Economist Shane Oliver’s advice for investors: follow these simple rules for optimum results
After more than 40 years observing and commenting on the Australian economy, Dr Oliver says there’s a key pathway to growing wealth when investing in shares
3 min
AMP chief economist and head of investment strategy, Dr Shane Oliver has amassed vast knowledge over four decades in the financial field, yet his key tips for average investors centre around keeping things very simple. Create a long-term plan and stick to it. Invest in a mix of high-quality assets including bonds, shares and property. Don’t follow the crowd. Use the magic of compounding by reinvesting your returns. Don’t invest in products or companies you don’t understand. And maintain an optimistic view.
“We have a knack for overcomplicating investing,” Dr Oliver says.
Buying quality assets at good prices (determined by looking for low price-to-earnings ratios and high dividend yields with shares) and holding for the long term is a simple approach that works, Dr Oliver says.
“The cheaper you buy an asset the higher its return potential. Flowing from this it follows that yesterday’s winners are often tomorrow’s losers – as they get overvalued and over-loved.”
Diversifying investments is crucial. Lower-risk assets like cash and bonds give investors comfort but lower returns. So, growth assets have to be in the mix. He also notes that compounding interest “is key to growing wealth”. Dr Oliver says a dollar invested in Australian cash in 1900, with interest earnings reinvested, would be worth about $259 today. If it was invested in shares, with dividends reinvested, it would be worth $879,921.
“Yes, there were lots of rough periods along the way for shares, but the impact of compounding returns on wealth at a higher long-term return is huge over long periods. The same applies to other growth-related assets such as property.”
Fear stops many investors from even getting started, and fear can drive panic in financial markets when economic crises inevitably occur. “Much has happened over the last 40 years with each new crisis invariably labelled ‘unparalleled’ and a ‘defining event’ …” Dr Oliver says.
He’s witnessed the 1987 crash, the recession Australia “had to have” in the early 1990s; the tech wreck in 2000; the GFC in 2007/2008; and the pandemic. Despite such events, ASX shares have delivered positive returns in roughly eight out of 10 years since 1900.
“So, getting too hung up worrying about the two or three years in 10 that the market will fall risks missing out on the seven or eight years when it rises.”
When it comes to investor psychology, Dr Oliver puts it plainly: people can get irrational. This causes many stocks to rise well beyond what they are fundamentally worth. Dr Oliver says investors tend to look for evidence that confirms their views (‘confirmation bias’), become overconfident when influenced by ‘the crowd’, and have a lower tolerance for losses than gains.
“While fundamentals may be at the core of cyclical swings in markets, they are often magnified by investor psychology if enough people suffer from the same irrational biases at the same time,” he says. “This ‘safety in numbers’ approach is often doomed to failure. The problem is that when everyone is bullish and has bought into an asset there is no one left to buy but lots of people who can sell on bad news.”
Dr Oliver says investors need to know themselves and manage any psychological weaknesses.
“It’s also about knowing how you would react if your investment just dropped 20% in value,” he says. “If your reaction were to be to want to get out, then you will either have to find a way to avoid that as you would just be selling low and locking in a loss or if you can’t then you may have to consider an investment strategy offering greater stability over time and accept lower potential returns.”
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The lunar flyby would be the deepest humans have traveled in space in decades.
4 min
It’s go time for the highest-stakes mission at NASA in more than 50 years.
On April 1, the agency is set to launch four astronauts around the moon, the deepest human spaceflight since the final Apollo lunar landing in 1972.
The launch window for Artemis II , as the mission is called, opens at 6:24 p.m. ET.
National Aeronautics and Space Administration teams have been preparing the vehicles to depart from Florida’s Kennedy Space Center on the planned roughly 10-day trip. Crew members have trained for years for this moment.
Reid Wiseman, the NASA astronaut serving as mission commander, said he doesn’t fear taking the voyage. A widower, he does worry at times about what he is putting his daughters through.
“I could have a very comfortable life for them,” Wiseman said in an interview last September.
“But I’m also a human, and I see the spirit in their eyes that is burning in my soul too. And so we’ve just got to never stop going.”
Wiseman’s crewmates on Artemis II are NASA’s Victor Glover and Christina Koch, as well as Canadian Space Agency astronaut Jeremy Hansen.
What are the goals for Artemis II?
The biggest one: Safely fly the crew on vehicles that have never carried astronauts before.
The towering Space Launch System rocket has the job of lofting a vehicle called Orion into space and on its way to the moon.
Orion is designed to carry the crew around the moon and back. Myriad systems on the ship—life support, communications, navigation—will be tested with the astronauts on board.
SLS and Orion don’t have much flight experience. The vehicles last flew in 2022, when the agency completed its uncrewed Artemis I mission .
How is the mission expected to unfold?
Artemis II will begin when SLS takes off from a launchpad in Florida with Orion stacked on top of it.
The so-called upper stage of SLS will later separate from the main part of the rocket with Orion attached, and use its engine to set up the latter vehicle for a push to the moon.
After Orion separates from the upper stage, it will conduct what is called a translunar injection—the engine firing that commits Orion to soaring out to the moon. It will fly to the moon over the course of a few days and travel around its far side.
Orion will face a tough return home after speeding through space. As it hits Earth’s atmosphere, Orion will be flying at 25,000 miles an hour and face temperatures of 5,000 degrees as it slows down. The capsule is designed to land under parachutes in the Pacific Ocean, not far from San Diego.
Is it possible Artemis II will be delayed?
Yes.
For safety reasons, the agency won’t launch if certain tough weather conditions roll through the Cape Canaveral, Fla., area. Delays caused by technical problems are possible, too. NASA has other dates identified for the mission if it doesn’t begin April 1.
Who are the astronauts flying on Artemis II?
The crew will be led by Wiseman, a retired Navy pilot who completed military deployments before joining NASA’s astronaut corps. He traveled to the International Space Station in 2014.
Two other astronauts will represent NASA during the mission: Glover, an experienced Navy pilot, and Koch, who began her career as an electrical engineer for the agency and once spent a year at a research station in the South Pole. Both have traveled to the space station before.
Hansen is a military pilot who joined Canada’s astronaut corps in 2009. He will be making his first trip to space.
Koch’s participation in Artemis II will mark the first time a woman has flown beyond orbits near Earth. Glover and Hansen will be the first African-American and non-American astronauts, respectively, to do the same.
What will the astronauts do during the flight?
The astronauts will evaluate how Orion flies, practice emergency procedures and capture images of the far side of the moon for scientific and exploration purposes (they may become the first humans to see parts of the far side of the lunar surface). Health-tracking projects of the astronauts are designed to inform future missions.
Those efforts will play out in Orion’s crew module, which has about two minivans worth of living area.
On board, the astronauts will spend about 30 minutes a day exercising, using a device that allows them to do dead lifts, rowing and more. Sleep will come in eight-hour stretches in hammocks.
There is a custom-made warmer for meals, with beef brisket and veggie quiche on the menu.
Each astronaut is permitted two flavored beverages a day, including coffee. The crew will hold one hourlong shared meal each day.
The Universal Waste Management System—that’s the toilet—uses air flow to pull fluid and solid waste away into containers.
What happens after Artemis II?
Assuming it goes well, NASA will march on to Artemis III, scheduled for next year. During that operation, NASA plans to launch Orion with crew members on board and have the ship practice docking with lunar-lander vehicles that Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin have been developing. The rendezvous operations will occur relatively close to Earth.
NASA hopes that its contractors and the agency itself are ready to attempt one or more lunar landing missions in 2028. Many current and former spaceflight officials are skeptical that timeline is feasible.
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