First portfolio (pre-edit). MP3

The hosts of a podcast discuss their gratitude for their listeners and address some questions from them. They then recommend a book called "The Expectation Effect" by David Robson, which explores the power of beliefs and the placebo and nocebo effects. They then transition to discussing portfolio building for beginners, explaining the option of hiring a wealth manager and recommending digital wealth managers like Nutmeg and Money Farm for those with low interest, time, and knowledge in investing. Hello Scott, hello Dave, how are you mate, yeah I'm good thank you mate, I'm good, how are you? Yeah good thank you, a little bit tireder than normal, we normally record this a bit earlier but, yeah another day another podcast, another day another podcast, but yeah I'm excited for this one, I think it sounds like there's something that, there's some information that people will be able to really take away, yeah I've tried to get this one as practical as possible, it's actually a question that was sent in from one of our listeners so hopefully whoever you are, you're going to find this one useful and hopefully more people will also enjoy it, so yeah, yeah and on that note, look it's not that many of you, yet, but I've been pleasantly surprised by the amount of listeners we've got so far and the support people are showing, yeah yeah 100%, I just want to say thank you to everyone so far for listening, all three of you, you've been great, no honestly, and mum, hi mum, it's been good, we've got a few questions now from people and we will try and address some of them, line some of them up, there's one about warm ups and cool downs which I'll try and address in another podcast if there's anything I want to quickly answer those questions, and there was one from Heaney1UK who said why would we take financial advice from a man who describes a river as three foot tall, so that's also another question, I still stand by that, cool but yeah, should we get into it, yeah so I'll kick off with kind of health related, not fact this week, just a little recommendation actually and it came from me listening to another podcast, the author of this book that I'm going to recommend has been on quite a number of podcasts and I've heard him a few times and enjoyed the things he's said and I went and actually then read the book this time, so the book is called The Expectation Effect, oh I haven't heard that, so it's called The Expectation Effect, it's by a guy called David Robson, again I haven't heard that, this is interesting because I'm usually quite good with my books, yeah and it actually addresses a lot of the topics that we will go into and have gone into and some of the research that we've talked about, so I don't think he actually talked about the study but I remember a few weeks ago we talked about the placebo pill and paying more for it and so the book's kind of based off a load of really good scientific studies that go into mechanisms like that, so essentially placebo, a lot of data and research and it's just really some of the studies are just mind blowing to me, so the placebo thing and things like people saying that placebos will cause pain relief and things like that, sham surgeries, so when somebody goes in and pretends that they've done an operation, they don't get through ethics committees very frequently but like two groups of people, one group have the surgery, the other group have a fake surgery, yeah and they do better than people who, both groups do better than people who just do rehab alone and it's like, so they'll still, both will end up with stitches for example, exactly yeah, so they open the skin up, so they believe that they've had the operation and there will be a little bit of pain associated with that but then they recover the same as the group that actually have the surgery and things like that and better than people who don't have the surgery and then he talks about the nocebo effect, I haven't heard that, so that's the opposite basically of a placebo, so placebo often being a positive effect from something because you believe that it's going to work, the nocebo being you think something might be negative and therefore it becomes negative, okay, so he wrote the book because he's quite openly suffered with his mental health, started taking antidepressant medication and one of the potential side effects was headaches and he started getting headaches, yeah, and that's actually what I think sparked his like interest in this whole field and topic and so yeah nocebo is that kind of mechanism, placebo being the other thing, so yeah it's all just about the mind and these crazy studies of how powerful beliefs can be, the expectation of certain things, there's this one study, I'm not going to talk about all of it, I'm going to let you just go away and read it, but a quick summary of the most crazy one to me was that some men that emigrated to Laos in Southeast Asia, yeah, sorry maybe I might have already misquoted it, great, from Laos had a greater rate of nocturnal death, so more people died at night, okay, because they believed that there was this spirit that could come and kill them in the night and there was this huge increase in death and they actually attributed it to the expectation that they believed that they were people were going to get killed in the night, they died of like cardiovascular events mainly because they were probably becoming insomniacs and not sleeping, becoming very stressed and then getting, and those things obviously relate to negative cardiac events happening, so people actually dying because they believed they were going to die, that would be very scary, I might have explained that one badly, yeah, again I'll just let you crack on, and what's the book called again? It is called The Expectation Effect by David Robson, I have no association with him other than he has a cracking first name, okay, so the topic this week from you, so this week we are going to talk about how to build your first portfolio, so what you're trying to say is we need to talk about portfolio building first time, that'll do, thank you, I'm really excited about this one, I think there is going to be a lot of practical advice hopefully, it's going to actually be of real interest to people, unlike back pain or something, ramble on, it's a hard one I think probably to kick off with, but I want to grow my first ever portfolio Scott, where do I even possibly start with that? Yeah, so I want to keep this one as practical as possible, so before we get into actually how to build it, I think it's worth probably explaining what the different options are to everybody, because diving straight in and building a portfolio is actually kind of at the, if you look, if you thought about it on a scale from like easy to hard, it's probably like you're more hard or advanced kind of area where you are, so straight in at level 10, yeah yeah exactly, so if we start at level one and then we can work our way up, so level one would actually be getting someone to manage your portfolio for you, I guess it's kind of like my job, so people will pay me to look after their money for them and invest it how I'd like, that means that it takes away any of your time, you don't have to have much knowledge about it, and you don't have to have any interest in it either, so I think those are the key three things that I'm going to be talking about here, so for someone to manage your portfolio, you're going to have low interest or moderate, low time and low knowledge, so what a wealth manager does is they'll take care of all aspects of your investments including your financial planning as well, so that's probably not as relevant right now to you Dave, yeah can I jump in on a question on that, if I am somebody, which I am unfortunately without a lot of disposable income, paying somebody to invest that small amount already of disposable income sounds I guess not the wisest idea right, would those people take a percentage of my portfolio, would they take a chunk of a fee? Yeah, so again two options here, we've got your traditional wealth manager who will tend to have minimum investment amounts anyway, so you wouldn't be able to actually invest with them, so it's more for your higher net worth person, what you get for that is more of like a high touch service and it's a lot, they can take care of a lot more complex situations, so actually you probably wouldn't need to go to one of these traditional wealth managers, however if you did want someone to manage it on your behalf, there's actually a few digital wealth managers out there now which cater a lot better for I guess the everyday person because the minimums are very low, if not zero I think on average the minimum is like 500 pounds to get started, which is to some people a lot of money, but in comparison to the traditional group it's basically nothing, so the difference between the two is the digital wealth manager is a lot more cost effective, so you're looking at paying between 0.4 to 0.6 percent on your investments, so it's all percentage based usually, which is good if you're doing a small amount because rather than a flat fee obviously, versus a traditional wealth manager which you can be paying from anywhere from half a percent up to two percent, depending on where you go, what kind of service you get, and again digital wealth manager is for people that don't really have any complex situation stuff going on really, so if you're, and when I say that it's like unless you've got lots of many generations under you and you've got a big inheritance tax bill or you've got lots of different financial planning stuff you might need, you don't need it, so for the everyday person you won't have these complex issues, so you don't need to actually employ someone to do that kind of thing for you, so that's where a digital wealth manager really comes into its own, and I'd probably recommend, there are two that come into my mind, so you've got Nutmeg, which you may have heard of, that was like the OG wealth manager, the digital wealth manager, they were actually recently acquired by JP Morgan, but that's still very cheap and open for anyone, and then the other one which is like their main competitor is Money Farm, they're a European company but very similar services, I've tried both of them out just to see what they're like and see kind of the app interface and all this kind of stuff, and yeah both very similar in terms of what they do, you'll kind of log on, you'll get asked a load of different risk questions to work out what portfolio suits you best, then you'll be asked about your different goals, what you're trying to achieve with it, and then they'll just put you into one of their managed portfolios, so you don't really get much of a choice in terms of what you're investing in because they're going to allocate that for you. So it's like a predetermined script in a way? Yeah exactly, so that's what you'd call a model portfolio, so it's a pre-made portfolio designed for your personal risk level, and that's kind of what it is, it's usually made up of low-cost index trackers which are these passive investments that are just very rich. I'm going to stop you, what's an index tracker? So it's a good question actually because it's worth getting into it, so you can buy, and this is where I think I've mentioned before, like the S&P 500, that's what's known as an index. Okay. It's a combination of, using that example, that's a combination of the top 500 by market cap companies in the US, what you can do is buy a product that's going to follow the price of all those companies in a portfolio basically, and usually you'll buy that within an ETF, that's usually the most cost-effective way for a retail investor, so that's what a portfolio would tend to be made of, just because it's cheap, you're not going to pay too high fees on it, but obviously you need to think about the actual management costs on top, so say the portfolio itself might cost you 0.2%, you'll also have to think you've got to pay 0.6% on top of that as well for them to manage it. Is there, there might not be, like any research on whether the extra cost is worth it? Does that make sense like that? Yeah, so it's actually a really big topic at the moment because the whole industry is getting squeezed for costs, where back in the day a lot of brokers would be charging a lot of money, and this is like almost the golden years, where you could, back in the golden years you think about like in the 80s where these bankers were making like ridiculous amounts of money, and it's because they were charging their clients a lot of money to do it, basically people have woken up to that, they're not willing to pay these high amounts, and all the costs are coming down, because costs have a real impact over a lifetime, it can be up to like 40% of your total returns that have gone to management fees, so that's why yeah, consider the costs when you're looking at these things. Just to finish on it, I'd say if you've got some complex needs, it's definitely probably worth it, if you haven't, maybe not, maybe think about something else. So that's level one? Yeah, that's taking complete responsibility away from you, you're literally delegating the whole experience away, you're paying a price for it. Okay, so we've defeated boss level one. Yeah, so now we're moving up to level two, and this is where things start to get a little bit... Semi-pro on FIFA. Yeah, a little bit spicy. Okay. But still quite manageable, still kind of low time effort, you need a bit of low interest as well, so you don't have to have loads of interest in markets, and also low knowledge. So yeah, again, your barrier to entry is still quite low, and what this is, is called a target date fund, okay? Okay. So what a target date fund is... Target date fund. Yeah, target date fund, it is kind of what it sounds like, so the fund has a target date in the future, where it will basically end, okay, so it will mature. From now until then, your allocation of that portfolio will be slowly changing over time as you get older. So, for example, say you invested in one today, Dave, you're a young, strapping, handsome man. Thank you. I'll give you your money later. Thank you. Thank you. Tell me I'm handsome again. Sorry. Sorry, everyone. I should have ruined the podcast. I was on my train of thought. It'll come back. And so you've got quite a long time horizon until you retire, essentially. So say you've got 40 years left in you. Ambitious. 40 years. At the start, that portfolio will be automatically invested in higher-risk assets, and a small portion will have lower-risk assets in it, okay? So, for example, you'll have maybe 80% of that portfolio be allocated to stocks and equities, and 20% will be in bonds. So it's like your low-risk stuff. As you get older, it's almost like turning a dial. So as you age, that dial gets turned and the equities start going down whilst the bond allocation starts going up. Okay. And the kind of theory behind it is that as you get older, you want to be taking less risk because you don't necessarily... you don't have as much time to recover from... Risk of heart attack? Well, yeah. But you don't have as much time to recover if the stock market fell through the roof. So that's the idea of that. It's a cheaper solution to going down a managed route. So in a sense, it's managed because your portfolio is being allocated by somebody behind the scenes, but it's actually... It's just AI, I think. Yeah, I think pretty much. It's all done automatically. And what you'll get from that is you'll get a lower fee. So average fee when I had a look was around 0.25% for any funds. And when you think about a managed fund, when it was kind of like double that, you can kind of see that it's almost half the price. Okay. And it's for all ages as well. So you can start over 18, I think it starts out. And then even if you're 50 right now, there'll be a specific target date for you for when you want to retire. So say you've only got 10 years and you said, I want to retire when I'm 60. There's going to be a fund with that specific date on there. So you just need to find it, which one works for you basically. Okay. And then if you want to have a look, I'd say Vanguard is probably the best. They're like the leader in this. I have heard of Vanguard. Yeah. They're the leader in this industry for that kind of thing. It's technically more of a pension product, but you don't actually have to invest into it via your pension. You can just do it with your normal money. Sure. And it will be, so I understand the risk decreases as the years go on. But I would hazard a guess, the overall risk is a lot higher than standard pension investment or not? No. So potentially a misconception where it's very, very similar to how your pension will be invested. So when you're younger, and some people are able to choose what their pension is invested in, some people it just happens automatically. But when you're younger, you tend to have more of an allocation to risky and when you get older, it slowly goes down. They are probably more conservative. Unless you actually go in and manually choose what you want to invest your pension in, it's going to be slightly more conservative than probably what you'd want. Because, yeah, from my point of view, and this is just me, everyone's risk tolerance is different. Because I'm still relatively young, my risk tolerance- And strapping and good looking. Yeah, thank you. Good looking. Yeah, my risk tolerance is high. I'm relatively young. I just go 100% equity because I feel as though that I'm going to make potentially the most return there and I can still recover from various downturns that will occur. So yeah, that's level two. Nice. So with that, would you say, Miles, Lemon and Herb? We've done Lemon and Herb. We're up to Mile on the Vendor's Scale. Are we up to Hot yet? We're not getting there. And yeah, just to finish off on that, these will all be passive as well. So it's what I explained earlier. They're all invested in an ETF structure. And when I say passive, it means that there's no room to beat the market. You're only ever going to get the market return or less. Okay. So that's the big differentiator there. Yeah. Cool. Level three. I'm getting it. It's getting hot. Do you want me to put the air going on? Yeah. We're getting hot now. We're getting hot. DIY. So now we've moved on to do it yourself. But we're going to go passive. Okay. Because DIY passive, and this is where we start building our own portfolios. DIY passive can be scary to people and you can do it. You can do it poorly, but it's really easy to do. Okay. So the way you do it, is you can invest via a broker and that can be someone like Hargreeves Lansdowne, AJ Bell. There's so many. If you just Googled investment broker, a lot will come up. Just find the one that is cheapest, offers probably the most selection. But yeah, I'd say the two that I just mentioned are probably the main ones in the UK anyway. So the way you want to do it is, and there's again, lots of ways, but I think probably the easiest way to keep it passive is to invest in, almost create your own target data fund in a sense. So you can buy something called the MSCI All Country World Index. So a little bit like the S&P 500. This is just a portfolio of the world's companies this time. So it's kind of doing the regional asset allocation for you. So you don't have to worry about putting 60% in the US, 5% UK, all this kind of stuff. It's kind of doing it for you in one portfolio. And then you can buy another ETF, which is a bond ETF called the Bloomberg Global WAG. And this again, is just like an amalgamation of all the main global bonds into one portfolio. So you can buy literally two ETFs to almost replicate that target date fund. And it'll be a lot cheaper for you to do that just from doing it yourself. So on average, buying these ETFs will be from like 0.1% to 0.2%. So a little bit of cost saving there. Obviously, if you want to be slightly more diversified into different asset classes, you could think about buying maybe some gold, something that's uncorrelated as well, like a hedge fund. But I don't know if there's actually decent passive instruments that would be useful for that. So yeah, don't listen to me on that one. But I'd say if you stuck to just the equity and the bond, you'd probably be pretty close to what the target date funds are doing. But you're going to be saving a bit of money. I guess the only thing though to consider is that it's not going to automatically rebalance for you. So as you get older, it's not going to slowly de-risk like the target date funded. So you do have to have a little bit more interest in it, I'd say. And this is where kind of the knowledge is coming up a little bit. And then also, you need to have a little bit more time to think about what is my current allocation versus what it should be. Because over time, your equity, so your risky part, will move up and your bonds will go down. So you will have to rebalance and cut a bit from the top. So that's kind of like a little hack of building one of these target date funds for slightly cheaper. But yeah, again, it's all passive. So you're not going to meet the market. You're going to get what the market is going to give you basically. So are you ready to move up to hot and spicy? I'm feeling so ready, Scott. Bring the hot and spicy sauce on. Right. DIY active and passive. Okay. So this is where we start building a portfolio that you would usually pay for. And this is kind of almost going back around to the first one. So a managed portfolio from a wealth manager would be built similar to this. So you'll have passive instruments in there. You'll have active instruments and you might have some direct stocks and companies rather than just funds. So for this one, you need to have a lot of time because it's not something that you just want to give it a go, which I think a lot of people do. They'll just buy a load of stuff that they've seen online or whatever Elon Musk has tweeted about. They just buy it and you end up with a whole mismatch of stocks and whatever. And that's when your risk management's way out. You're buying stuff that you don't really know if the company's any good or this kind of thing. So yeah, you've got to have a lot of time, a lot of interest in it. And also you've got to have a decent amount of knowledge as well. So it's active and passive for this one. So that means that there is potential to beat the market. So say the market returns 10%, we could potentially be earning more than that or under it. So this is where the risk kind of really comes in because all the time you're passive, you're going to tend to get the market, which means that your risk of not getting what, 10% for an example is really low. But when you start playing around with things, it's when you can either outperform or underperform. So reasons to do it, I'll say would be you've got more flexibility. So you can include or exclude different stuff. So if you're buying a passive fund, you're going to get everything in there, including oil stocks, you'll get like tobacco. So you'll get everything unless it's been ESG screened. So if you feel strongly about certain things you don't want to own and you don't want to invest in, this will probably give you that flexibility and control to let you not do it. And it's going to be cheaper than obviously doing it yourself, it's going to be cheaper than paying someone to do it, which is an obvious one to highlight there. So I'd say the steps you want to take would be, step one, you want to determine your risk level. So a bit like the apps that I first mentioned, you'll go through a process of understanding how comfortable you are taking risk. And there are questionnaires online that you can take, free ones that will just put you in, just again, Google it, it'll put you in a different category and you'll tend to be like low, medium, high, generally speaking. They're not use Fernando's barometer. They don't actually, but it's a good idea. I think they should. Yeah. I mean, I think it's actually usually on numbers, so it'd be like a one to seven. I don't know, don't ask me why, but it's a one. One to five, eight. Fine. Okay. Yeah. So that'll be your first step because you need to know how are you going to allocate your money, i.e. what risk you want to take. Step two is going to be choosing your benchmark. Okay. So your benchmark is going to be the thing that you need, you either want to be tracking or beating. Okay. And the benchmark will be a index. So just as, just like the VTS will track these index, it's, you're using that as your benchmark because ideally you want to be trying to get more than what the market's producing. Because if you're not, you go, not very good at this. Yeah. Eventually if you're not, if you're not beating your benchmark, you're detracting value. So it's like, you might as well just bought a passive ETF and forgot about it. So choose your benchmark. I would probably go for MSCI All Countries World. So it's just, it's a global benchmark that you can use for your stocks. And then again, use the Bloomberg Global WAG for your one benchmark, because they're two good global indexes that you can try and beat essentially. Step three, you'll be determining what your long-term asset allocation is. Okay. So think about it a bit like building the foundations of a house. So you want these foundations to be like rock solid. Okay. And you want them to be, you kind of want them to be low cost as well. And you don't want to take too much risk away from, too much risk by investing in them. So for an example, you can recreate this world index, like you're talking about, and you can allocate and you can divide up into different regions. So you can buy, say it was 5% in the UK, you allocate maybe 5% into a FTSE 100 ETF. And then you do the same with the US. So US, a proxy would be the S&P 500. So you would allocate maybe 50% into that. And you would slowly almost build that benchmark, but just with your own funds, but using these kind of low cost trackers, because it's the sturdy stuff that is going to be close to what your benchmark is. So where it starts getting interesting is your short-term asset allocation. And this is what you call your tactical asset allocation. Okay. And this is where you start taking almost bets around your benchmark or around your portfolio. So for example, we've got step three, we've built the foundations. Okay. So if we did nothing, we'd just be tracking what our benchmark is. However, we think that the US is going to outperform this year for whatever reason, maybe there's some good economic data coming out or something like that. And then we think that the UK is going to underperform, okay, because of high inflation, and it's not coming down as quick as the US, so we're going to have higher interest rates for longer. That could be an example. As a result, what we're actually going to do is we're going to lower our allocation to UK. Okay. So we're going to sell some of our UK holding, and then we're going to increase our allocation to US. So we might buy some more S&P 500. Okay. So we're overweighting that particular area. And this is where you can start making money and outperforming the benchmark. And if you want to take it a step further, you could say, I want to invest more in the US because I think it's got better macro outlook for the next year. But I want to specifically invest in healthcare, for example, because I think US healthcare looks really interesting within the US. Okay. So then what you do is you can start buying either specific company names in the US healthcare sector, or you could buy a US healthcare fund, or an ETF. So depending on where if you want to use an active fund where it's not tracking any benchmark, it's just a stock picker, or a passive instrument like an ETF, it's still classed as active management. Okay. So does that all make sense? So where you can potentially allocate to different areas to try I get it. You've got, again, it comes back to that weird moment a few weeks ago, when we're trying to find risk, but it's almost that you have more like autonomy over what you're doing with it. And you're gonna use your intuition in a way or take one expert's advice rather than like the average of something and you're gonna again, take a take a risk. You know, it's more risk management. Yeah. Yeah. And it's obvious, you know, you can see why that is risky. But then, you know, you could get you could get very, very lucky with it, but I completely get what you're saying. I guess, to almost put it into like, it's a hound a poker, right? You've got, you've been dealt a hound. And depending on how much you want to put down in that particular hand, you're just managing that risk. You go all in, but you might lose all of it. So it's almost spreading those chips to different areas where you think your probability of making or winning that hand is going to be the highest. So that's basically the idea of the active slash passive DIY portfolio. It's not for everyone, because it takes a lot more work. So how much I mean, I know it's going to be different for everyone. And obviously, someone's predetermined knowledge, they're going to need less time in that in that moment. But if you were to put a rough estimate on how much time somebody would need to invest into this. So I think it comes back to time interest knowledge. So you've got to have potentially you want to be staying on top of what's going on in global markets. So, and that might mean simply looking at the news once a day and just seeing going to the financial section and having a little read of what's going on. Obviously, it's not for everyone. It's not some people find it interesting. Some people find it horribly boring. So you've got to be interested in it to then actually do it every single day. But it doesn't have to be every day. You could say do once a week and get a good idea of what's happened in the market. And you want to like, it comes down to the individual because you might be a really active person who wants to be trying to make small bets all the time. Or you might just say, you know what, I'm all in. I'm good. All on black. All day. You won't last very long. But all you might be like, you know, I'm going to take more of a longer term strategic view here and say, if I see an opportunity that I think, oh, that's interesting. Maybe the price of petrol at the station has gone all the way down. You're like, oh, maybe oil is really cheap at the moment. That might happen once a year kind of thing. I mean, I'm not saying do that. Buy oil. Yeah. But yeah, it's down to the individual how much time you put into it. And yeah, I guess the more time you put into it, the more confident you can be with making these bets. I think what's really nice, I thought was an obvious tip when you think about it, but that comparing back to baseline, right, in terms of tracking what the markets are doing generally, because you might either way, positively or negatively go, oh, I'm doing really badly or I'm doing really well. But actually, that has relativity to the overall trends, right? So you might be like, I am a genius. I'm smashing this. But actually, everything's just flying up at that moment. You might be up 20%, but if the market's up 40%, you've actually done really bad. Yeah, exactly. Yeah, everything being relative. Similar to what physios always do in healthcare of like, attract you to you with how much range of movement you've got in your knee, but what is normal for a person at this many weeks post this same injury. So you've always got that kind of A, you're doing well, and you're improving yourself. And actually, you're doing slightly better than the average. And, you know, there are then deviations from that. But that's, I really like that. Because I don't think I would have necessarily automatically thought about having those, those two. Is there software that would like, sure there is, like, track, almost like on a graph, like where your line is to baseline? Yeah. So there are lots of different websites, you can basically plug into, plug in your portfolio if you wanted to. If you're using a managed solution, obviously, you know, it'll be all done for you, you'll see where your benchmark is. But yeah, it's, if you're doing it DIY, there's a lot more kind of studying you have to do. And that's a good example. If you want to add in a benchmark, I think some of them, you might be able to add a benchmark in and do the analysis yourself. But yeah, it's, it's, it's, it's certainly the most important, actually, is making sure you know what your benchmark is. And just to finish off on the almost the final step of this, and it's, it's nice. I think I know where this is going. Are we going, are we going to extra or? No, no, that was top level. Is that top level? That's it. It was a bit disappointing. I thought my head was going to get blown off. Okay. It's, it's making sure that you monitor and rebalance your portfolio on a, on a certain time horizon. So whether that's quarterly, every six months or yearly, that's down to, again, how much time you have and how much you want to manage your risk, because over time, your positions are going to be moving. Like a portfolio is a dynamic thing. It's, it's moving every single day. Every time the market's open, your portfolio allocations are, are moving around. So if yesterday you invest or allocated 5% to the UK, tomorrow, it's not going to be 5%. It's going to be slightly different. So my advice on that one is, is put in tolerance levels. This is what we do in portfolio management, where you might say 1% and 1% above the desired asset allocation and 1% below. So if you wanted 5% in the UK, you might say, if it hits 6%, I'm going to chop it off and reallocate that money into wherever the underweight is. So it's making sure that you're managing that risk, because what a lot of people do will almost set and forget. And you end up maybe a year, two years down the line. If your initial risk target was maybe 60% in equities, that's naturally going to grow if the market's been going up by like, it might be now 70%. So your risk management is off. So it's quite important to monitor and rebalance on a periodic basis. Scott, I think that's been very interesting, very informative. I think I was, I had no idea how you were going to try and approach this topic. Leave it to die. No, fine. I feel I've wound you up a little bit there, like a little toy and just let you go off on the journey. But it was really interesting, because I think for anyone starting the journey of building a portfolio, I think they need to take time to listen to something like that. And almost place themselves in one of those camps. You need to make that decision, don't you, before you even start, like, which of these camps am I going to start? And then obviously, you can get more nuanced into each one. But it's like, okay, evaluate, what are the three things again, so knowledge, time and interest. You set them, you set how risk adverse versus risk seeking you are, and then you can go, okay, that's where I sit, that's the camp that I'm in. And then you can begin the journey. Yeah, I think the key takeaway on people to have is, yeah, do a bit of self assessment, decide on those three things that you said, how much interest have I really got in it? How much knowledge? And if you have low knowledge now, you can learn it, it's especially on the internet these days. So how much knowledge you have, and then how much interest you really have in it? No, sorry, time. Yeah, how much time do you do you have? Like, if you're working in a job that required a lot of your time, you know, perhaps even if you have loads of interest in it, and you really want to build your knowledge, it's not going to be you almost need to tick all three things to go through that. So it's not going to be right. So yeah, figuring out what's right for you is going to be the key. Yeah. And I think, I think it's one of those things so easily, you know, you start something for a week, and you get really interested in it. And you're like, Oh, yeah, this is good. This is going to be easy. I know, you know, you might have a week where you've got a load of time and think, yeah, happy days. But actually, like with anything, it's like, Oh, I can, I'm going to, I'm going to learn Spanish next week. And I want to spend 14 hours on Duolingo, not sustainable, perhaps, so taking time to really go, is this realistically, is this sustainable? And I think many people, myself included, are very excited about, you know, little projects, oh, let's start making a podcast. And you sometimes underestimate how long those, you know, in practice, it seems simple, but it takes longer than you, you sometimes think. And, you know, financially, they could have huge implications. So I'd imagine a lot of over-excited young people especially can find themselves in trouble by being too high up the Nando scale, right? Yeah, I think the law of making a lot of money, and especially at the moment with TikTok and all this kind of stuff, people are making loads of money on different stocks. And the truth is, it's so risky that it's almost like trying to win a lottery. And you only see and this, you know, this comes back actually really nicely rounds back to my kind of world of like, you only see and hear of the successful things, right? It's the confirmation bias, you know, you're only going to put it on, you're not going to put it on TikTok if you've fucked up hard, are you? You should, yeah. But you see the ones that are like, yeah, I've made 8 billion pounds off this, you know, and they've got, they might be knowledgeable, or it might be pure blind luck. It's like in the video, Instagram, TikTok world of like, oh, this chiropractor cracked this back, and fixed me forever. But you don't see the other 400 patients who have just wasted lots and lots of money on this on this process. And that's why, you know, I always go back. Unfortunately, you know, there are anecdotal cases where things will help people, we don't always know the mechanism of why, but we go, okay, on average, what does the evidence say? KTAPE, what does the evidence say across hundreds and hopefully 1000s of people versus listening to your mate down the pub? It is good. And I've actually had a text or someone being like, I fully agree on team Scott on this. I don't know how we've got back to KTAPE. But no, honestly, mate, really, I think a good starting point. I think there are probably things we can jump off of in and around there and look at different levels and advice. But yeah, yeah, definitely. I think there's, we could go we could go a lot deeper into the actual asset allocation. But yeah, one for another time, I think. Fantastic. Thank you very much, Scott. Thank you. So I guess all that needs to be done is the sign out. So everything I said today is obviously my opinion. And if you do require some kind of financial advice, or something like that, I think the key thing to do is seek professional help. Nice.