High Risk vs Low Risk Investments Explained

0:00Sophie Hallwright: I realize it's been a few minutes since you've heard a ZipRecruiter ad, and I know you're probably chomping at the bit to hear another one. So, here goes. Only this one is different. I'm not going to tell you about ZipRecruiter's matching technology or their new feature that connects employers with interested, qualified candidates fast. Instead, on behalf of ZipRecruiter, I'm going to give this time back to you. Do with it what you will. Relish it. Let it really sink in.

0:42Sophie Hallwright: wasn't that nice okay now that you're back if you really want to maybe you could go to ziprecruiter.com zip to try it for free which is the same price as some much needed quiet time again that's ziprecruiter.com zip Hi, I'm Sophie. I'm one of the founders of The Curve, and I went from being in 50k of debt, not understanding investing, knowing how to budget, save. I was a total financial disaster. Now I have two investment properties, over 100k in the stock market, and I'm in no debt. But I did not always used to be this good with money and investing. And it all started from the very beginning of this podcast.

1:24Sophie Hallwright: We're currently on a podcast break, so we're having two weeks off new episodes and we wanted to do some throwbacks to the vintage OG episodes that were released originally five years ago when I knew nothing about investing. If you don't need to go back to these throwback episodes, enjoy two weeks without us in your ears. But if you know anyone who's felt left out of the conversation when it comes to money, investing, or just really don't know where to start, please send them this podcast. We'll be back for regular programming at the start of October. Hello and welcome to another vintage episode.

2:00Sophie Hallwright: This is the fourth Raising the Curve episode that we ever released and this episode is talking about the fundamentals of risk which you might be thinking how boring can we not? But risk is just one of those words that you need to kind of understand but give a new meaning to. I don't know why I hate the word risk but I've always hated it the entire time we've had this podcast. And I think it's because it's the very word that sounds scary and misleading. Because I bet if I'd said to anyone that now understands investing before they understood it, how risky do you want to be with your money? Everyone would say not risky.

2:43Sophie Hallwright: I don't want to be risky. You're joking. I don't want to lose money. But you kind of have to take on a bit of risk to hopefully get the upside, which is getting more money. That is like the essential principle when it comes to risk. You can leave your money in very safe places. You could pull out every single dollar, pound, everything you have to your name. You could hold it in a wallet and hide it under your bed. You could argue that's the safest thing that you could do with your money because it can't go anywhere. But I would actually argue that is the least safe thing that you could do with your money.

3:18Sophie Hallwright: And that's only because now I understand risk. I understand that it's actually so much riskier to not put your money in places that it can grow. I think until I saw brilliant returns, because I was quote unquote risky with my money, I then started to feel so much more comfortable with what the idea of risk was. So when I finally got used to the idea of investing and I took the plunge, I'm quite a risky person, generally. I mean, I would never jump off and do a bungee jump or probably ever jump out of a plane. But in terms of decisions I make with my career, with my personal life, with my money, I'm probably more risky than most people.

3:59Sophie Hallwright: But I think ultimately what everyone needs to understand, especially if you're new to investing, is that risk is not scary. You can't multiply your money, you can't generate revenue, you can't grow what you already have if you don't take on a little bit of risk. So if you are storing all of your money away under the bed, in the mattress, in your wallet, somewhere where you can't lose any, you actually could lose it through inflation. And I know we've mentioned that before. I think in last week's episode, we briefly touched on inflation and what it means and why it's actually quite risky to not invest your money.

4:35Sophie Hallwright: Because it basically means that as the cost of living gets more and more expensive and inflation gets more and more expensive, by not investing your money and not keeping up with inflation, that's, I think, so much riskier. So yes, there's different levels of risk and depending on how old you are and what types of things you want to invest in, it will change where you feel comfortable taking on more risk. For me, I'm 35. I was 30 when we first recorded this episode. I wish I could go back to my younger immediately. Go and just like, don't freak out about this word risk. Don't freak out about the words volatility.

5:15Sophie Hallwright: Understand the idea that risk is reward. And that just basically means, yeah, maybe you're being kind of a little bit risky in finance terms, but you're not really. And there's so many ways that you can be clever and take on risk to hopefully get more money back in the long term, but you can also like mitigate the risk so that you're being really clever and not just throwing caution to the wind. So we've done some like worked examples with numbers so that you can see how much of a return you could generate based on different asset classes that you invest in. We debunk the idea of gambling and is investing gambling.

5:54Sophie Hallwright: It's so funny when we first started the podcast, Vic would get, actually to be honest now, she still gets a bit worked up when people try and compare investing to gambling because it's just not gambling. You can be so measured and so researched and so clever in the way that you invest. It's just not the same as throwing$100 or£100 on black. It is a way to invest in businesses, to take part in the economy and to ensure that you are growing your money in the same way all the finance bros are. So we talk about a couple of examples in this episode, how the different years and time that you invest changes, how you should be thinking about risk and investments.

6:37Sophie Hallwright: We talk about the risk of checking your investments all the time. It's human nature when you're learning something new to want to engage in it and feel like you need to know absolutely everything. You want to check your investments all the time. I was exactly like this when I first started investing. I kept wanting to see what they were doing, but you need to start getting familiar with the idea that it might feel a little bit uncomfortable when you first start investing and seeing money technically on screen go down a bit. So say you invest in something and then you check the next day and it's gone down 5%.

7:13Sophie Hallwright: It hasn't actually gone down 5 % And in real time, you only actually have lost money when you pull the money out of an investment. And when you're new to investing, the inclination is to lean in and want to check all your investments. But actually, it can be just not ideal for the mental health to be seeing things go up and down. Because I know for me, that really sent me in a spiral in my early days of investing. So this episode really is just another reminder of how risk and the stock market works. and how you can generate amazing returns for yourself while also looking after your mental health and not checking your investments every five seconds.

7:54Sophie Hallwright: There is a lot more emotion in investing than you may realize. So as you go through these vintage episodes, I'm sure you'll be reminded of that. Or if you're new here, you'll start to see how intertwined your brain and your mind and your emotions are with investing and money. And then hopefully you can start separating the two. But I'm going to stop yabbering. Sorry, the point of these intros was to not speak too much and get to the episode. but I'm getting very excited. So I'm going to shut up, enjoy the episode, send it to someone that's new to investing or needs to get into it. We want as many women investing and understanding how to grow their wealth as possible.

8:29Sophie Hallwright: So, okay, enough from me. Enjoy the episode.

8:36Sophie Hallwright: Welcome back. How exciting. Yeah. Hi, everyone. Everyone, I hope there's people listening. I know. Hi, one person that's here listening. No, but I must say it does make me feel kind of good to think about there being lots of other people in the classroom learning with me. Today, I love that I'm trying to lead this. What are we talking about today?

8:58Victoria Harris: The last episode, we talked about kind of risk and return and compound interest. But I think those are really fundamental, important things when it comes to investing in finance. I think we should maybe dig a bit deeper into those and, yeah, kind of talk about what is risk. We talk about, oh, risk and return. And what's your risk appetite? And it's like, but what is risk? Can I put a figure on it? Can I quantify it? Is there too much risk? Is there too little risk? And I think the most difficult thing is that it's so subjective and it's so dependent on your situation that there isn't a quantifiable figure for risk.

9:35Victoria Harris: It's not 10 or 20 or 1 % or 2%. It's very much. It's fluid, isn't it? Yeah, and it's a combination of a number of things.

9:44Sophie Hallwright: It would be so awesome if you could do everything you can to minimize the risk to the point where there isn't any, but that's just not the reality of investing, is it?

9:53Victoria Harris: No, and I guess that what everyone's looking for is the investment that is low risk and high return. That's what everyone wants. And in reality, you want to be compensated for the risk that you're taking, and that compensation comes as the return of the investment. so if you're taking a low risk approach to investing say you're investing in term deposits cash which is our cash exactly you're only getting kind of one two percent because you're not taking the risk it's kind of like why should we reward you if you're not going to take the risk it's kind of like your view of risk might be like oh i'm going to cross that bridge because i'm so scared of heights whereas for me i might be like i do that every day that's not risky for me so So it's kind of like a bungee jump.

10:36Victoria Harris: You might love bungee jumping and that's not risky for you. You get the thrill out of it. Whereas for me, like, oh my gosh, I hate bungee jumping. The thought of even standing on the bridge. You know, that kind of, the definition of risk is different for both of us.

10:49Sophie Hallwright: Right. So it's finding and understanding where is your safe zone, what you can afford, how much risk you're willing to take, and that that's going to be different for everyone. Exactly. Exactly.

10:59Victoria Harris: And when we talk about risk with investments, it's the volatility, it's the movement up and down of the sheer price, or the asset class if you're investing in property, it's the move up and down of house prices. It's the uncertainty. It's sitting there going, okay, I'm investing in this investment, and I think it's going to generate 10 % return in 12 months. And it doesn't. At the end of 12 months, it's down 10%, for example. Can you stomach that? It's the unexpected return, I guess, is what risk is. And risk can be positive. By the end of 12 months, that investment could be up 20%. So it's risk.

11:42Victoria Harris: It's kind of either side of what you expect.

11:45Sophie Hallwright: So do you think then a good way to figure out what your risk appetite is would be to think about what's the worst case scenario and would you be okay with that? Yeah, that's a good way of looking at it. But it's hard, though, because you say, you know, it could be 10 % up or 10 % down. But the reality is it could be 100 % down, right?

12:02Victoria Harris: Exactly. And that's the risk associated with investing in shares. And yeah, it's kind of the risk you take for the return. I mean, you could sit on cash and get 1 % in the bank and be quite happy with that. It's kind of like with an entrepreneur. They take a lot of risk. They put themselves on the line when they start businesses. and I can't remember the stats off the top of my head, but it's like 25 % of startups actually survive. Is that how small it is? You see these people time and time again, start a business doesn't succeed, start a business doesn't succeed, and then it's like the fourth or fifth one that does well and the payoff is like at times can be significant.

12:42Victoria Harris: They take risk after risk after risk and, you know, they might be living kind of the bones of their ass for a good couple of years just to get that. That one positive outcome. That one idea, yeah. Those people are very high risk. And then there's other people that are like, hey, I'm very comfortable in my job, getting my salary, getting that every month and just living paycheck to paycheck, being a bit more comfortable in my lifestyle. Some people like the thrill and want to take a bit more risk, even though the payoff might be negative 10, negative 20, negative 30. It also could be plus 10, plus 20, plus 10.

13:14Victoria Harris: It could be quite significant. It's frustrating when people say that investing is like gambling because I don't think it is. you're researching. It's an educated decision. It is. And you're looking at the current situation, the current environment. And yeah, okay, there's a lot of investors out there that take a punt or do treat investing like gambling. But I think if you do your research and you find a good business and you want to invest in it, then that's not gambling. You're actually taking the time and energy to make a decision that you think will benefit you in the long term.

13:42Sophie Hallwright: I love the way that you explain that in terms of different people's lifestyles, because it's like a continuum, isn't it? There's some people who will be the riskiest investors and then there's some people that will be the safest investors and it's just figuring out where you are.

13:56Victoria Harris: And we do say if you've got a longer time horizon, collectively, those people can take more risk, but some of those people might not want to. People like our age in their 30s who aren't retiring until or maybe don't need the investment for 10, 20 years, they can take more risk, but they might not want to. And that's fine. It's totally up to them. But the age old saying is, if you're younger, you've got a longer time horizon. If you need your money in the next 12 months or even two years, I would say would be considered short term, in my opinion, then maybe the share market's not for you because you, or maybe you should look at an alternative asset class that's a bit of a bit lower risk if you need those funds within the short term.

14:39Sophie Hallwright: So I'm nearly 30, don't have any kids, house, etc. etc how would I figure out where I fit on that continuum where how would I know or try and figure

14:50Victoria Harris: out what level of risk I'm comfortable with yeah it's frustrating because like I said there's no definitive answer and it's totally subjective but I kind of come back to I guess three three points that I would think about when it comes to risk firstly know what you can afford to lose so kind of ask yourself what would happen if you lost some or all of the money that you're putting into these investments? You know, would you still be able to have a lifestyle you have? Would you be comfortable with that? And it's just finding out, you know, what you can afford to lose. The second one would be, what are your goals and your timings?

15:25Victoria Harris: Do you need this money in 12 months, in two years, or in 10, 20 years? What dollar amount does that look like to you? And be realistic here. Don't be like, I want a million dollars in five years' time. Hey, but if you do, you're going to have to take a lot of risk to do that. So it's kind of that time horizon and what that goal looks like for you. For example, say you wanted to buy a house in five years' time and you needed a$100 ,000 deposit and you wanted to put in$50 ,000 now as an investment and you wanted to get that to$100 ,000 in five years' time. So you want to double your money. Then you're kind of looking at around 15 % return per annum on average over that five-year period.

16:06Victoria Harris: So you might have years where it's up 20 and you might have years where it's down 10. But overall, the average of doubling your money in five years is 15 % return per year. Is that even realistic? I have no idea. Well, that's the thing. In order to get that 15%, you'd need to take a bit of risk. And so it's just kind of understanding what your goals and your timings are. And then the third point I would say is what we touched on with the bungee jumping analogy is you need to understand what your personal risk attitude is. So knowing what you can afford to lose, knowing what your goals and your timings are, and then also what your personal risk attitude is.

16:42Victoria Harris: So are you a risk seeker or do you not like risk at all? Then that's, I guess, the best way to think about your risk.

16:49Sophie Hallwright: So can we go back to that example you said of, say a couple has$100 ,000 and they've got$50 ,000 that they're willing to invest to try and double that, as you said, in five years time. Yeah. Is there a way that they can calculate the amount of risk they need to be taking to achieve that?

17:07Victoria Harris: If you're going to invest in a fund, then a lot of the fund managers out there have a risk calculator and it asks you a whole lot of questions and will lump you into a category of which fund to invest in, whether it's a high growth aggressive fund or if it's a cash or like low risk conservative fund. But, you know, no returns are guaranteed either. So it's not like you can say, coming back to that example of you want to get 15 % return to double your money, there's no investment that can guarantee you that. It's the non-guarantee that creates the risk, if that makes sense. If everyone knew what the market was going to do for the next five years, then all those returns would be eaten away because everyone would be investing.

17:49Victoria Harris: So it's difficult and it's frustrating that I can't give you the definitive answer, but the risk is the volatility or the uncertainty of the investment that you're making. That's the thing with the market. It's so fluid and there's always uncertainties out there. So you never know what you're going to get in terms of the outcome. Nobody knows what the market's going to do tomorrow. Even some people say they do, but they don't. So it's risky business out there, isn't it? Yeah. And I guess another way to look at it is don't just look at return. Look at the risk associated with that return. If someone comes up to you and they're like, oh my gosh, I just made 100 % on this investment in the last two days.

18:30Victoria Harris: It's like, okay, well done you, but the risk associated with that is so high. And personally, I think that is more luck than skill. You've invested in something, you've had a quick win. That's not investing and that's not sustainable. Investing in a quality company like Microsoft, for example. I love Microsoft.

18:49Sophie Hallwright: Is that a hot tip if you're investing in Microsoft?

18:52Victoria Harris: No, we don't give advice on this podcast. Sorry. Microsoft, for example, that business has generated about 35 % return per year for the last five years. Wow. So that is more than doubled. Yeah, you've kind of got to look at what quality businesses are out there that you think can double in the next five years. And therefore, you'd invest in that and hopefully your$50 ,000 would turn into$100 ,000.

19:17Sophie Hallwright: But how is that risky if you can already see that that's what's happening? Do you know what I mean? But you can't. Right.

19:23Victoria Harris: That's the thing. It's all a prediction and what you think. Based on what they've done, but not necessarily guaranteeing it. Yeah, and I mean, we'll touch on it maybe in a few episodes' time around how to find these ideas and then how to pick a winning investment to almost reduce your risk in order to invest in something that will grow over the long term.

19:43Sophie Hallwright: It's so hard because I wish I could just draw your brain and put it in mine for a moment because I think all this stuff seems so natural to you. if you just threw a dart at a dartboard,

19:54Victoria Harris: the likelihood of you hitting the bullseye, it depends how good you are at darts, which I'm terrible, is pretty low. If you could practice and practice and practice and practice, then the likelihood you get closer to that bullseye. So that kind of comes back to investing in, I'm not saying investing is like throwing darts at a dartboard. I'm saying that if you put your time and effort into something, into a skill, the more you do it and the more practice you have, you start to reduce the mistakes that you're going to make and reduce the, hopefully, the poor investment decisions.

20:30Sophie Hallwright: So you stop hitting the wall and actually get on the wall.

20:34Victoria Harris: Yeah, you stop hitting the wall and you get closer to the bullseye. And I think with investing, it's very much about doing and learning by doing, which when you first start out could mean losing money. But hopefully in the end, you'll start to realize, okay, why has that investment done well and why has that one not? and you'll start to eventually kind of move up the curve in terms of investing in what works, what succeeds and therefore what gets you a good return and gets you to that doubling of your money in five years. Yeah, it's kind of frustrating because risk is never an easy thing to understand or an easy thing to define.

21:10Victoria Harris: But it's just really important to look at when you're looking at the return. Back in the global financial crisis and we had a lot of finance companies collapsing in New Zealand and I watched Wolf of Wall Street last night and they get these stockbrokers that are on the phone saying, back in the cowboy days, and they would be like, you're going to get this huge return on your investment and it's just knowing like, okay, but what risk am I taking with that?

21:36Sophie Hallwright: But when you say what risk am I taking with that, is that you saying, okay, but what's the worst case scenario?

21:41Victoria Harris: Yes, it's also knowing what questions to ask. I guess if you're investing in the likes of a term deposit, it's pretty much a guaranteed return in that it's a fixed period of time. And you know the bank said they're going to deliver kind of say 1.2 % over that six month, 12 month period, whatever it is. So that's low risk because there's low uncertainty. There's low volatility. Because you're told what you're getting. You're told what you're going to get. Exactly. And similar to a bond. A little bit more risk, but it's a set period of time. the bond you're buying off that company has told you you're going to get 2-3 % for a fixed period of time.

22:16Sophie Hallwright: And it's a reputable company. It's somewhere where it's low risk because it's already successful. They're not going to use that money in a crazy way.

22:24Victoria Harris: Exactly. So if you look at your time horizon, coming back to the term deposit example, you look at your time horizon, you know, okay, in 12 months time, I'm going to get 1.2%, for example, at the end of that 12 month period. When it comes to investing in shares, though, there's more uncertainty because you don't know what that end share price is going to be. Because you don't know and because there's a much more uncertainty and possibly volatility in the share price, your expected return is unknown. You might look at previously what the share price has done, but that doesn't give you an indication of what it's going to do in the future.

22:58Victoria Harris: You're buying that share on the premise that it might do 10%, but it might do negative 10%. And I think that movement away from what you expect is risk. So if I could draw a graph, for example, I'd have in the corner zero, and then your term deposit would be a very low but straight line over a time period. And so we have time on the horizontal axis and return on the... Vic's doing it with her hands, and we're just assuming everyone knows what she's talking about. So you've got return on the vertical, time on the horizontal. Term deposit would be a very low but straight and steady line. And shares, for example, or equities, investing in the stock market, whatever you want to call it, would be kind of an up and down, up and down, up and down.

23:50Victoria Harris: But at the end of the same time period, you'd be at a much higher rate. But not necessarily though, right? Not necessarily, but that's why we say long term. because markets move up and down. And generally over the long term, say plus five years, because you're taking more risk, you will hopefully, and don't hold me to this, but hopefully because you're taking more risk, you're going to get a higher overall return in the long run. It's a really good way to explain it. I think, yeah, thank you.

24:21Sophie Hallwright: I'm finally sort of on the same page. That'd be a lot easier to explain. So when you say in terms of a long term, I know you've just used five years as an example, but are we talking 20 years, two years? Like what is a long term perspective?

24:37Victoria Harris: In my opinion, short term is anything less than two years. Medium term would be two to five-ish, maybe two to ten. Long term would be five plus. I mean, even that's a bit too short, to be honest. Five years in the scheme of things is pretty short. So anything kind of beyond five years would be mid to long term investment. And, you know, when you talk to fund managers in the market, they always say five years is kind of an industry stock standard of an investment time horizon. And that's just because the market moves up and down. A risk is a movement away of your expectation. The term deposit, you know what you're expected to get.

25:13Victoria Harris: With a share, you don't. It's a movement away from your expected return.

25:17Sophie Hallwright: It's also, I think, it so goes against everything that you learn when you're growing up in terms of you're stepping into the unknown. And that is what's scary. And that is what is the risk, right? And that's why some people just hate investing in shares.

25:30Victoria Harris: Too much anxiety, not having a known answer. Yeah. And that's fine as well. It also comes back to that argument of what is your level of fear or what is your fear factor and what is your kind of risk appetite?

25:42Sophie Hallwright: Where can you sit without biting all your nails off? Exactly. And being just like an anxious mess. And where's like a comfortable level of risk.

25:50Victoria Harris: Also realizing, I mean, I keep coming back to COVID because it's such a relevant example, is, you know, if you'd invested, say, at the beginning of last year, beginning of 2020, at, say,$100, and then the market fell like 30%. percent and the ability to sit there and go hey that's fine I'm taking a long-term view I'm not going to freak out and take my money out because when the market falls 30 percent and say your investments fall in 30 percent that's only on the screen it's only on the paper as soon as you actually cash out and sell that that's when you have crystallized that loss and now you've only got 70 so it's the ability to sit there and go hey I've only just started my investing journey I said I'd give it five years and you know now the market's kind of way above levels of the beginning of last year so if you had taken out your money you'd be in much worse financial position than if you just sat there and gone hey that's fine yeah I gave myself five years it's only been 12 months and yeah hopefully another four years time your investment will be a lot higher than a hundred dollars.

26:57Sophie Hallwright: It's actually kind of cool to think about it like that because you know when you're in a shit time in your life or something's not going very well and everyone's like hang in there it's gonna get better you know whether it's a breakup or it's your job or anything there's that fear of the uncomfortable stage of anything right and also then not knowing how things are going to work out but it comes back to that patience and patience

27:20Victoria Harris: is a big one yeah patience is a big one and it can work in the other way like if you have that $100 investment and it doubles. And the number of people that sit there and go, yeah, I've made 100%. That's just on paper. You haven't actually cashed out and crystallized and solidified that gain. You could wake up tomorrow and it's down to$70 a year. That's why I always tell people, don't look at your investment every day because A, it'd be super distracting. And B, you give yourself that goal and that time horizon for a reason. Stick to it and make sure that you're not checking your investment every day.

27:54Victoria Harris: But also on the flip side of that, it's not a countdown to that period of time. Coming back to the previous example, say we've started investing at the beginning of 2020. We're now 12 months in and we've now got four years. So maybe do we kind of change to a lower risk investment that might be moving between asset classes? It might be allocating a bit more to cash than I had in my shares. So it's a rolling countdown. So say we've got 12 months left of our investment time horizon. maybe we move into a little bit more of a lower risk investment because we've only got 12 months now not five years so it's kind of assessing your own risk appetite and your goals and your timings and so looking at it as this kind of a countdown not as a fixed period of it's a moving goal post yeah it is but it's also not not taking your money out say every year it's more saying if you're going to invest more okay now i've only got 12 months maybe i'll invest in a lower risk it's not taking your money out every year and reassessing it's more just saying if I'm going to invest now and my time horizon is now less it's now only 12 months whereas four years ago I was

28:59Sophie Hallwright: doing much higher risk because I've got a longer time horizon every time I try and talk to what you've said I feel like I sound stupid but this is what I'm picking up on it's like you don't celebrate or cry over the losses or the wins as you're going along so until you cash out that's where you end up it's not that along the way you need to be like oh we've gone five percent here and oh my God, I've lost 10. It's actually just knowing that it's just a waste of time and energy.

29:23Victoria Harris: And so emotional. Like imagine checking investment, I don't know, say every couple of months. You're like, oh my God, I'm up 10, I'm down 10. Emotional rollercoaster. Yeah, that's exhausting. It's kind of putting it away, checking it periodically, which could be every six months, for example, or if something changes in your situation. That's a really hard thing that I've had to learn in my job because I do look at investments every single day and there's days when things I invest in for clients are down 10-20 % and you kind of have to look at it objectively and go, okay, don't get caught up in the emotion.

29:57Victoria Harris: Today's a new day I'm investing. Everyone always makes mistakes and sounds like a cliche but that's when you learn the most about yourself and about your investing strategy and you say, okay, what did I miss? Why did that investment not go the way I thought it would? And that's when you incrementally become a better investor because you start to learn what works, what doesn't, and what am I missing, and what should I be considering for the next investment. So taking a positive view, but also, yeah, like you said, not celebrating your winnings.

30:27Sophie Hallwright: Ouch, it hurts though, doesn't it? Oh, totally.

30:29Victoria Harris: It's a hard way to learn. And it's taken me a while, definitely, to learn, and especially when it's clients' money and you're kind of sitting there going, oh my gosh. But as long as you've got more winners than losers, then you'll be fine. Okay. So when you're investing, your time horizon is so crucial. And yeah, if you want a quick win, go to the casino, not the share market. I hate the casino. You'll never see me at a casino. The long nails freak me out. And if you have the capacity to hold your investment for kind of five or ten years, then what happens next week or next month doesn't really matter in the scheme of things.

31:01Victoria Harris: And don't get too hung up on it. I think we might have to talk about diversification in the next episode. Yes, I think diversification is a whole nother can of worms. We should save that for an episode itself because it's really important to understand why diversification when it comes to your investing life and your investing journey is so, so important.

31:20Sophie Hallwright: And this is the eggs in one basket, isn't it?

31:22Victoria Harris: Yeah.

31:23Sophie Hallwright: All right, cool. Diversification. It's quite a funky word. I'm hoping I can use it more actually knowing what it means. So diversification next time.

31:31Victoria Harris: Cool. Thanks everyone for listening. Thank you so much for listening to Raising the Curve. These conversations are designed to teach you everything you need to know to be better with your money, from saving to investing to talking with your friends about your salaries, all of that stuff.

31:43Sophie Hallwright: And if you like what you heard, we would love if you could please hit subscribe wherever you're listening and leave a comment, let us know what you thought about the episode.

31:49Victoria Harris: And it only takes one second and it would really make our week, our month, our year.

31:54Sophie Hallwright: Yeah. Yeah.

31:55Victoria Harris: So please do it. Okay. Love you. Bye.

32:00Sophie Hallwright: Okay, quickly. the Curve was created to empower and educate you about investing, but we are not financial advisors.

32:06Victoria Harris: Our platform exists for educational purposes only, and it doesn't provide personalized investing advice for your individual needs and should not be relied upon to make an investment or financial decision.

32:15Sophie Hallwright: And always remember to do your own research before making any investment or financial decision. We're here for any knowledge and support you need, but the final call is always yours. And thanks for being here. You got this. Yeah, we know you got this. Sometimes flavors

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