what $2.5m+ investors are doing differently (and how you can copy it)

**Glen James** (0:06)
Hey, everyone, today on this special bonus episode, we're talking all about investing. Now, I love investing, you love investing, everyone loves investing, everyone gets an investing candle. But before we get to our discussion today, this bonus investing episode is brought to you by CMC Invest. Access shares, ETFs and crypto, all in the one award-winning app.
Invest better today. Visit cmcinvest.com. General advice only, crypto is unregulated and high-risk. T's and C's apply. Now, I am today joined by Fraser Allan, Head of Premium Client Management at CMC Invest. And Fraser, you look after Australia and New Zealand.

**Fraser Allan** (0:48)
Do indeed, yeah. Across the premium client brand. So we look after all the high-value clients and try and provide a more personalized and bespoke relationship for them. And a bit of help along the way as well.

**Glen James** (1:00)
What would you say, like in your, because I want to get into some gossip today of what the high-net-worth individuals are investing in. What's a high-value client to you? Like, is it a number, are they wholesale clients? What's that look like?

**Fraser Allan** (1:14)
Yeah, it's a good question. So we have a range of different criteria. One is based around the value of their holdings. So anything over two and a half million, or if they pay us a certain amount of brokerage per year, or as you mentioned, anyone who's a wholesale investor as well.

**Glen James** (1:28)
Yeah. So look, we're going to get into a lot of fun today. And again, I want to get some gossip out of Fraser, because it's always fun to see what maybe some of the wealthier people are doing with their investing. But I just wanted to kind of set the scene, whet our whistle a little bit.
What do you reckon is the biggest myth with investing that you like to bust?

**Fraser Allan** (1:50)
I think one of the biggest things we see is clients trying to pick tops and bottoms of markets or finding that one perfect stock or the perfect ETF.
Successful investing is more around time in the market, diversifying, staying disciplined. If you think about professional portfolio managers, asset managers, they're not trying to maximize returns all the time. They're trying to reduce risk. There's a lot of literature out there if you wanted to learn about portfolio theory, even just at a high level, that it's designed to generate the highest returns at an acceptable risk level or lower in risk at the same time. They'll be trying to beat an index or beat a benchmark rather than trying to find 20, 30, 40 percent returns in a year because it's a simple risk and return curve or a line there. The more you're looking to make, you have to accept that there's more risk involved in that as well.

**Glen James** (2:47)
Yeah, and a lot of the investors, you know, we're primarily personal finance, you know, people that money money money. Well, I am like I'm a personal finance guy.
Life isn't a spreadsheet and, you know, someone can borrow money at 6 percent. We know that we can invest it and maybe get 8, 9, 10 percent. The spreadsheet says it's fine and it's doable, but that risk thing is just often forgot about completely.

**Fraser Allan** (3:14)
Yeah, absolutely. And having the funds ready available if you need them, right? So I think, especially for people starting out, you know, understanding that if you've got money invested in the market, it's still liquid, but there are going to be downturns as well. You know, markets don't just go up in a straight line.

**Glen James** (3:30)
Yeah.

**Fraser Allan** (3:30)
So making sure that whatever you do invest is essentially risk capital that you're willing to set aside.
If you starting to, you know, borrow against your home or take loans, then, you know, there's an obligation that to service that as well. Yeah.

**Glen James** (3:45)
Now, when it comes to investing, what do you reckon makes a successful investor in your mind?

**Fraser Allan** (3:51)
So I think from adding on for that, you know, the portfolio managers do, right, looking at what professionals do. But really, it's about having a defined thesis, having a plan, understanding what your goal is, is probably the first and most important thing. A lot of people just throw money at the market and hope that's going to be enough. But having a plan, understanding, you know, where your investment horizon is, is really important as well, because that will completely define what's in your portfolio and where to balance that.
Being active, so, you know, I hate the term set and forget. I think that's just, you're not maximising the money that you're investing, basically. So being dynamic, understanding that you do need to reweight your portfolio, accept losses, because they will come as well, keeping emotions out of it, and really just stick into that plan, it's really important.