Is it time to change my super preference?

I changed my super from balanced to higher risk after the GFC. Considering what's going on in China and the end of the boom should I be considering changing it back to balanced lower risk for a while?

 

I did just two weeks back ...from High growth Australian equity to balanced one.

 

Changed around a week ago, from 100% shares to 25% shares, rest into other asset classes.

 

It depends if you think the risk is greater than the potential gain.

 

I'm not a financial advisor but I think if you are not touching your super for the long term then you can leave it in higher risk and if you are touching it within the next 5 years then leave it in balanced. I'm pretty sure it actually has a cost to you each time you switch even if the super fund is not overt about it.
Of course, I'm no expert so seek professional advice for your situation.

vtt

 

No way am I clever enough.

Im in high risk but I don't mind a bit of volatility. I'm pouring money in every fortnight, its good for the share component to dip whilst I'm doing this. (No?) Not planning to touch it for 30 years.

 

High risk and head in the sand.

 

Depends. Generally the older you are the less risk you will seek and vice versa.
my super is aggressive growth allocation and I dint mind bear markets because that means I'm buying more of the asset with monthly contributions. And when things turn to a bull market, I'm rich (in dollar terms)even with smaller % market increases.
It all depends on age and risk profile...super, like property, is a long term game and I generally only change from one allocation to another when I've hit a certain age or my risk profile has changed ..Not based on what the market is doing at that time.

 

Warren Buffett, a living legend in share investments has some pithy rules:

http://www.ruleoneinvesting.com/blog/warren-buffet-quotes-on-investing-success/

Particularly relevant is:

“Rule No. 1: Never lose money. Rule No. 2: Never forget rule No.1”

If you cannot afford to lose, then switch to a less risky investment for the time being. Earn less but also less risk of losing.

No one can consistently time accurately for the exit or entry into an investment of shares. If the investor can, then it may be potentially a Madoff ponzi scheme. (I avoided an investment that was too good to be true - historically always up or stagnant, never down! It was an investment based on Madoff's investments.)

Even blue chip shares are affected, eg CBA and TLS. It does not mean that you panic but it means keep the allocations to risk manageable. The perspective is in the context of your portfolio of investments, allocation and stage of life.

Take care!

 

My two cents: if you switch over now you could risk selling at the bottom. Which, for the record, is what most investors do in the share market. Buy high and sell low.

Its best to find a strategy that suits your temperament in all market conditions (e.g. during this volatile patch) and you can stick to it long term. If its a bit less risky, so be it. Just try not to chop and change too much, because that will lead to underperformance

 

I think it is a good idea to sell out of stocks now and wait until the future is certain and there is no volatility in the market. Perhaps wait until the market reached all time highs before entering again. Then when the market crashes again you need to sell out of stocks and wait for good conditions to re-enter. Remember Buffett says don't lose money!

http://www.motivatedmoney.com.au/mysay.php?iid=y8erd373zb

 

Great advice Falcon

 

Sell out and consolidate losses?

 

Your biggest decision will be which of your houses you choose to move into!

 

I don't see why anyone here - who is contemplating becoming a property investor - would be thinking too hard about plowing money into Super.

I mean; it's almost completely linked to the Sharemarket; which can tank to almost zero as we have all seen, and imagine it that occurred the day before you get your pay-out?

No thanks.

Yes; continue with the Employer Contribution Super - but I wouldn't be salary sacrificing anything into the thing...just the absolute bare minimum required.

I only ever think about Super as a forced savings account, ad hopefully there's a nice little extra bonus at retirement age.

It's the investment for the masses who are too lazy to get off their backside and become a real investor - that's why they've forced us Employers to fund their bloody laziness..

No; I'd rather back myself and keep on investing in property, and create and control my own retirement funds....

Maybe run yer own SMSF and use it to buy properties.

 

....what are you referring to? When has the sharemarket as a whole ever gone to almost zero?

Even with all the recent extreme falls, the ASX is down about 6% for the year when dividends are taken into account.

And that's just the ASX. If you're a sensible investor (which I grant most Australians may not be) you should be exposed to the international markets. These have returned around 25% per annum over the last three years, in AUD terms.

Even given the recent falls of the Chinese sharemarket, which is incredibly speculative compared to most of the world with very low levels of institutional money - this market is still up almost 40% for the year.

Of course, if you listen to all the media hype, and decide to sell out at this point and don't buy in again until the market is much higher - then yes, your returns will be very poor. If you can tune out the media hype, you'll do just fine in the sharemarket.

 

I've seen a decent number of years of neg growth in Super over the last 30 or so.

It may do well; it may do badly.

It is not controllable - who here wants to have no control and take a chance on a hope?

As I said; we can all do better on our own.