International Is anyone moving from international shares due to North Korea vs US problems?

Discussion in 'Shares & Funds' started by wylie, 10th Aug, 2017.

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  1. wylie

    wylie Moderator Staff Member

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    I asked about what shares would do under Trump, and I watch them regularly now as our superannuation is held mostly in international shares. The balance has dropped, risen, dropped, risen... just like normal. So the change in power in the US didn't change the (generally) upward trend.

    However, yesterday after seeing the North Korea vs US "shirt fronting" I'm wondering if anyone is moving out of international shares and into something safer.

    We have no "end time" and could easily leave our superannuation in a high risk area for say five to 10 more years. But if the North Korea shirt fronting escalates further, and it comes down to military action, I'm wondering what happens to the share market?

    I know I can change tack and put it into a different area within superannuation, and I'm starting to think I might just do this until things settle down.

    I know it is my call, and I'm not asking for "advice" but I'm curious to know if anyone else is concerned enough to move out of high risk international shares?

    Or... is anyone on a shares forum? Is anything being discussed there about this?
     
    wylie, 10th Aug, 2017
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  2. sharon

    sharon Well-Known Member

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    Wow - interesting thoughts. I haven't really looked at what happened to the Aust and US sharemarkets during the last world wars. That is something I would be interested to learn more about.
     
    sharon, 10th Aug, 2017
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  3. sharon

    sharon Well-Known Member

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    sharon, 10th Aug, 2017
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  4. ACMH16

    ACMH16 Well-Known Member

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    Question 1:
    Will these events result in the value of your super falling to zero forever?

    Question 2:
    Are you reliant on your super having a certain minimum value?

    If yes to 1, sell everything and convert it to guns, ammunition and non-perishable supplies, although you may have difficulty holding these assets unless your SMSF is set up very carefully.

    If no to 1 but yes to 2, consider converting some proportion of your super to a less volatile class, not because the value of the shares is particularly likely to fall soon but simply because you need a less volatile portfolio. Seek specific advice on how much and what.
     
    ACMH16, 10th Aug, 2017
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  5. Biz

    Biz Well-Known Member

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    Not sure but I think if something does happen it will be over with very quickly regardless.
     
    Biz, 10th Aug, 2017
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  6. Nodrog

    Nodrog Well-Known Member

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    Well US Futures aren't suggesting that too many over there are concerned about it:
    Premarket Stock Trading - CNNMoney

    Mind you investors are probably a little too relaxed about a lot of things in general at the moment.

    That said, I've no intention of reducing our International exposure. Admitably I'm not adding much lately but should the **** hit the fan I will do as usual and progressively average in becoming more aggressive as gloom turns into fear turns into despair ... .

    The important thing is to be "mentally" prepared and have a plan whatever that means for you. I assume you're sensibly diversified?

    It might sound corny but at such times I like to remind myself of Buffet's saying: "Be fearful when others are greedy and greedy when others are fearful"! But don't think this is easy even for the experienced.
     
    Last edited: 10th Aug, 2017
    Nodrog, 10th Aug, 2017
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  7. Ross Forrester

    Ross Forrester Well-Known Member

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    When you are considering the sale of your US shares don't forget to factor in the cost of taxation on the sale. If you will incur, say 12% of the sale proceeds in tax, when you sell shares to re-invest in other investments you have lost 12% of your investment.

    It is not the only factor (of course) but potentially a significant factor.
     
    Ross Forrester, 10th Aug, 2017
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  8. The Falcon

    The Falcon Well-Known Member

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    Best turn off the TV / Facebook etc and dont create tax events that cause real costs based on media. Every single year you could find a widely reported reason to sell your international or australian stocks.
     
    The Falcon, 10th Aug, 2017
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  9. Nodrog

    Nodrog Well-Known Member

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    Only one:D?
     
    Nodrog, 10th Aug, 2017
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  10. Marg4000

    Marg4000 Well-Known Member

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    Depends on your priority.

    Growth or capital security?
    Marg
     
    Marg4000, 10th Aug, 2017
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  11. Nodrog

    Nodrog Well-Known Member

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    Which may suggest that this investor has too much in Shares for his / her risk tolerance and / or financial circumstances in the first place?

    If overseas markets tank ASX will likely follow suit and with our dollar being a risk on currency it will potentially falling harder. Hence unhedged International is what I favour.

    Not advice of course.
     
    Nodrog, 10th Aug, 2017
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  12. wylie

    wylie Moderator Staff Member

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    These shares are held within our superannuation fund, so I don't think there is any cost in moving from say, international shares to something that is safer will be specified.

    I understand that if we were down $100k on the peak of our holding, that moving from international shares to something safer would mean we would be crystallising the loss, but we wouldn't be hit with fees would we? We are just in that "pot" called "international shares".
     
    wylie, 10th Aug, 2017
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  13. wylie

    wylie Moderator Staff Member

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    I'd say the shirt fronting going on right now could lead to nuclear warheads being fired etc etc. That is (in my mind anyway) a little bit more or a concern than some other widely reported "everyday" reason why stocks rise or fall.

    If we end up being dragged into a war, I'm guessing that is a bit worse than a normal "blip"?
     
    wylie, 10th Aug, 2017
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  14. wylie

    wylie Moderator Staff Member

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    Right now, our superannuation equals our debt. So where for many years it was "set and forget", it looms right now as a very important part of our strategy to be able to live off rents.

    We already live off rents, and I've never been nervous about having our superannuation in a "high risk" area but the fact it could pay off our debts "today" makes it a more important back up plan than ever before.

    If I wanted just "capital security" I could right now (today) move it to something much safer. I just hate the idea of giving up the growth.

    I've been watching more closely since the US election and happy to leave things as they were but two leaders who both won't back down make me a little nervous.

    One idea I have is that I could move it to a more secure, very low risk area within our fund and then if this threat passes, move it back. I can move it once a month. I doubt many people actually move things around, but it is an option I'm thinking of doing to preserve it until the shirt fronting finishes.
     
    wylie, 10th Aug, 2017
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  15. Zenith Chaos

    Zenith Chaos Well-Known Member

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    Currently Australian dollar is high and awaiting a fall. Good time to buy not sell international.
     
    Zenith Chaos, 10th Aug, 2017
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  16. Brady

    Brady Well-Known Member

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    If nuclear warheads are fired, I would suggest it all doesn't matter too much.
     
    Brady, 10th Aug, 2017
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  17. Ross Forrester

    Ross Forrester Well-Known Member

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    Hi Wylie. It is different if the shares are in a superannuation environment. I vaguely recollect from a previous post that your SMSF was in pension phase.

    This will mean that if you sell the shares you will not incur a tax liability as a result of the sale. Likewise the resultant capital loss cannot be used - but this is all dependent on the size of your fund and whotnot.

    I am being deliberately vague as the options are increasing massively if the fund is big.

    If the fund is in pension phase, all assets qualify as pension assets, then the sale will not attract tax.

    You will incur fees from licensed financial product advisors associated with the sale.
     
    Ross Forrester, 10th Aug, 2017
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  18. Brady

    Brady Well-Known Member

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    @wylie haven't you been down this path before, paying down the debt from super.

    I think you're looking for a reason to pull the trigger and pay off the debt
     
    Brady, 10th Aug, 2017
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  19. Marg4000

    Marg4000 Well-Known Member

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    There is the answer.
    Growth is more important to you.
    Or, as I seem to be fond of saying, have an each way bet and transfer half to a safer option.
    Marg
     
    Marg4000, 10th Aug, 2017
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  20. wylie

    wylie Moderator Staff Member

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    We are still in growth phase. In 18 months hubby turns 60 and we could pull the larger of the two funds out tax free. We don't plan on doing that, but it is an option.
     
    wylie, 10th Aug, 2017
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