Just went 95% cash in Super - Share Market Correction

Discussion in 'Sharemarket News & Market Analysis' started by sash, 25th Oct, 2018.

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  1. kierank

    kierank Well-Known Member

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    Today?
     
    kierank, 12th Jun, 2020
    #861
  2. skater

    skater Well-Known Member

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    Apparently!
     
    skater, 12th Jun, 2020
    #862
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  3. RoadRunnerPerth

    RoadRunnerPerth Active Member

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    Yes, today is likely to drop, however I am not too worried about day-to-day fluctuations; I am more interested in what happens when any perceived negative news of government intervention becomes public.
     
    RoadRunnerPerth, 12th Jun, 2020
    #863
  4. wylie

    wylie Moderator Staff Member

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    I went to cash (have posted about this before) when we knew we would need our super to finish our townhouses. But I've borrowed $400k from my brother until we can sell an IP early next year, allowing us to leave $400k in super that we would have used.

    So now I have a dilemma. We each have an account. I moved the smaller balance to a mixture of balanced, stable and defensive. And I've left the larger fund alone for now.

    But I'll continue to watch and switch to something that will grow. Cash is growing as much as some of the very low risk options within super anyway.
     
    wylie, 12th Jun, 2020
    #864
  5. Gen-Y

    Gen-Y Well-Known Member

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    Where is Sash? He have been hibernating?
     
    Gen-Y, 12th Jun, 2020
    #865
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  6. mtat

    mtat Well-Known Member

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    What is perceived negative news of government intervention?
     
    mtat, 12th Jun, 2020
    #866
  7. Gen-Y

    Gen-Y Well-Known Member

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    It must be a very nice brother to lend you $400k. :D
     
    Gen-Y, 12th Jun, 2020
    #867
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  8. RoadRunnerPerth

    RoadRunnerPerth Active Member

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    Jobkeeper is scheduled to finish at the end of September. End of bank mortgage relief and end of election bans. If this happens, this could be perceived as very negative and have an impact. There is talk of extensions of Jobkeeper, whether as it is now or to sectors of the economy and I lot of clients I speak to feel if there is no extension, the economy will get bad quickly. What happens either way is going to be interesting, but i think the potential effect on the stock market cannot be ignored; we will see.
     
    Last edited by a moderator: 12th Jun, 2020
    RoadRunnerPerth, 12th Jun, 2020
    #868
  9. wylie

    wylie Moderator Staff Member

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    He is a very nice brother, and I'm paying him interest. ;)
     
    wylie, 12th Jun, 2020
    #869
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  10. Hosko

    Hosko Well-Known Member

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    At the moment Gerry is looking OK with his timing. May have had a few days where he wasn't so sure but right now the move looks like it has paid off.
    If we take another snapshot next week, next month or next year could be a different story but if you want good news stories you can always find one
     
    Hosko, 15th Jun, 2020
    #870
  11. Big A

    Big A Well-Known Member

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    100%.
    I did a buy in for $50k in mid March of some international funds I hold. Did this through the BT Panorama platform. Accidentally I set it up as a monthly repeat. Come mid April I jump on the platform one morning and realise I had repeated the same $50k buy. Couldn't work out what happened at first, till I realised I had set it up as a repeat transaction. Was not actually that happy with the buy as the prices had already moved up significantly from the previous month and felt like I paid a premium. 2 months later I feel much better and it looks like it was a good buy after all.
    Another 2 months from now it could be a different story again.

    Good experience though. Even though others could have told me not to bother looking and comparing buy in prices as its actually detrimental to your investing mindset, its never the same unless you experience it first hand.

    Was paying a 15% higher price then what was on offer only a few weeks earlier a good deal? Didn't feel like it at the time. Was paying a 20% lower then market peak and something like 20% lower than what todays price is a good deal? Looks like a fantastic deal today.

    The mind works in strange ways.
     
    Big A, 15th Jun, 2020
    #871
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  12. shorty

    shorty Well-Known Member

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    I'm strongly considering another switch to cash. US second wave kicking off, NSW poised for theirs, Vic in lockdown, Jobkeeper winding back...

    Everyone (except possibly NZ) is assuming we will find a vaccine...
     
    shorty, 15th Jul, 2020
    #872
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  13. itsmescottyc

    itsmescottyc Well-Known Member

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    Did they ever leave the first wave?
     
    itsmescottyc, 15th Jul, 2020
    #873
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  14. shorty

    shorty Well-Known Member

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    Good question
     
    shorty, 15th Jul, 2020
    #874
  15. MJK

    MJK Member

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    Hi Simon,

    Thinking about you strategy,

    Im not a big chart user but in real simple terms would you just take the lowest price and highest price for 52 weeks and calculate an average?

    EG. ASX200 52 week range 4402(Low)- 7197(High)
    4402 + 7197 = 11599 / 2 = 5799 average for 52 weeks

    So if the average is 5799 then current price of 6100 its a no buy zone?

    Is this anywhere close to what you are talking about?

    Regards,

    MJK
     
    MJK, 22nd Aug, 2020
    #875
  16. Simon Hampel

    Simon Hampel Founder Staff Member

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    No - I was using moving averages - typically a 240 day moving average (which is approximately 48 weeks). It's quite a bit more complicated than what you describe.

    You start by calculating the value of $10,000 invested at some point in the past (ie with a managed fund, you would calculate the number of units you would get at fund inception for a $10,000 investment, taking into consideration any contribution fees etc), and then you calculate the daily value of the investment moving forward, reinvesting any distributions. You can do the same with shares, but you also need to take into account any splits/buy backs/etc and reinvest all dividends.

    Then to calculate the moving average, you average all of those values over the period (eg 240 day MAV you add up the last 240 values and divide the total by 240). You then plot that MAV against the value to determine whether the trend is up or down. I typically add in shorter averages as well to give more indication of market movements - but I find the long term trend to be the most meaningful.

    If I was tracking the index, I would use a proxy like STW or VAS or similar and calculate the value the same way, ensuring that all dividends/distributions were reinvested (ie accumulation).

    You end up with a chart that looks something a bit like this:

    upload_2020-8-23_8-18-9.png

    I should note that after extensive back-testing using real world results, I have moved away from this strategy for a large part of my portfolio. I found that at times I would hugely outperform the market, but at others I would significantly underperform (especially during times of rapid movement) - so I'm not sure that the risk outweighs the reward.

    I still use the indicators to get a general feel for the movement of the investments - it can be useful for adjusting weightings or deciding where to allocate additional investment funds.
     
    Simon Hampel, 23rd Aug, 2020
    #876
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  17. MJK

    MJK Member

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    Thanks Simon,

    Really interesting but too complex for my level of IT capability.
    What method are you more likely to use nowadays?
    As an interest only what would your old system indicate you should do with regards to VAS today?

    R
    MJK
     
    MJK, 23rd Aug, 2020
    #877
  18. Simon Hampel

    Simon Hampel Founder Staff Member

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    For the most part I am taking a much more hands-off approach and just parking the money and leaving it (reinvesting dividends/distributions). My testing has shown that the outcomes are not that dissimilar to what I have achieved (and better in some circumstances) while the long term risks/efforts are much lower with a hands-off approach.

    However for now I am largely playing a wait-and-see game and still have a large exposure to cash.

    The market has been trending sideways for the last few months and has consistently failed to break through the 61.8% Fibonacci retracement level from the bottom, having tested it 3 times now (and briefly passed through the other day).

    upload_2020-8-23_23-35-21.png

    If VAS shows a clear move above $78.32 (or whatever the actual figure is - I'm not sure how accurate the chart above is), then it may well take off from there - although I don't believe that the fundamentals support the prices we're seeing right now - but the market will do what the market will do.

    I am still of the opinion that there is a good possibility we haven't yet seen the real low (which will be much lower than the March 2020 low) - but it may well take many months to get there yet. I may also be wrong. Either way, I'm currently waiting for the market to show a clear direction before I decide on my next move.

    I am also not an expert - so please don't take any of this as advice.
     
    Simon Hampel, 23rd Aug, 2020
    #878
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  19. Casteller

    Casteller Well-Known Member

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    Entrusted to look after nearly 4M from a NSW sale back in Feb, glad as hell I stayed 92% cash and fixed interest. With small equity purchases following crash now about even, will stay at current weighting unless significant downturn, capital preservation important in this instance.

    If the market goes up any more I will convert much more of my super to cash, it's mostly still equities.
     
    Casteller, 24th Aug, 2020
    #879
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  20. mtat

    mtat Well-Known Member

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    Is that "capital preservation" for the short-term? If so, then there is no point in even looking at the markets.

    What's the reasoning behind tinkering with super?
     
    mtat, 24th Aug, 2020
    #880
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