Here’s what you need to know today

• The US market was actually up 2.3% overnight, meaning in the past 5 days (since the market opened last Friday morning) it is down 1%. It puts some of those sensationalised headlines from earlier in the week in perspective.
  
  

• Alan Joyce’s year just got worse. The former Qantas boss found out he will be losing $9.26 million after a review commissioned by the Qantas board found mistakes he made as CEO meant he shouldn’t receive his full $11 million bonus.
  
  

• The Australian Federal Government announced plans to fund a 15% pay increase for early childhood workers in an effort to retain and attract staff. Aussie childcare stocks rose on the news, G8 Education was up 2% yesterday and Embark Early Education was up 3%.
  
  

• Novo Nordisk shares fell 8% after a disappointing quarterly earnings result. The maker of Ozempic and Wegovy reported sales grew 25% and operating profit grew by 19%, both lower than the market expected. The share price is still up 374% in the past 5 years.
  
  

• Sometimes the stock market expects a lot. Reddit reported a 51% increase in daily active users and a 54% increase in revenue. That wasn’t enough for the market, as Reddit shares fell 9% as investors worried about a weak advertising market and that insiders could start selling shares as their post-IPO lockup period ends today.
  
  

• This quarter has seen a number of travel stocks share slower-than-expected forecasts for the coming quarter. Airbnb was the latest, which saw its share price fall 14% after reporting “some signs of slowing demand from U.S. guests.” When people are feeling the pinch economically, travel is one of the first things to go.
  
  

• And finally, while not related to business and finance, we have to celebrate Australia’s golden night in Paris on Wednesday. After winning 4 gold medals, our tally reached 18 - making it our most successful Olympics ever. We love to see it!

What the…?

Is mayonnaise the key to unlock nuclear fusion? You read that right, in perhaps our most fitting ‘What the…?’ yet, scientists at Lehigh University believe the way mayonnaise acts like a solid but when subjected to pressure begins to flow mirrors the behaviour of plasma under similar conditions.

They think it may help solve Rayleigh-Taylor instability without the need for extreme temperatures and pressures that would be required to study plasma.

Investing is a lifelong journey

Here’s what you can learn today.

Why ‘timing the market’ is a fool’s errand

After the market fall at the end of last week and the start of this week, many investors are probably thinking “should I sell now and buy back in when the market is lower?”

Our two cents: no. You don’t know where the market will go from here (as the last few days have shown us). Many investors of past market falls have missed out on the recovery in a failed attempt to time the market. They tried to wait out the fall only to realise they waited out the come back as well.

This article from Betashares goes into more detail on why it is so hard to time the market. The biggest problem, as their research shows, is that many of the largest stock market rallies come soon after a major stock market crash. And investors trying to time the market don’t have the time or the foresight to get back in.

Which is why study after study, time after time tells us the same thing. Long-term investors that leave their portfolio alone (or dollar cost average in more) end up doing better than those that buy and sell in an attempt to time the market. It’s not just the transaction costs that make the buying-and-selling a losing strategy. It is that no investor, professional or otherwise, has shown themselves to be able to perfectly time the market.

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