
it's true, particularly for our bigger competitor. There's one competitor
that's bigger th enough. And what you see is your
newer investors are growing the ETF book, and your existing
(24:41):
investors have a lot of direct equities, and then they
might can nearbor. Yes.
Speaker 1 (24:46):
Interesting, so, I think, folks, because we are because the
large investors, the institution investors, dominate the market and swing
the market one way or another. Just be aware of
this that though it looks like the everyone's selling and
getting out of the stock market, or at least, you know,
unloading lots of shares, it's not everyone. It's largely institutional
(25:09):
investors and pension funds, your own pension fund, no doubt,
your own super fund. But it's not you the active investor,
which is very much our listener. Really interesting. Okay, Gemma,
take short break. We'll come back with some questions. Hello,
(25:30):
Welcome back to The Australian's Money Puzzle podcast. I'm James
Kirby talking to Jemma Dale of KNAB Trade, who's just
been telling us some very interesting insights into what's been
going on behind the headlines really of this share market downturn.
It is very much an mirror image of what happened
(25:51):
in the COVID downturn. Except we know how the COVID
downturn ended. We don't know how this one ends. We
don't know. Sorry, folks, tell you what we don't. I'm
not even going to try a quick not so much question.
But a couple of quite a few messages came in
over the weekend, basically all say the same thing, that
I was biased against industry funds. I'm not at all,
(26:14):
and I regularly would say that they suit many people,
but I would also very quickly say they should never
be beyond question. Someone also meant the point that as
a journalist day and writer, you should regularly declare that
you have an SMSF. I regularly declare I have an SMSF.
I have an SMSF. I would have mentioned it on
the show many times. And just for the record, my
(26:36):
other half is in an industry fund, you see, all
her life, and despite my entreaties, is involved. Yes, of
course trustee of the Curbly Superinnuation Fund, but has her
industry fund going too. So let me tell you there
are no biases on that. And look, I would just
say it would be silly of me to have them.
But there would be times, I suppose on a live
(26:57):
show like this where if I'm digging in on a
certain theme, it may seem so, but I would strenuously
defend that I would have an independent view on, especially
on these big themes. But thank you all the same, everybody,
and do always give us your impressions or observations on
that sort of thing and keep me in line, all right.
(27:20):
Question from Danny. Question relates to government health funds. How
those listed private health companies go since they were battered
from pillar to post, Gemma, the Ramses and co. I
mean they've been sought off anyway. I haven't looked but
I preserved they couldn't have been sought off much further
in this route and health scope. My bi hanging on
(27:41):
there and in the middle of it of a takeover
place should be interesting anyway, quickly, folks, Delly says, if
my question relates to government health fund loading fee cover
for over thirty one year olds, you all know about that.
If you're over thirty one day, they double get you
if you don't get your cover. So he says it's
(28:01):
often better. You're often better off paying Medicare levy than
the health cover due to expensive loading. So you could
easily be persuaded to buy health cover private insurance cover
if you are older over thirty one. What are your
thoughts on this? Okay? We went to James Gerard, our
friend financial advisor. He says the loading is collected by
the private health insurer and not forwarded to the government.
(28:23):
It's the private health surer keeps the loading correct. There
are several instances where the Medicare levy search charge will
work out better than the hospital coverage under a private
health insurance policy. This signals the actual benefits of the
policy and purely focuses on what is less pain financially,
what is cheaper? Okay? And then James says, as Daney noted,
(28:44):
O the people who are liable for a large surcharge
and people whose income is just over the threshold for
the surcharge may be better off just paying the surcharge.
But if you go down the path of paying the
surcharge and sidestepping a hospital insurance policy and make sure
you have a good public hospital nearby because you never
know when you might need it, what there you are?
James Gerard has covered all potential angles there, but it
(29:05):
is it's something that has come up, and it's something
we're quite acutely aware of. And that's always the answer,
to be honest with you, if you if it's strictly speaking,
if you want to do with the cheapest way, you
know it's quite obvious what to do, but you take
a risk, all right? Now? A question from Keaton where
Jema can come back in? I hope Keaton first name says,
(29:27):
a share I regrettably bought was recently delisted from the
ASX and listed on the NSX. I've never heard of
this exchange. My understanding is I need to sell my
shares to write off the loss against my gains from
selling other more successful shares. What is the easiest way
to do this? Help would be appreciated. Okay, no advice.
(29:50):
We never give you advice. This is information only and
you would never just on the phrasing there. I expect
all the I'm talking to, all the Keatons in the
world need to sell shares to write off the last
against capital gains. You may do so if you wish,
but that would be the theory behind that would be
(30:10):
you do it if you want to do it. All right? Ever,
hear of the NSX gemen. Do you deal with them
at all?
Speaker 2 (30:16):
So, yes, I'm aware of it. We do not offer
the NSX. We do offer tri X. We don't offer
the NX. We offer you off for THEX.
Speaker 1 (30:25):
We should help keeping first of all by telling him,
you know, it's basically it's in an attempt as an
alternative exchange to the AX. There's been several of them.
There are several of them, very very small and not
particularly well known, but.
Speaker 2 (30:38):
Yeah, yeah, still small. If you go to their website,
it'd actually list the brokers that you can use to
trade through them. So Keaton, if you want to go
to their website, you can find out who will be
able to place trades on your behalf through that exchange,
and you can potentially get them to act on your behalf.
Speaker 1 (30:56):
And it's a perfect I mean to make it clear,
it's a perfectly legitimate exchange. Have This is just an
attempt and there have been several attempts. And there are
other exchanges that you mentioned another one X yeah X
c hi dah X you see.
Speaker 2 (31:12):
Now, goodness may I'm out of date now called used
to be called t X. Sorry giving away my age already.
Speaker 1 (31:22):
If you think about the US, you know they've got
different markets, right, we don't talk about you know, they
got the S and P, they got the Dow Jones,
they got the nasdak all in the one country and
there wasn't There's been attempts to try and build and
not to have the AX have a monopoly, which is
not a healthy thing at all. But that's the historical
background there. NSX is a perfectly just useful small exchange
(31:45):
and as Jemma says, just look at their website to
see the brokers they use. And if you then should
desire to sell your shares for whatever reason, including the
fact that they don't seem to have been going very well.
If you say the word regrettably holding them, then you
can just pick one of those brokers, all right. Terrific. Well, Gemma,
what a great time to have you on. We could
(32:05):
talk every day, good market, We could talk every morning
for a while and it would all be really interesting
for our listeners. I thought today was terrific, a really
fresh insight into what's going up, back, going on, back up,
statistically and evidence based, which is what we are all
about here. Okay, thanks very much, Gemma.
Speaker 2 (32:25):
Absolute pleasure. Thank you for having me.
Speaker 1 (32:27):
Great to have you on, as always, great to have
Jemma Daye there of trade, head of investor behavior and
something of a doyen of market inside trading data, which
on days like this or weeks like this, is very
interesting to know. So turns out active investors, independent investors
are actually in their bargain hunting already, folks. We will
(32:49):
see how they get on in the days to come.
We will talk to Sam Wiley later in the week.
Until then, let's have some more correspondence. Great to have
those questions today The Money Puzzle at the Australia dot
Com dot AU. Today's show was produced by the Assema Group.
Talk to you soon, HM,
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