Howdy team!
Just in case, like me, you came back to the office this week (and to your brokerage account — I nearly forgot my log-in information!) and didn’t realise the stock market has… rocketed:
🇦🇺 The ASX 200 is up 7% for January 2023!
🇺🇸 The S&P 500 is up 5%!
🇬🇧 The FTSE 100 is up 3%!
🏦 Even our boring Aussie bond ETF — IAF — is up 2.4%!
đź‡đź‡° Heck, the Hang Seng is up a further 8.3%.
Not to generously butter my own bread here… but it’s safe to say I’m ecstatic we moved more of the Rask Core portfolios away from cash and back into VBND (up 1.9% this month), IAF and SUBD…
[Mic drop]
(And yes, I’m getting ahead of myself — one month of returns is random noise in the scheme of my 20-year-plus time horizon.)
You can catch up on all of the changes I made in December by clicking here.
The best time to invest is…
Late last year, depending on which Rask channel you tune into, chances are, you would have heard me say something to the effect of, “this is probably the best time I’ve ever had in my career to be a long-term investor.”
I stand by that.
Why?
Well, let’s think about it…
Interest rates are up (and probably not going to go much higher). That’s great for retirees and those with a lower risk profile who finally get some juicy interest on a term deposit or savings.
It’s also great for bonds — because if interest rates hold steady, or slowly begin to fall, that’ll be good news for our IAF and VBND ETFs, since it leads to higher bond ETF prices and more income for a few years.
Stocks are yielding more!
Specifically, the stock market ‘looks forward’. Meaning, in 2022 heaps of stocks — especially poor quality “growth” stocks — were smashed because a rough 2023 was coming for them.
However, some great companies (and ETFs) have been thrown out with the bathwater.
The good news is they’re still great companies — for the long run (10+ years).
But the best part is, they’re cheaper!
Another way to think of it is like this: lower prices = good for buyers = more bang for your buck = high yielding investments (over time).
But, Owen, isn’t the stock market going to fall?
Maybe.
Just like every single person in finance (or not in finance), I have no idea of what exactly the stock market will do in 2023.
But if I were to guess, the stock market will probably average returns of 4-10% per year over the next 10 years. That’s in-line with historical averages, and means it’ll most likely still be the best place to invest.
But here’s the rub…
Since I began my investing career (2013) I’ve been asked/told the stock market is going to fall an endless number of times.
And it sounds smart because it’s very hard to counter.
The best way I’ve found to ‘actually…’ these people is to subtly remind them that:
a. The Aussie stock market has been the best-performing asset class for 100+ years.
b. Over the 52 years since Vanguard has been tracking it, Aussie stocks have returned 9.5% per year on average (the US has been better), and…
c. No-one can predict what happens every year, so why bother? Just invest in great assets and hold on.
A look behind my curtain
Over the Chrissy break, like most people, I took an opportunity to think about my personal finances and investment plan.
Here’s what I came up with:
1. I’m going to go on the offensive. In every way I can possibly think of (sensibly):
a) I’m going to expand my business and reinvest aggressively for growth. While all of Rask’s competitors are worried about growth or cutting budgets, I’m going to capitalise on our recent growth and invest in a big way.
Taking advantage of the weakness my competitors might face is most effective in the bad times. You can expect BIG news from Rask in 2023 — we’re going to help you invest, learn and grow more in 2023 than any other year since we started.
b) I’m going to accelerate my plan to invest in more property. I hadn’t been looking at buying or investing in property until late last year when it dawned on me (read: ‘smacked me in the face’): there are going to be a LOT of distressed sellers in 2023.
The mortgage cliff is real and lots of people have over-extended themselves in property.
I feel sorry for anyone who is in this situation — but I’m not going to miss an opportunity to buy another great property. So, I’m going to save rapidly and be ready to pounce on an investment grade property — if one comes up.
Don’t know how to start in property? I reckon our 5-part property investor podcast mini-series with Chris Bates is one of the best resources on the internet. If you want the basics covered, take our free (for you) property 101 course on Rask Education. Chris, Amy Lunardi (one of the best buyer’s agents) and I put it together for free.
⚠️ WARNING: What’s right for me is not necessarily right for you. But if you are considering buying a property can you please — please — try to avoid the most common property stuff-ups, like buying off the plan, borrowing the maximum amount (when you don’t need to), thinking that an apartment will grow as fast as a property, sacrificing quality when waiting and saving for a better property is smart, and so on. These aren’t always bad decisions — provided you know the risks, but I see them all the time.
c) I’m going to invest everything I possibly can in an appropriate growth-focused ETF and stock portfolio.
My chosen Rask Core ETF portfolio is Jupiter (90% growth). I chose that because I’m comfortable taking lots of risk, have a strong and stable income, and have an exceptionally long investment runway.
Again, my strategy is NOT your strategy. So consider your own circumstances, risk profile, time horizon, or speak to a financial adviser before doing anything.
In 2023, I’m going to scrimp, save and hustle to rapidly accumulate as much capital as I can to invest for the long run.
No more mucking around.
2023 is my year to earn, save and invest at the fastest possible rate.
Of course, I’ll keep you posted via Rask Core (new stock ideas are coming), Rask podcasts (especially the Australian Investors Podcast on Saturdays) and Live shows for Selfwealth, Rask events, the Australian Shareholders Association (ASA) and… [to be revealed].
2. My personal finances are going to be rock solid.
I’ll continue to avoid silly debts for stuff I don’t need. Car loans are terrible. Payday loans, no thanks. BNPL, not for me.
I’m fortunate because I’ve never had a credit card and have been debt-free (besides my mortgage) for 5+ years.
Being debt-free and cash flow rich is exactly what I look for in the companies I invest in, and it just so happens to be the ultimate way to give yourself a huge amount of optionality.
Being debt free and cashed up lets you invest when you want to. Go on that trip with friends or family. Spontaneous dinners at Chin Chin. Change careers with confidence. You name it.
If you’ve got a car sitting around doing bugger all, sell it. Search your shed or the attic for extra ‘stuff’ and sell it on Facebook Marketplace. Negotiate your mortgage down ASAP by giving them a call and threatening to switch (even if you don’t).
Get yourself cashed up ASAP and be ready to go on the offensive.
Got a headache with debt?
As a Rask supporter, you have unlimited access to 15+ Rask courses via your Rask Account — including our ‘Getting and Staying Out of Debt course‘ on Rask Education.
3. I’m going to reduce, reuse and recycle.
Finally, over summer I was looking for ways to reduce my impact on the world — without blowing up my lifestyle — and I came across the United Nation’s “Lazy Person’s Guide to Saving the World“.
I realised I was already doing a lot of it. I’m probably at levels 3 and 4.
Chances are you are like me and already doing a lot more than you think. But why not take a quick look at the guide and see if you can pick up one or two extra things in 2023?
(A big benefit of the 3Rs of sustainability is that you’ll also save a bucket load of money. But the biggest benefit is the good feeling of helping others.)
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Thanks again for your support and for being part of our community.
I’m gearing up for a massive 2023. Not just inside Rask Core but across the entire Rask ecosystem. We’re currently running at 4,391 members (most of us are “lifers”), with more joining every month; we just enrolled our 19,506th student on Rask Education, on our way to 100,000 before 2025, and January 2023 is our biggest-ever month for podcast listeners — 130,000 listeners and on our way to half a million listens.
Are you freakin’ serious?!
Onward & upward.
Owen “Rask” Raszkiewicz
Founder, Rask
P.S. Please note: This email address is unattended, so it’s best to send all of your messages to me directly via the community, on Twitter or by using the Contact Us page on the Rask website.
P.P.S. here are some of the INCREDIBLE conversations we’ve published recently:
How to change the world, with Nick Crocker (Australian Business Podcast)
The first $100k, mental health and money, with Glen James (Australian Investors Podcast)
3 dividend income stocks for 2023, with Drew Meredith (Australian Finance Podcast)
2 budgeting strategies to supercharge your finances, with Monique Pizzica (Australian Finance Podcast)
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Disclosure: The Rask Group owns units in IAF, VAS, GOLD, IVV, IHVV, AAA and HBRD.
