Lisa Dudson – the calm in the financial storm

Middlicious Musings
Middlicious Musings
Lisa Dudson - the calm in the financial storm

Today Niki interviews Lisa Dudson from Acumen. Lisa is a financial adviser and today Niki and her discuss the crashing markets during the CoVid 19 crisis. An important point is this podcast was recorded before it was announced NZ would go into a 4 week lockdown.

1:36: Niki asks Lisa why share markets do this. Lisa talks about people get fearful which then creates panic. They get a hint of the market dropping so they sell hence the market drop. In this instance it has been replicated globally -.

2:41: Niki asks about the impact on companies like Air New Zealand who had announced today that they were stopping all international travel and laying off 3500 staff. Lisa goes onto say some companies will be deeply affected particularly those in the tourism and travel industries. She also goes onto say that people will stop spending because of fear around an income drop which will impact on businesses.

4:22: Kiwisaver? People being nervous about going into shares because of exactly what has happened. So if my Kiwisaver has been slammed and taken a large drop in value what should I do? NOTHING is Lisa’s mantra. If you change your fund from a more aggressive fund to a less aggressive you have not only locked in the losses, you are also missing the opportunity for rebound. The positive thing is because Kiwisaver is being contributed to automatically and consistently you will be buying more for you money.

6:20: Niki poses the question if there are opportunities for people with cash to buy cheap shares? Lisa goes onto say there is however reiterates that this is not the time to panic. Most people, if they look at their share portfolio’s performance over the last 12 months, they have only lost their gains.

8:13: Stop looking at your portfolio. Niki asks about the old adage ‘Buy low, sell high’ which people often ignore. Lisa points out that shares need to be a 10 year+ investment- No-one knows how to time the market. She also discusses the importance of diverseification.

9:56: Niki takes Lisa back to the question if I have cash what should I buy? Lisa talks about the overall picture. Where are you at now? Where do you want to be in the future? What is the timeframe you are working with and what is your appetite for risk. Then a portfolio can be developed based on that. What products best fit you.

12:49 – Take the time to assess what you can handle. It is an important part of the process and if you cannot handle big ups and downs then an aggressive portfolio is not for you.

13:12 – Niki asks about the rule she has heard around protecting your Kiwisaver. If you are 1-2 years away from needing it for a house deposit then changing your fund to a less aggressive one. Lisa’s says this is imperative however goes on to say that you do not need to withdraw all you Kiwisaver funds at retirement – you can have it their still working for you.

13:49: Niki poses the questions about retirees or midlifers who have seen their next egg got slammed. Lisa talks about the lack of need to do anything. It is a waiting game and unless you need all of you money, just let it sit and recover.

15:30: Lisa talks about asking the question what do I have control of and what can I do? She goes onto discuss the importance of maintaining health and watching your spending. Think about being proactive with your spending and, more importantly, your saving.

16:48: A discussion around the importance of having an emergency fund. 3-6 months of living expenses set aside for emergencies. The discussion goes on to how people get complacent during good times. They don’t take the lessons from hard times and maintain them consistently. Lisa encourages people to ask themselves am I being smart with my money? Am I doing what I can to maintain my health? Am I happy?

18:51: Property – will the crash affect property and if so how? Lisa goes on to say it possibly will in 2 ways. 1) It will slow the market down probably so properties, particularly the high end properties, will take longer to sell 2) Mortgage rates will drop so people will get cheaper money. Niki goes on to ask whether people should weigh up breaking their current mortgage to refinance at a better rate. Lisa expresses the importance of taking advice over this.

23:14: What about investment properties in Air BNB? Lisa once again expresses the need to sit and ask some questions – can I manage a few months potentially without income or with reduced income? If not do I need to consider changing to long-term rental. She also reiterates the importance of asking all these questions before you go into an investment property.

27:49: Lisa summaries what was said during the podcast. The importance of getting facts and not buying into what the media are saying. And also the importance of getting professional advice.

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