Just went 95% cash in Super - Share Market Correction

Yes, you clearly have some special secret sauce.

Out of curiosity, all of the dollars that you and your clients invest in these inverse future ETF's. Can you let me know what you do with this money for the 90% of the time your charts don't tell you the markets are about to pop?

And over a long period of time. Have you demonstrated this dynamic hedging adds greater RARE than simply keeping the FUM in bonds and rebalancing?

 

Simon, if you want, i'm happy to send you some peer reviewed academic research about these methods. Saves you doing the backtesting yourself. If you PM me I can send you a couple from my treasure trove.

 

Dow bounced back strongly overnight. Damn. Was hoping to buy more today.

 

Hi Gormy yes I quite like Hostplus. Great to hear from another Hostplus contributor. I originally tried Choiceplus with intention of buying into their 3 LICs etc but comparing the increased costs, the likely dividend/franking credits did not come near the published returns from their Balanced fund. I have my 4 year safety buffer in place so am very happy to keep it simple and leave them with the investing decisions, when to enter or leave market, what investments to be in, etc. I still have those normal investing decisions to make about which bucket (super accumulation, super pension or personal name for my investments outside super. Also been looking at another bucket for family investment company but that might complicate things

 

I think the GFC was a very good lesson (for me) not to be caught up in the hype, and to be patient...wait for a sustained period of dips, then buy in.

If the market drops further, I'll DCA down. The shares I'm buying will be keepers and are being purchased for dividends.

 

Sorry but according to accepted wisdom aren't you supposed to buy high, sell low or have I got it the wrong way round?

 

I see.

Hopefully you understand, and I hope this does not come as a shock or surprise ...that peer reviewed academic research on market timing mechanisms is (from reputable finance journals).. is ... based on actual data, actual data from actual financial markets, using actual market timing mechanisms.

Are you suggesting your actual data or backtesting is superior to that obtained, scrutinised and backtested by finance academics?

If I sent you various, peer reviewed studies on market timing mechanisms, are you suggesting you would dismiss the findings and the material because you have completed some research yourself and drawn a different conclusion?

 

There has been a lot of media advice individual investors should move completely out of the market and hold liquid cash equivalents ,not the advice I take seriously but when you look at % within this post that has sold paid brokers tax then in after tax dollars a 3 % loss is just experience ..

 

Yes, tough decisions, especially if the market turns back up and stays around there for 12 months (the time frame that Sash has set for himself to buy back in).

OK nobody knows the future and Sash’s bet may well turn out a winner, so this isn’t a criticism of him, more like an expression of my limited capacity for risk.

My take is that by increasing the number of major decisions you have to make you’re forcing yourself into making a big bad one at some stage. Timing is an art that very few people get right all the time, and to get it right once doesn’t guarantee you’ll get it right the next time around.

To bet 95% of your share fund in this way is a very bold move indeed, hats off. It may be OK as a one off in exceptional circumstances, but to be tempted to do it at every market correction would exponentially increase your chance of being wiped out.

Disclosure: I bought a small chunk of LIC yesterday, not as a bet on prices but to lock in some dividends that got cheaper.

 

Good post @Simon Hampel. When markets are volatile it's easy to get caught up in the madness of the markets. My personal strategy is not to sell, so I won't be selling anything

 

I don’t worry when people start selling.

It is only when they stop buying that I get concerned!!!!

 

So that I provide context.

This was a measured move...I evaluated how much I would lose in CGT...about 2-3k all up I am down 3%.

I moved it to cash.....I will only get about 2-2.5% returns over the next 6-12 months.

The risk...is definitely there for a market correction based on how long the US market has gone and the trade war.

By the way the ASX is still down today...I reckon we have not seen the end of the volatility......dems how I roll...... "Who Dares Wins"

 

Yes ive seen his portfolio and not tax returns

He is moving funds into property

 

What/where is he buying?

 

Not a problem Sash, to each their own. Due to my timidity and slow reaction time I had to find an effective strategy that didn’t require me to dare too much (investing for income).

Sometimes I look in awe at people chasing price gains as the emotional capital they spend is beyond my capacity.

 

I don’t know about that @truong. Underneath it all I still think there’s a desire for boldness and speed:

 

No emotions...just business....have to preserve what I have.

I saw people get out too late in 2007-2008...they had their portfolios wiped out by 40%....they held on ...but in some instances had to delay retirement. In 5 years they were ahead...but....the closer you are to retirement the more nervous people will get.

I am quite diversified...this is only my super. I have left my smaller share investments intact.

I have also left the smaller employer fund as is (too money out to put into main fund already) and with DCA it should be okay.

 

Being retired I don't like to think of a major hit to my capital so I moved to cash in mid July with the ASX 200 around 6250.

I thought the increasing Trump trade tariffs were going to end badly and I was safer out of it.

At the moment I am happy to stay out of the market, at least until I get a feel for the likely impact of the USA mid term elections. I can't see the markets rushing up again with future interest rises likely.

When I am less negative about markets the plan will be to move back into shares at around 10% a month until I get back to my long term preferred mix of 75% shares 25% cash.