ASX200 (XJO) 7000 here I come....

Discussion in 'Sharemarket News & Market Analysis' started by oracle, 30th Jul, 2019.

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  1. Nodrog

    Nodrog Well-Known Member

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    Perhaps the next major market downturn will be as a result of complacency rather than euphoria:confused:.

    Elliot will never be trusted again if his Waves turn out to be nothing more than a ripple:).

    But gee if the recent momentum keeps going Value Mgrs will be suffering more and more.

    However albeit there’s excitement over ASX at all time highs it’s been a terribly long time coming historically wise. Then again a news story headline of “after more than a decade ASX finally manages to break even” just doesn’t cut it:rolleyes:.

    My ideal scenario would be the zig zag of ASX vs US like prior to the GFC. That is US markets after a massive bull market revert leading to another lost decade and ASX takes off and our $AU with it after our lost decade. That would be very nice indeed for where I want to take our portfolio:).

    Did you hear that Ellioto_O?
     
    Last edited: 6th Sep, 2019
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  2. Nodrog

    Nodrog Well-Known Member

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    Our debt is zero at present. Tempted though to consider using around 5% of net worth (excluding home) leverage if an exceptional opportunity arose. Looking at getting setup soon actually. I had intended never to use leverage again but I don’t think I will be able to resist under the right circumstances.
     
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  3. willair

    willair Well-Known Member Premium Member

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    There will be no Elliot Bar Bell waves in my weather report Just a upward spiral..
     
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  4. Burgs

    Burgs Well-Known Member

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    Hi Big Al, are you still doing a bit of Dollar Cost Averaging into the market?
    You can always increase the $$$ if and when a significant down turn arrives.
     
  5. Snowball

    Snowball Well-Known Member

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    As a high quality borrower you’d likely be able to get a rate close to 3% I believe?

    That’s pretty damn attractive.
     
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  6. Nodrog

    Nodrog Well-Known Member

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    Only issue is we’re with NAB and the asset is PPOR (loan fully offset with cash) but it’s in my wife’s name. However the loan to purchase equities needs to be in both our names. Not sure if that’s possible as I’m out of touch with this area nowadays. Not interested in messing around too much as I’d rather not use leverage at all if it’s too hard.

    Anyhow I need to pull my finger out and see what is possible.
     
  7. Big A

    Big A Well-Known Member

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    Hey mate, not doing nothing at all at the moment. I am sitting on the largest pile of cash I have ever had just waiting.

    At some point between now and say jan / feb , one of two things will happen. There’s a correction of some sort and I pile all in. If it’s significant enough I will even add a small amount of leverage to buy big.

    If nothing happens by early next year then I will go back to the original plan which is a moderate fixed amount in every single month. What I will have to work out in this scenario is do I just hold on to the large pile and look for other opportunities outside of equities. Do I stick some
    Of that pile in equities while also doing the monthly thing. Or do I stick it all in even without the correct and then continue on my monthly buy in journey.

    I mean either way it won’t be life changing for me. My main investment income flow comes from the property trust holdings. Unless the property trusts all go to hell then short term what I do with the equities side is trivial. But I am keen for the equities side to become as large as the property trust portion.

    Will see how it pans out over the next few months.
     
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  8. Nodrog

    Nodrog Well-Known Member

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    If choosing not to DCA but waiting for an opportune time I’m more inclined to take the path of least regret. That is a bet either way. All or nothing can be a recipe for emotional extremes which I absolutely want to avoid.

    I’m a fan of indexing but again if looking for opportunity being open to out of favour active Mgrs provides more options. I’m confident your advisor is well aware of this and has no shortage of options to choose from:).

    Personally I’ve invested a sizable sum into the markets recently.

    As for property trusts seeming to be a standout to date there’s been a huge tailwind behind them in recent years. Similar for bonds / infrastructure for obvious reasons. Each asset class has its day in the sun but it won’t be the winner all the time. I tend to think there’s something to the concept of reversion to the mean!

    Best thing one can do in my humble opinion is to remove emotion and all or nothing mentality when it comes to investing. Otherwise the markets may eat you alive.
     
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  9. ChrisP73

    ChrisP73 Well-Known Member

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    @Nodrog as someone who's seen a few market cycles, I'm curious to know your opinion on specific asset classes that you see have struggled in recent years.
     
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  10. Froxy

    Froxy Well-Known Member

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    @Big Al curious why not hedge your bets like @Nodrog and @Snowball have hinted.

    If you think Jan / Feb is a likely time of market down turn, take 25% of your portfolio and average in between now and Feb, at any sign of weakness dial up the investment as you see fit.

    Otherwise you risk sitting on your hands while the market goes up or treads water for what could be any amount of time.

    Alternatively you could end up being right in which case ill return to delete my post!
     
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  11. Redwing

    Redwing Well-Known Member

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    The King is Dead , Long Live the King
     
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  12. Big A

    Big A Well-Known Member

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    You make a good point.

    I guess the reason I’m holding firm is firstly that’s what my advisor is recommending. And if I don’t take his advise on board then why have an adviser to begin with. Second of all a good chunk of the capital I have sitting on the side actually came out from equities back into to cash as recommended by the adviser. Now I’m not a fan of selling out to try and market time back in. But I wanted to get out of a few of the managed funds anyway that my original adviser put me in. So I figured I will get out of the managed funds I no longer want to hold and follow the new advisers lead and hold it in cash for now.

    Let me also say that while I am following the advisers lead I’m not doing so blindly. I agree with his views and believe all signs point to a correction. But well aware that just because there’s plenty of red flags waving it doesn’t mean a correction will happen any time soon.

    Either way I’m comfortable to wait it out a few more months. At least I’m still collecting 2% interest in the bank right now. Soon enough you won’t be able to even get 2% in the bank.

    But I do appreciate the feedback and options being suggested. Keeps me thinking and reviewing the strategy to ensure it still suits me or if there’s a better way forward.
     
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  13. Nodrog

    Nodrog Well-Known Member

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    I’ll think you’ll be terribly disappointed in my response. I’m probably as clueless as most others especially given the unique circumstances of this cycle with historically low interest rates and other central bank experiments.

    I invest only in local and global equity listed funds. I don’t invest in other asset classes such as property, infrastructure and bonds. Even then our local vs global equity asset allocation gets way out of whack relative to desired split at times given I go where I think value / income is. Basically I try to take a contrarian view. Not always easy to do. Some no doubt would likely consider our approach a shambles:). They’re likely correct.

    As an income investor maintaining perfect asset allocation and different correlations in an attempt to minimise volatility etc are of lesser interest. I have a desired split between local vs international but as mentioned it can get unbalanced at times. It’s more about each dollar invested adding that bit more income. Where can I buy that income stream cheapest. LICs of course sometimes offer up great opportunities in this regard.

    I suppose some areas that stand out as having struggled in recent years are value and ASX which could be considered to have experienced its lost decade.

    Trouble is I don’t think it matters how experienced / knowledgible an investor is (I’m only an amateur), the market has a habit of making most look like dills.

    The traditional approach to dealing with these issues as you are likely aware is to establish a desired asset allocation then if in say accumulation simply add new cash to the underweight asset class(s). I find this too restrictive for my income focused approach.
     
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  14. Big A

    Big A Well-Known Member

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    I like that one.
     
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  15. ChrisP73

    ChrisP73 Well-Known Member

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    Thanks - no disappointment at all. I'm biased towards equities and continuing with DCA per my desired asset allocation. But - I'm also building up some modest cash/credit reserves. Comparing asset class returns over the last 5-8 years with cash returns makes cash reserves an interesting option for a contrarian. Cash isn't an asset class but it does allow a patient investor to take advantange of (un)expected oppertunities. I know this probably goes against the dominent wisdom of not timing the market but I'm happy to follow my own path.
     
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  16. Nodrog

    Nodrog Well-Known Member

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    If I wanted to dramatically improve on my approach if I understand correctly @dunno as one would expect has an excellent system. That is 75% passive asset allocation driven with a contrarian element in global value which provides rebalancing opportunity. The combination of global hedged and unhedged also provides an opportunity to eek out additional performance. The other 25% appears to be slothful active? If incorrect hopefully he’ll correct me.

    Mine is more a loose Core / Satellite approach were for ASX an Index ETF and older large cap slothful LICs are the core with mid / small cap active Mgrs as the Satellites. For International a Developed International Index ETF is the core with active value / EM as the Satellites. There are set allocations for each but as mentioned earlier these can get out of whack at times if I can’t find decent opportunity. Likely far from ideal but it seems to have served me well over a long period.

    As for optimal performance wise I haven’t a clue, probably not. However as for me as an individual behaviourally wise it appears to have been optimal in that area to date. Does that mean I can’t do better? Of course not. Maybe I’ll get there one day:).
     
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  17. Nodrog

    Nodrog Well-Known Member

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    Know the feeling. The return is crap but it’s true value lies with its optionality and managing risk in tough times. However holding too much of it can be counter-productive. Then again we’re both retirees now. When there was ongoing employment income I generally invested the cash promptly. If exceptional opportunities arose conservative leverage was used rather than hoarding cash.
     
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  18. dunno

    dunno Well-Known Member

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    Hey @Nodrog, goal over next deacde+ is to get to 75% passive, but i'm only about 30% so far and some of that is VVLU which is a tilt rather than true passive. What I do suits me, but probably nobody else.

    Hi @ChrisP73

    I'm all for taking your own path, can I just ask a couple of questions about that path?

    What time frame are you investing for? The remainder of your life or do you a have a predetermined shorter goal?

    Have you quantified what the option value of cash is to you? If so, what is it and how did you arrive at it?

    ps, blame the questions on Nodrog tagging me into this timing oriented thread.
     
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  19. Nodrog

    Nodrog Well-Known Member

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    Well most times I drag you into a thread I learn something. Selfish I know but I make no apologies:). I could drag @SatayKing into the thread also but I don’t trust him anymore, he’s likely to tell lies:rolleyes:.
     
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  20. Nodrog

    Nodrog Well-Known Member

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    Gee assuming this is not all in Super and given the size of the portfolio and accumulated CG how will you manage CGT?
     
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