Financial coach Grégory Guilmin recently published “Bien débuter en Bourse”, a comprehensive guide helping people in their investor journey.
He talks to Silicon Luxembourg about the knowledge gap for new investors and the technology that is helping democratise investment.
Tell us about your investment background.
I did a PhD thesis on how to invest in the stock market between 2012 and 2015.
I did this for three reasons: my parents lost a lot of money in 2008 when they invested in two Belgian banks; my grandmother-in-law, who did not trust her financial advisor, asked me to invest €100,000; and between 2013 and 2015, I lost 60% of my capital on the stock market. I realised that these three different elements highlight an important aspect of my personality: I want to share my knowledge and skills. After my PhD, I worked for six years as managing director of a family office of 10 serving ultra-wealthy families, and then I decided to focus 100% of my time on financial literacy.
How did you transition to writing a book?
I created the learning platform “La Bourse: Make It Easy”. And then 18 months ago, Thibault Léonard from Mardaga Editions called me saying that he really liked my posts on financial literacy on Facebook and LinkedIn and asked me whether I wanted to write a book.
At the beginning, I said ‘no, I prefer doing workshops, podcasts and conferences. But, then I wrote the introduction and the first chapter and felt I had the energy to finish the book. I felt it was part of my journey on Earth to share my knowledge because in French-speaking countries we lack financial literacy.
What kind of investment foundation do you need to follow and benefit from the book?
My book is for beginners who do not know how to invest in the stock market or how it works, but also for people who have financial advisors, bankers, and private bankers and want to challenge them. It is also for people who can hold their hands up and say ‘I made some mistakes in investing. Let’s read about another approach to investing.’
What are the common mistakes that people make when starting out in investing?
Between 2013 and 15. I lost a lot of money by stock picking and investing in companies. That is why now I only invest through investment funds (passive and active ones).
When you do stock picking it is very difficult to beat the market. You have to get past your ego to see there is another way to invest that is more efficient in time and money.
In the book, you mention the new generation of brokers offering lower investing entry costs like Trade Republic and Degiro. But, cost isn’t everything, right?
The most important thing to consider is your needs. The second most important consideration is where your financial instrument custodian is. For instance, at Swissquote you have UBS and Deutsche Bank as custodian. It’s important to understand that your financial assets are not in the balance sheet of your investment platform but they are there elsewhere. Investors need to understand how this works in the event that your investment platform goes bankrupt.
If you go with BGL BNP Paribas, BIL, Swissquote or Trade Republic, you are covered up to a maximum of €100,000 in cash and €20,000 for the investment securities. Sometimes people believe that neobrokers that just came on the market are riskier. I don’t like Etoro because they are based in Cyprus and I don’t know if I am protected or not. But Trade Republic and Degiro are regulated by Bafin in Germany and Swissquote is regulated by the CSSF so has the same level of protection as traditional players.
Speaking of new players, and new technology platforms, what are the newest tech trends that are increasing access to this world for retail investors?
I would say the next trends will be an investment platform that aggregates all your wealth that is connected with the different investment platforms that you may use. A second trend will be a platform to share financial literacy. In Luxembourg and Belgium, the big banks don’t take the time to explain financial literacy to the younger generations because it takes time and there is no additional advantage for them in terms of sales.
The first platform sounds challenging to create. To what extent is it likely we will see such a tool emerging in the near-future?
It’s very difficult technologically and in terms of regulation and safety to have an exchange of information between investment platforms that are not all regulated by the CSSF.
But I have worked for 12 months as an independent consultant on two different projects [providing such a solution]. While it is not clear if these projects will be rolled out, people are working on them and I believe they will be able to do it.
What are the problematic trends that you’re seeing in terms of investor tech?
Investment platforms are developing applications that are like a casino. We understand that we lose money or earn money. But in fact, this oversimplification does not explain how the financial instruments behind it work. Some trading investment platforms use different colours and look like a game. But, investing your money in the stock market isn’t a game. This is a trend that appeals to the younger generations. You need 10-15 hours to educate yourself before investing in the stock market.
Where do you plan to go next with your training?
A new version of the book will be published in the coming weeks in which each chapter will have a 10-question quiz. It’s very easy to do with an e-learning platform. There will be a free video on how to navigate Degiro, Keytrade and Trade Republic. I would like to create a weekly newsletter regarding the stock market and make my own podcasts. But first I would like to find some sponsors. Third, I’d like to create a daily webinar for Money Week, discussing crypto stocks, the stock market, real estate etc. I work alone so I will have to select one or two projects. The goal is to create new channels to spread my knowledge.
“Bien débuter en Bourse” is available to purchase from Ernster, Amazon and FNAC.