First, I just want to say a bit about me. Um I'm a financial journalist, so I used to be the staff writer at Money Observer here in London, which used to be part of the Guardian's Observer.And then I went freelance a few years ago, I've been a contributing editor at Money Week, which is a big financial magazine here at the IPA. And I created the Sustainable Investment Report for the Sunday Times. So I'm talking from a perspective uh of a journalist and I'm also a personal investor. So I've been investing in the stock market for about uh six years now. Um you know, just investing my own savings. Uh And as a disclaimer, I also want to say I'm not a professional investor, I'm not a financial advisor and I'm not qualified to give financial advice. It's really important to say this. Um So I'm talking here as a, as a journalist and as a personal investor. And this talk is for those who want to understand what the stock market is, what investing is. Um And you know, just understand what's behind all of the jargon that we encounter in the industry. The other thing that's important to say is that investing really depends on your personal circumstances, right? So, um I will generalize a little bit, but in many cases, it will uh come down to your personal circumstances. OK?

And the other thing to say is that when you're investing in the stock market, capital is at risk, OK? They always say capital is at risk, that means your money can go up and it can go down and you can also lose money in the process. Ok? So that's uh really important to know and many people don't invest in the stock market um because they don't understand it right? Because there is so much jargon that the industry is shrouded in. But in reality, I think that many investment principles are easy to grasp. And so I will try to explain some of them now in 15 minutes um to just explain what the stock market is, what investing is, what a share is, how investing works, how investing relates to wealth inequality and why I think that more women need to invest in the stock market. OK. Are you ready to go? Uh Thanks for all your kind comments in the chat. That's really, it's nice to see that. OK. All right. Don't worry. My slides were not that special. So yeah, you're not missing much. Um So, OK, so what exactly is investment companies raise money in order to grow? Ok. So in very simple terms, imagine you're running a cafe in your neighborhood and it's going well, you're making a profit. So if you want to open another two branches in other parts of town, but you don't have the capital, then you can involve an investor who will give you the capital and in return, they will have a stake in your company. OK?

That's like a very simple way of explaining what investment does. And if you think at this point, if you think that investing does not impact your life, let me show you why it does. So, first of all, everything around us has benefited from investment, you know, all the innovation, most of the products we see. So the laptop that you're watching this on, like possibly even my sunglasses, everything is influenced by um the investment industry. So that's, that's the first thing to remember. The, the second thing to remember is that if you work for a company, so if you're an employee, the likelihood is that you have a workplace or an occupational pension and the money in your pension is invested in the stock market. So if you don't know how your company invests your pension, that might mean that you're, you could be an oncology specialist, for example, but your money could be invested in the tobacco industry, right? There was a famous example of somebody like that in Australia who started a campaign because she realized um she treats cancer patients all day long. But then her pension pot is invested in tobacco. So she set out to like bring more clarity to the market in that way.

So I would recommend if you have an occupational pension look into where it's investment. Ok. Um The third thing is if you have a bank account, it's likely that your bank invests your money or that its loans out your money to a variety of businesses. So that's also potentially something to look into. Um There are different types of investors. So I'm going to talk about diy investors here or sometimes they call them retail investors rather than professional investors. Ok. And there's a perception that investing is only for wealthy people who can afford it. Um But that's not actually the case. So over the last decade, we've seen the rise of diy investing. Um And in many ways, this goes back to the internet because the internet has given us both the platforms and the tools, but also the transparency, you know how you can compare prices and you can see across a variety of companies online. Uh You can find lots of educational resources online, you can read articles online about investing. Um So when you think about how the internet has given us tools to take matters into our own hands uh wider, you know, it's, it's done that across all areas of life. For example, if you want to find the love of your life, you go on to a dating app. Uh you no longer need a matchmaker, right? If you want to book a holiday, you can just go online, find a flight, uh find a hotel and book it yourself.

You no longer need a travel agent. And so the same has happened with personal finance to some extent as well and with personal investing, so new technologies and platforms have leveled the playing field. They've enabled people who historically kept their cash in the bank um to also invest in the stock market uh with a relatively low entry point and without having consulted a financial advisor necessary. So, Diy investors typically create and manage their own investment portfolios rather than going to a traditional broker or a money manager. And the barriers can be very low. Many online platforms start with like £25 or $25 for you Americans um per month or maybe £50 a month um for people to, to start investing. And in the UK, the market of online investment platforms has doubled from 250 billion to 500 billion between 2013 and 2017 according to the financial conduct authority. So you can just see this massive increase of Diy investment. Ok. Um So before you start investing there are, you could say three tests, three things you should think about. Um The first one is that you need to have a rainy day fund, ok.

Uh The, the basic rule and, and there are a few different rules, but the basic rule that you'll come across is that you need to have the equivalent of at least 3 to 6 months in income in an accessible account in case of an emergency. So if you're losing your job or if you're um if you have health related costs or major repairs or something like that, you, you need to have a rainy day fund that you can access very easily. The other major test that, that people tend to talk about is if you have any debt. So if you have outstanding um credit card balances, for example, it's usually worth paying these off first because they can cost you more than you could potentially make uh by investing. Ok. So this applies to, to kind of expensive short term debt. It doesn't typically apply to something like mortgage debt. But um yeah, credit cards, short term debt and the third test or the third consideration is your time horizon. So there's a very general rule of thumb, they tend to say you shouldn't invest in the stock market for less than five years. Ideally, um and in times where we have a lot of political and economic volatility. So a lot of uncertainty, uh they sometimes even say 7 to 10 years.

So the idea is that if you invest in the stock market and you know, the next day the market goes down, then you have at least five years for your investments to recover, or seven years for your investments to recover. Um Because that's on average, if you look historically, that's how long it might take. Um If you have a, you know, a stable diverse portfolio, that's how long it might take for it to recover. Um Because you have to remember that the stock market goes up and down, it moves in, in cycles. So if you think that you need to access your money uh in the next five years, if you're planning to buy a house, for example, uh then it's, it's best to stay with cash and just keep your um funds in a cash account. OK. So next, I wanted to talk about some basic uh basic terminology. Um So we've, we've seen that the stock market is simply a place where companies go to to raise market, right? The stock market. So listed companies go there to raise money both from people like us and from institutions like pension funds. For example, they take this money in order to grow and what they do in return is they sell shares of their stock.

So if you think about their stock as a sort of pie or cake, um then a share is like a slice of that cake. OK. So the, the stock is the cake and the share is the slice and they also call that equities. Um So there, there are times that sort of um refer to the same thing and a share can increase in value because it's popular, for example, because of, you know, demand and supply. Uh it can also mean that a company pays you dividends. Uh in addition to shares, companies and governments can also raise money through bonds and bonds are basically like loans. But instead of buying individual shares, let's say in, in, I know Amazon or bonds, a typical first time diy investor would usually buy investment funds. OK.

So what is a fund? Uh a fund? Think of it as a basket, like a basket of flowers, of a basket of um fruit. Um And you have various shares in this basket which is managed by a person, that person is called a fund manager. Um or it can also be managed by an algorithm or a computer. OK. So the the purpose of the fund is that it spreads your risk across many different shares, many different companies, sometimes also many different regions and um asset classes. So types of investment. Um And you could say that there are two different approaches to investing on the whole. The first one that I described. So where a person manages your basket of shares, that's the active approach to investing. Whereas the algorithm that manages your basket, that's the the passive approach.

And also if, if something is not clear, please feel free to um put it in the chat. I I hope it's, it's clear for everyone what I'm saying. So there's the active approach managed by human beings and the passive approach managed by algorithms and there are different types of um the passive approach, right? So uh very clear, I'm glad, thanks for your feedback, very clear, uh very good. Um So the passive approach can sometimes track an index. So if you think of the uh FTSE 100 in the UK or you think about the S and P 500 in the US, what a Tracker fund? So a passive fund, what it does is that it goes and it replicates the index and ETF S do a similar thing. So passive investing is referred to as Tracker funds and ETF funds. Um And, and why am I telling you about these two differences? Um One reason is that the passive approach tends to be cheaper on the whole. So the fees are, are much lower, you know, because you're uh paying an algorithm rather than a, a human, I guess essentially, even though humans are involved. But OK, um not get too much into the details of that. Uh But the main point is that research has shown that many professional investors don't actually outperform the market. So it can make sense to simply invest in a way that mirrors or that tracks the market.

And if you're interested in this, look up a bet that was made by Warren Buffett, he's one of the probably the most uh famous investor in the world um of Berkshire Hathaway. And he hatched a million dollar bet a few years ago with a money management company called Protege Partners. Uh He bet that over 10 years, an index fund which passively invests in the S and P 500 will perform better than five active funds picked by the company. And he won the bet. OK. So on average, um you could say that passive investment strategies uh cannot perform. And so if you want to look into that more, you should look into what's called Robo advisors or ready made portfolios, you know, they have different names depending on the country that you're in. Or if you want more of a hands on approach, then you can choose your own tracker funds uh or your own um active funds as well, depending on the platform that you go to. Um somebody's asking is active risk here. Uh No, you can't. Uh No, you can't really say it that way because there's a really broad range, both of uh the active funds that you have and the passive funds that you have. So depending on what they invest in.

Some markets are riskier than others and some strategies are riskier than others. So, both within passive, you have different levels of risk and within active, you have different levels of risk as well. Um And it's, if you want to look at the long term implications of investing, there's something called the Barclays Equity Guilt Study. I can put that into that was on my slides. I can put that into the chat. It's a long term study. Um, here we go. It's a very long term study. It looks at like 100 years, uh, and it looks at the average that equities have returned compared to if you had put your money into a simple cash account. So, based on that study, it's possible to say that over the past 50 years UK shares have returned uh about 6% per year on average. Whereas, you know, interest rates are currently um close to zero. So that's the Barclays Equity Guild study that's worth looking into. Um Another book you might have heard about is called Capital In the 21st Century by Thomas Piketty. Have you, have you heard about this book? Let me know on the chat. No. OK. So this book came out a few years ago and it was ok. No, no, no, mainly no one. Yes. Ok. Great. Ok. Fantastic. Well, it's a very scholarly tone. So, you know, maybe read a review of it. Um unless you really want to get into it then read the whole book. But um oh yeah, I can repeat the main name.

I can also put it into the chat. Hang on one second. I'm just copying from my slides. Ok. So the reason I'm mentioning this book is because it was a best seller uh by a French economist and he basically showed that capital that is invested. So whether it's in the stock market or in property grows faster than income. So, you know, most people, we rely on our income to live on. Uh But in a way, we won't be able to catch up with the wealth that's generated by a formidable flat or a share portfolio. That's because wealth grows quicker than the economy. So it's a structural characteristic of capitalism. Uh And, and the implications of that are really profound because there's a dominance of capital over income. That's basically the general argument. Exactly. That's the 700 patron. I have tried to summarize the main pieces for you uh right there. Um So it's not necessarily because of the labor market or because of people's, you know, shortcomings that creates wealth disparity as we know. Uh but it's in many cases, the good fortune of an initial endowment and I think in some ways also the barrier to um financial knowledge and there is a gender investment gap, for example, of course, there's also a gender pay gap and they all feed into each other um to some extent.

OK. So I've spoken about diy investing. So, uh you know, investing in listed companies through easily available online platforms, but there are other types of investment as well. So people who invest in early stage tech companies, for example, are called angel investors. Um and depending on the country that they're in, they have to prove that they have a certain level of income and acids. Um So I personally, I'm a diy investor, I'm not an angel investor, but I think that Diy investing is a very good place to start to learn more about the stock market. And I hope that each one of us reaches the level of wealth where we can all be angel investors. Um You know what I basically, my point is that we need to to start understanding the stock market in order to make changes in the long run. And I think Diy investing uh is something interesting for you to look into. So just looking at the, at the questions in the chat. Uh Great. Thanks for your comments. Um and now I wanted to end on one interesting statistic actually. So I'm a history buff. I'd like to take you to the 19th century and I wanted to ask you, what do you think the percentage was in 1840 of Britain's government investors who are female? So I'm going to put the question in the chat as well because it's a little bit complicated. Ok.

Ok. Ok. Please guess the percentage of Britain's so government bond investors, you know, a type of investors who were women in 1814? Zero. Ok. Two 10 two. Any other guesses? 000? Wow, zero. Ok. 11 fantastic fascinating. 00. Ok. With a male name, 5% love that. I like your thinking. It's a bit like with novelists, right, who wrote under a, a male pseudonym. But no, actually, I'm really glad you guessed in this way because the reality is there's almost 50% of them. Can you believe it? Um, almost 50% of government bondholders were women in 1840. And this, this is not a, a well known fact. It's something that's been uncovered fairly recently. Um, and when you think about history in general, you know, women were often involved in things and then were written out of history later on. Uh you know, you can think about other fields of society like art history. For example, we had some really famous uh painters in the impressionist movement, for example, Bert Marsau and she's not as well known as Benoit and Monet and other women in similar positions have been written out of history. So in some ways, the history of female investors has also been overlooked if you want to read more about it. I um have an article on this, on my website, I can, I can post it in the chat if you like.

OK, so if you want to read more about the history, because I think remembering the history of female investors and realizing that investment has not always been a man's world, you know, I think we can encourage more women to make a foray into investing um and be confident as investors.

If we think more about the fact that we've always been part of the investment world, right? Um And as I said before, I don't know your personal circumstances. Some of you might want to speak to financial advisors. Uh And some of you might want to read some other things. So there's another book I can recommend. Hang on. I'll just copy it from my slides. It's a, it's a really good place to start. This is the book and also there's a lot of journalism on this topic. So you could just Google Diy Investor Toolkit. And that's the right search term to, to find lots of articles on this topic. And if you want to follow me or stay in touch with me, these are my details. Um I'll be happy to connect with you and happy to hear from you. I hope you found this helpful, this crash course on investing. And I'm sorry, I couldn't find a way to upload my slides. Um Hope it wasn't too boring just looking at my face and yeah, I hope you enjoy the rest of the conference.