Money Talks with Grégory Guilmin

00:00:04: Hey Luxembourg, let's talk about something that really matters.

00:00:07: Your money and your future!

00:00:10: Welcome

00:00:10: to Money Talks the podcast that brings you honest chats with familiar faces from Luxemburg.

00:00:18: You'll hear stories of big decisions in life or personal finances.

00:00:22: No jargon no fluff just conversations which

00:00:25: make sense And get you thinking on

00:00:28: how to reach

00:00:28: them.

00:00:29: This podcast is

00:00:30: brought by Alfie.

00:00:34: Hello everyone, today's guest is someone who has made financial education his mission.

00:00:39: Gregory Guilman is a financial educator and author from Belgium Who helps people understand investing in very practical way?

00:00:49: What I find interesting about his work Is that he speaks to both children And adults.

00:00:54: Gregory welcome to Money Talks.

00:00:56: Thank you Miahela.

00:00:58: To start with, can you briefly tell us about your background and how come you've settled for financial education?

00:01:03: You actually even hold a PhD in finance.

00:01:06: Yes indeed!

00:01:07: First of all thank you Miahela for having me on this podcast.

00:01:13: Before doing financial education, I've worked for almost ten years in the financial industry.

00:01:19: Between two thousand twelve and two thousand fifteen... ...I was working in Brussels in an insurance company And end of twenty-fifteen i go to Luxembourg To work at a multi family office And six years ago more or less uh.. I say okay!

00:01:38: I like working in the finance industry But I want to help people understand more what is the financial market and to become autonomous.

00:01:49: And now I do a lot of financial education on social media, but also i have a weekly newsletter that is called Le Tutor de Gregg where I share each week some practical advice on how to invest in the stock market or be aware of financial scam and all this stuff.

00:02:13: So it's been six years.

00:02:14: you are an independent?

00:02:16: Yes Only activity.

00:02:18: Yeah,

00:02:18: it's my.

00:02:19: usually people say okay Are you unable perhaps to earn money with financial education?

00:02:25: So You need to have a job Aside?

00:02:28: in fact not really.

00:02:30: I've also written A book to help people To understand the stock market and all to invest the stock Market but also small Activity books for children between five and ten years old.

00:02:42: What connects these two worlds, children and adults in your view?

00:02:46: Is it parents' and their children or do you also go to schools.

00:02:49: During the summer of twenty-four I was bicycling thinking about one sentence that my children told me that is very nice because you can pay everything with your cart.

00:03:08: Some toys, some we go and travel etc... And in fact at the time I understand they are not able to put value on something simply because I only pay with scant or with my smartphone.

00:03:29: so reason why i decided to say okay when gaspar will be a six you'll have as a present, an activity book.

00:03:37: If you allow me I would say that we are happy to have some copies of the Activity Books You Are Talking About at The Schulfahrer Alfie's Having A Stand and so kids from Luxembourg can also play with it.

00:03:49: your book is available in several languages.

00:03:51: Yeah yeah!

00:03:52: In four languages now... Dutch English French Spanish Perhaps one day in German, I hope also.

00:04:01: And kids

00:04:03: can access it from five years old and they can work with up until maybe eight to ten?

00:04:08: Yeah usually between five and nine or ten years old.

00:04:13: Now if we move on something more practical Gregory for someone listening today who has some savings aside but never invested before What are the first three things they should do before putting a single euro into?

00:04:50: Do I want to invest by myself and learn more about this subject, with some books?

00:05:00: Or do i trust my banker such as is going to invest in my money for me.

00:05:08: And after that when if you wanna invest by yourself the third important advice I will give is do not invest in single stocks.

00:05:21: So, don't take NVIDIA, Apple, Microsoft or I don't know Hermes and Do Not Invest In That Type Of Stock.

00:05:31: Why?

00:05:31: Because there are more than fifty thousand equities companies that are listed on the stock market worldwide.

00:05:39: So it's very difficult for us, particularly to invest in good and bad companies.

00:05:48: so reason why my advice is put part of your money into an exchange-traded fund which aims at following behavior of the CAC-Forty in France or the S&P-Five Hundred, an index based on

00:06:08: U.S.,

00:06:08: that regroups the biggest five hundred companies listed in the United States?

00:06:15: Is it a good time to start right now

00:06:16: ?

00:06:16: In fact yes!

00:06:18: It's always a good times to invest in stock market.

00:06:22: why?

00:06:22: because volatility is part of game key principle I share with people who follow me think that each year there is a crisis.

00:06:33: There are some geopolitical turmoil, et cetera but over long time period the stock market is going up.

00:06:41: why?

00:06:41: Because earnings of companies.

00:06:44: they're increasing.

00:06:45: The bad timing.

00:06:46: you cannot manage it because its impossible to predict whether or not the market will go down in next six months.

00:06:58: When you look at historical data, it's interesting to see that over a one year period the markets are up seventy percent of their time.

00:07:07: Over ten years' period is ninety percent and over twenty-year periods its almost one hundred percent.

00:07:16: The longer you invest in the stock market, the higher probability that it will have positive returns.

00:07:24: So this question is not whether to start now or later but what product do I want?

00:07:30: Do i want to do by myself ?

00:07:32: Or build the right habits like investing regularly?

00:07:35: For me for example there has been more than one hundred and eight months of investment each month.

00:07:44: So each month I invest, it's not the same amount of money because sometimes i have more money.

00:07:49: Sometimes i have less money to invest.

00:07:52: The two big advantages in investing every months is that first off all your money will work for you.

00:07:58: It's a compound interest.

00:08:03: is the fact that you stop thinking about, Is it a good time or not to invest?

00:08:08: Indeed Gregory.

00:08:08: The strategies you most talk about in your webinars and newsletters refer to ETFs as a diversified way of investing.

00:08:16: And since we've talked abut earlier so diversification is key concept In this type.

00:08:25: strategy.

00:08:26: Can tell us what does mean problem?

00:08:29: is it trying to solve for investors?

00:08:32: if someone wants to build a simple long-term ETF portfolio?

00:08:36: What are the main building blocks that they should look at?

00:08:40: Geography, sectors asset classes something else.

00:08:44: So when you want to invest an amount of money You have four questions To ask.

00:08:50: When you decide for example to say I'm going to do it myself And i am going to find some ETFs You have to ask, okay what is my risk profile?

00:09:10: Imagine you are one hundred thousand euros to invest.

00:09:15: If the stock market is minus thirty percent your one-hundred K is going down to seventy K. Are you able to manage that volatility?

00:09:25: Yes or no, because the volatility is part of the equation in stock market.

00:09:31: So if we invest only on equity ETFs You may have some year minus forty percent Or either a year plus thirty years.

00:09:44: So imagine that you say, okay I can accept volatility but i will not be able to manage a minus twenty five percent or minus thirty percent.

00:09:54: But I cannot manage a negative forty percent at the time.

00:09:58: perhaps You are going to invest seventy percent of your wealth in equity ETF twenty percent in bond ETF a bond ETF in its passive investment fund with going to invest in bonds such as security questions and perhaps ten percent in ETFs that follow for example gold.

00:10:24: The first question is called asset allocation, if you have long term horizon to manage the volatility.

00:10:34: At that time, you can invest such as I do one hundred percent of your wealth in equity ETFs but if you are not able to manage volatility for example Do Not To Do That.

00:10:47: Another important stuff If You Want To Invest In The Stock Market But In Two Years You Have A Project Go Back To Your Country And To Buy A House For Example and You Need That Money.

00:11:01: No, use that money to put it in the saving account but do not invest that money.

00:11:06: Usually when you invest money that you don't need at least five years and ideally ten next year.

00:11:17: The second important stuff is regarding geography.

00:11:20: European investors usually they invest sixty percent of their wealth in european equities, but europeans equities They do know the only account for twenty percent Of the stock market capitalization worldwide.

00:11:35: so when you look at The big part of the game I will say You have more than fifty percent of the stockmarket Capitalisation that comes from the US.

00:11:47: Twenty percent form up, twenty percent from a major market and you can have some little bit less than ten people form developed countries in Asia such as Australia, Japan, New Zealand Singapore etc.

00:12:07: Many retail investors are tempted to put too much money into what feels familiar or exciting.

00:12:14: and how do you explain the risk of concentration especially when a handful of large U.S.

00:12:19: tech companies is part so many indices?

00:12:22: As an investor you can have your own bias.

00:12:25: invest in what you know.

00:12:26: for example Japanese people.

00:12:29: they invest eighty percent.

00:12:31: Well, it's in Japanese stocks but Japan only represents a six percent of the global stock market worldwide and It is the same in the US.

00:12:41: In the U.S.. The us present more or less fifty one fifty two percent Of the Global Stock Market Capitalization.

00:12:49: But US people, they invest more than eighty-five percent of the wealth in U.S companies.

00:12:56: What I usually say is that the geographical areas are cyclical Sometimes between two thousand and two thousand nine.

00:13:06: it was imaging markets that were doing better than the

00:13:12: U.S.,

00:13:12: but from ten and twenty-four included, it was the US who are doing better in emerging markets the different areas, but a lot of people.

00:13:33: they follow for example A well-known index that is called the MSCI world.

00:13:39: That's we group one thousand three hundred companies.

00:13:43: But almost seventy five percent of that index it comes from US companies.

00:13:50: So if you only invest in that your exposure to us won't be fifty one or fifty two percent?

00:13:57: It will almost a seventy-five percent, which is in my view overweight.

00:14:03: But maybe you can also put some personal conviction into your portfolio when you build it?

00:14:08: Maybe you want to support small companies who are... innovating, producing growth in communities.

00:14:17: Not necessarily the biggest companies.

00:14:19: and also maybe we can mention the ESG preferences.

00:14:23: Maybe you care about investing in a company that respects environment people And society in general.

00:14:30: so You can only follow with the metrics of performance like you said or you can Also put some personal conviction by looking at what those companies actually do In what regions?

00:14:42: But for example, for the EAG preferences it's interesting because you have plenty of ETFs that are called EAG and You're able to with GCTF.com With some filter To filter them And find some ETF That do not invest in all companies For example... You may have some conviction but I usually say If you have some conviction about some country or sector, individual companies because you like that company all your convictions can represent between ten and fifteen percent of the portfolio.

00:15:29: Now we can invest easily but the main issue is the fact almost any time, so it can be very difficult to say okay my strategy you put your strategy in a one single sheet of paper and if I am tempted to invest in individual companies i can do that.

00:15:57: but my rule is for example ten percent maximum and ninety percent of the portfolio will be in diversified ETFs.

00:16:07: Okay, so you need the strategy with some clear numbers.

00:16:10: So make sure that you still stay diversified even if you put personal conviction in

00:16:15: your

00:16:15: portfolio?

00:16:16: Indeed because usually convictions are based on emotion and emotions they're not good for your portfolio over a long-term period.

00:16:25: Speaking of emotion when markets feel unpredictable what should investors actually do and avoid doing

00:16:33: before investing?

00:16:34: You define your allocation asset allocation, geography allocation sectoralocation and size allocation.

00:16:42: When you have done that even though the market is going plus thirty percent or minus thirty percent your strategy it's still the same.

00:16:51: a market crash occurs each three four years.

00:16:56: so drop decrease of minimum twenty percent such as beginning of two thousand and twenty where the market was down between nineteen on February to twenty four twenty three off March my new thirty percent.

00:17:15: it was also the case in two thousand twenty-two in two hundred twenty five or so when the markets was done.

00:17:22: twenty percent more or less.

00:17:26: each three years, three and a half year there is market crash.

00:17:29: So Market Crash.

00:17:31: Volatility is part of the equation in stock market.

00:17:35: it's interesting to understand that seventy-five of the best days on the stock market occurs either during bear markets in the next two months following a bear market.

00:17:49: So when the market is down, it's usually at that time where the markets are going to rebound and increase a lot.

00:17:58: If someone listening now feels overwhelmed by headlines or uncertainty what is one action you could recommend they take this week?

00:18:11: First of all Avoid, I would say sometimes reading articles or all that stuff because a lot of her Articles they are based on fears and usually fears sells more than i will Say happiness.

00:18:26: so be careful about That.

00:18:28: for example you know Sometimes people look at their portfolio once a week Or once a month something like that when them.

00:18:35: but When the market is down.

00:18:37: They Look At The Portfolio Each Day.

00:18:40: Do not look at your portfolio each day because it will send you some negative signals to your head and sometimes, your emersion they'll take the lead.

00:18:50: They decide on where to sell.

00:18:53: but selling when market is down minus twenty percent isn't a good strategy.

00:19:00: there is a high probability that he will ribbons very soon.

00:19:03: How often do you check yours?

00:19:05: In fact, because I do financial education... ...I check my portfolio because I share my portfolio online on social networks etc.

00:19:14: but i check it perhaps three or four times per week.

00:19:19: Gregory one last question as your also the dad of two young children And in the activity book you've mentioned earlier, In The Podcast.

00:19:28: You introduced money concepts as early as five years old.

00:19:33: What are the most important money lessons families should start teaching at home?

00:19:39: First of all what is money?

00:19:41: because when you ask this question to Adults, for some adults money is freedom.

00:19:49: It's security and you may have a lot of projection on money.

00:19:55: In fact money it simply way of transfer between.

00:20:02: I will say to two people its only like that so very important understand and to share it with the kids that money is not a goal, but money is simply something which helps us make some exchange between goods & services.

00:20:23: A second important lesson I learned from my children was the distinction between your basic needs to eat , drink or have an apartment false needs that have been put in our head by the industry, but that are unnecessary expenses.

00:20:47: So that would be my advice for children and to trust them.

00:20:52: Gregory thank you for being on Money Talks.

00:20:54: this has been a very practical conversation.

00:21:01: Start simply, stay diversified.

00:21:04: think long term.

00:21:05: In moments like these when markets feel uncertain I understand the good strategies to build on discipline and not prediction.