Our latest FMA Investor Profile features Rory Lynch, a 27-year-old Product Owner at a large tech company and powerlifting coach in his spare time who takes a data-driven approach to investing.
While completing a finance major during university, it dawned on Rory that he ought to start thinking about his financial future and putting his education to good use. This seeded the start of his investing journey and he’s taken a self-directed, data-driven approach to investing ever since.
Other than having KiwiSaver in an aggressive fund, Rory opts to invest mainly in exchange-traded funds (ETFs) made available through Smartshares, an ETF retailer operated by the New Zealand Stock Exchange. “I use Smartshare’s monthly investment option to invest in a small pot of ETFs, with a particular focus on the Asia Pacific region.”
While Rory admits that the world of cryptocurrency is enticing, he keeps crypto to a small part of his portfolio, and more so out of interest in the technology than to speculate on short-term gains.
"I try to hold cryptocurrency at about 10% of my total portfolio, but it can grow so fast that it can end up disproportionately larger than that.”
Slow and steady wins the race
Rory has previously gone through periods of active trading, but now describes his style of investing as taking the lowest cost and most passive approach. He looks for things like historic returns, risks and correlations with his existing asset portfolios – but has learned to be efficient with how much time he spends on investments and doesn’t obsess over details.
“Day-to-day, you’ve got a limited amount of time and energy and you should choose what things in life are important to you."
As a self-directed investor, Rory takes a few measures to protect himself including keeping a diversified portfolio and sticking to a risk profile he can stomach. Rather than exposing himself to different foreign currencies, he sticks largely to the New Zealand dollar and takes a dollar-cost averaging approach, investing roughly equal amounts spaced over regular intervals.
Above all, he lets numbers do all the talking.
“I’m a very data-driven person and don’t trust most people to be well-informed!”
Lessons learned through investing
The ultimate lesson he has learned over the years? Try as you might but you can't time the market.
“Having a formal finance background, I’ve taken the time to read literature on investing gains and have run the maths on some investing strategies. It’s led me to believe that trying to time the market is ultimately futile. In reality, the majority of active traders have inconsistent returns and its silly to think as a recreational investor that I can do better than that.”
*The views and opinions expressed above are those of the interviewee and do not necessarily reflect the views or official position of the FMA.
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