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Podcast: FIRE Away! – Listener Questions Roundup #4

September 21, 2021


In this episode…

We open up the mailbag and answer some of our favourite personal finance and investing questions that have been sent in by listeners.  Hope you enjoy!

 

Listen to the show…

(or download the mp3 file here)

 

Discussion points…

  • What do we think of Ray Dalio and the ‘All-Weather Portfolio’?  (04:16)
  • What if the sharemarket was open 24/7 every single day?  (11:39)
  • Where should one be financially at different ages and income brackets?  (15:44)
  • How would you treat a $100,000 windfall?  (21:00)

Resources and stuff mentioned…

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Check out our other episodes on the FIRE and Chill podcast page.

Thanks for tuning in!  If you enjoyed the show, please share it to help spread the word, or leave a review in your podcast app.

You can also reach out with feedback, questions and topic requests at:  fireandchillpod@gmail.com

Have something to add to this discussion?  Share your thoughts in the comments below…

11 Comments

11 Replies to “Podcast: FIRE Away! – Listener Questions Roundup #4”

  1. Good stuff guys. I like these listener question episodes.

    The ‘where should I be at this stage?’ type question doesnt neccessarily have to be a comparison with other people. It could be just for modelling eg if you follow this path in five years you will have ($$$) and in ten years you will have ($$$$). Rather than ‘you are this much richer or poorer than your peers’.

    Keep up the good work fellas.

    1. Thanks Mr Pennybags 🙂

      That’s true, and it’s really a different question. I think modelling hypotheticals (just some simple saving + investing examples) is a great idea to motivate people of what’s possible without getting wrapped up in comparisons and arbitrary benchmarks.

  2. Hi Dave & Pat,

    good stuff! I noticed in the last two episodes or so that the intro music keeps going at a low volume for a few minutes which is irritating.

    Re all-weather portfolio: bonds can be pretty good when they’re corporate, say Evergrande bonds, which apparently yield more than 8%. ; )

    Cheers!

    1. Haha yeah I’m sure they’re safe 😉

      Oh sorry to hear you don’t like it. I didn’t think it ran for that long – through our Sharesight ad and then fades as we start talking. I’ll check that out and speak to our producer/editor guy.

  3. Hi Dave,

    Not that is relevent to all of us that are pursuing fire, but with the question “What if the stock market was always open?” Another event that could occur is called arbitrage.

    There is an old active trading stratergy which invloves checking the current price of a companies stock when the company is listed in two or more markets. If there is a difference between the prices, you can get a discount on the same stock. This is known as arbitrage. To give an example take Rio Tinto. This is listed on both the London and Australia stock exchange. If the market was always open, in theory an opportunity would exist if the stock in London was trading cheaper than in Australia or vice versa. This could occur due to other market noise betwen countries, timing differences in announcements and the difference between the pound and AUD. The stragery can also be taken further with shorting the stock.

    Historically Royal Ducth Shell was a company that used to have this opportunity regularly. If you are interested you can read about it. Just google Royal Dutch Shell arbitrage.

    1. Interesting stuff mate. But wouldn’t that arbitrage go away if all markets were open 24/7? Since everyone would, again in theory, get the information at the same time? ‘Night shift’ would be watching the news coming out 😉

      An opportunity like this I feel would be quickly exploited away by people watching these things. Even so, I couldn’t be bothered playing such a game, haha!

      1. I believe that arbitrage would increase as the opportunity can only exist if 2 markets are open at the same time.The opportunities are typically only for a short window as you menition, they get found out quckly. Being open 24 would increase the window for this to happen.

        It is a genuine trading strategy and the fact that it exists proves it is possible. Most examples, I have read have been between European and US dual listed. London is 5 hours ahead of NYC. There is a time in the day where both markets are open.

        I did not mention before, but another major factor is the flow of buy and sell orders that are already in the market. Some large hedge funds will place orders at key target prices. As these orders get filled it will casue the price to change in the other market, which helps impove the chances of this happening. It is an interesting topic and there are plenty of articles on google under share arbitrage that explain the inner workings better than I have.

        1. Thanks for the clarification mate. That’s interesting. It’s not something I know anything about, and to be honest, I won’t be going down that particular rabbit hole and instead will keep it simple as SatayKing has alluded to. I’m more than happy to let others pick up these opportunities while I kick back and do nothing 🙂

          1. I do even less than you do, Dave. You track the prices of your share investments whereas I don’t even do that.

  4. “Not that is relevent to all of us that are pursuing fire, but with the question “What if the stock market was always open?” Another event that could occur is called arbitrage.”

    In regard to the above, you could simply buy VGS then you don’t have to care about the markets always being open. If the company is included in the index whatever happens overnight will be incorporated the following day when the ASX is open.

    As to what to do with a six figure windfall, I can say I generally know what my kids did with that level of funds which they received as beneficiaries of a deceased relative’s estate. I don’t know the exact details as I don’t involve myself to that degree in their finance matters but it is more than likely at least one of them who is 26 years of age has more than many who met the preservation requirements of superannuation. I’d hazard a guess they will do quite well provided they do one thing and that thing being absolutely nothing but keep investing no matter what.

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