Coffee with Karl Episode 3: Investments - Jon Grant

Coffee with Karl Episode 3: Investments - Jon Grant

Transcript below:

KB: Welcome back everyone, I’m here with Jon Grant, Managing Director of World Assets, a good friend of mine and he's here to talk about investments. So just straight into it, you run a fairly niche investment business Jon. Financial planners do lots of different things holistically, retirement planning, education planning, savings plans etc, but you specialise in one particular area. Do you want to talk us through what you do and a little bit about yourself?

JG: Sure, thanks for having me. I’ve been in the industry a good 17 years now, it’s flown by actually. Over that time I think I've found out I like to specialise more in what I like to give advice on, which is the investment side of things. Advisers can advise on insurance or debt reduction, retirement planning, social security... there's many different ways in which advisors can help individuals. In my case, over the past seven or eight years I've been doing a bit more with asset allocation and investments, so that's where I'm at at the moment and that's where I get a lot of enjoyment and job satisfaction from.

KB: Excellent, so heavily into direct shares…

JG: Yeah direct shares is one part of the asset allocation, I think it's very important to have a good rounded approach of diversification across all assets, that's crucial, and I think a lot of clients can get fixated on one asset and maybe that's out of a level of comfort or maybe that's just all they know.. but I think these days with the world changing, a lower rate of growth and interest rates being so low for so long, you really do have to diversify and look at alternatives rather than just the single asset class. So, you may need to get advice from a financial adviser Karl.

KB: So, just a quick one mate, your thoughts on the market in general? Broad question!

JG:  Well that's a loaded question and that's not a quick and easy answer.

KB: There’s a president in America that’s impacting this…

JG: Yeah Trump, wow. Yeah he's had a lot to say about markets. He has said some interesting things about the markets being overvalued, that's probably one of the few things I've agreed with actually, with president Trump, yeah I think it's in most developed countries with all the weight of stimulus money packages coming into markets. It really has created a bit of a bubble in many share markets so at the moment, again, it's important to diversify, seek professional help and guidance and advice in laying out a plan so you can have a rounded approach so that if you're in one asset class and it does have a pullback or a crash in a sense, that you're not going to be greatly impacted. I think it's diversification that’s the key here.

KB: You mentioned before that you’ve been in the industry for 17 years, you would have seen a lot in that time. What would you say the biggest mistakes are that are made by investors?

JG: I think the number one thing is maybe starting planning too late for retirement. I think that a lot of people just leave it to the twilight years when you’re thinking about retirement and that could be too late to do that. So I think having a plan and starting as early as possible, that would be one of the best pieces of advice I could pass on. In addition to that is again what I've been saying, diversification, not having it all just resting in one property or all in the Australian share market but a combination of both could be suitable if it's obtainable. That's what I would suggest.

Some common mistakes are lack of diversification, jumping in to share markets for fear of missing out, so following the momentum and the herd. That can obviously get you unstuck as we have seen in the GFC back in 08, it was high volumes going to share markets, right at its peak before it fell over, so again diversification and having a plan.

KB: Excellent. Okay, a quick question that I get asked all the time, so it's good to handball it onto you… Property versus shares. Is there such a thing as versus shares? Should it be thought of that way?

JG: No, I don’t think so. I think again, it's all what you're comfortable with, I mean it has to be suitable to your level of risk, but also you'd have to have a fair amount of interest or knowledge in what you're doing. So a lot of people can go and continue the love affair with residential property but also I think there's a place for really ramping up your superannuation and contributing like a savings plan into super so that that is perhaps complementing a property outside of super. I mean you can own property inside super these days but I prefer to have that outside of super, there's tax benefits, and I prefer to have my shares or clients shares inside superannuation, there's a lot of tax benefits with the Australian tax system and franking credits that can really boost your returns with your yield anyway inside super for shares. I don't think it's one versus the other at all, I think it's definitely a combination of both.

KB: Excellent. Key word of today is diversification.

JG: Yes it is! That’s right.

KB: I should also say that this is all just general discussions, general advice only. Definitely seek professional advice around your own circumstances.

JG: Hopefully there’s a disclaimer.

KB: This is the disclaimer! Really quality stuff though mate so thank you. Finally, what's the best piece of financial advice you've ever been given? I ask all of my guests, all three of them now!

JG: Yes…best piece of financial advice? Well there was one wise old owl that I used to work with many, many years ago and the advice is stuck in my head, Karl you may have heard me say this before, it’s “how you start is how you finish”. I just think that applies to a lot of different things and definitely to financial planning and retirement. I mean, you really need the plan, and that's the other one “you fail to plan, you plan to fail”. It ties in with that so I think you need to start with the plan and you should get to your end goals in retirement. That’s made sense with me for many years and not just in financial but also in other parts of family and personal life as well.

KB: Excellent, yeah that's an interesting one mate. Couldn’t agree more. Australians have definitely got a “she'll be right” attitude in a lot of cases, so the earlier we can start and have some sort of roadmap the better I think. So thanks Jon, thanks for your time today.

JG: No problem, happy to be here. Thanks for the coffee.

KB: Pleasure!


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