Hi Everyone, I have my super managed by AMP through my employer, I am not an expert with share market, but it is hitting my super. I just lost around 8% of my super investments in the last 6 months. I don't have much in my super, but my plan is to invest my super into property in the near future, by adding additional contributions in the next couple of years, and then use it to buy a property. I have couple of mates who buy and sell shares, and majority of them told me, that the loss has already happened, and the market will pick up in the future. If I wanted to change the mix to a conservative one , I should have done this much earlier. As I am not an expert, I am asking for your advice, I checked my mix, and it is assigned according to life or age stages, I am in my Mid-30, so it is a growth, with around 65% invested in shares (Australian and international shares). I am thinking that it is never too late, I can move to balance / conservative one as I have different plans for my future super investments, and the losses maybe more I will wait more. Your advise will be highly appreciated. Thanks Ramez
this is financial advice. unfortunately in this day and age even advising on a bank account requires an SOA as Australia went the way of the US where everyone is sued for even the simplest thing. Best off asking your mates at the BBQ.
Your question is a reasonable one, however every response will be subject to a disclaimer that it is not financial advice and cannot be relied upon. It applies here. The market has taken a hit, bad ... and many people are cashing out and moving to cash or had enough and started a SMSF (huge intake of SMSFs in last 3 months) or bough precious metals. Even the experts are not experts, no one knows where the market will go and even the smartest people in the room are losing money (same as 2008). I am involved in a hedge fund and we have seen returns negative for the first time since inception....even with great stock pickers it is hard. I mirror the portfolio myself and am steady. Every trader will take you that they are optimistic about a recovery however, no one is sure where its going. Mum and dad investors will turn to cash for safety and risk takers will buy and assume we have bottomed out. Property investors are laughing.... In any case, its up to you, chat to your fund and see what their view is for the fund. Otherwise consider all options touched on about. Nothing like a bar of gold in the cupboard....pretty safe investment. This is as direct as a politician however, direct advice and I would cop it. Cheers Ivan
RB - One of the problems with managed super is that members choose a default strategy ie growth etc. This strategy does not allow for a bail out option that allows the manager to drop it all to cash and to wait it out. The growth strategy imposes a mandated % in equities and equity linked investments. Had you considered switching to say the cash strategy BEFORE the market losses then you would be seeing no loss BUT miserable earnings.
Selling out now will see you crystalise the losses forever (even changing strategy with the same fund manager). As Paul said you would've needed to change to the conservative option a while ago to avoid any downturn in the stock market. Super is a long-term investment don't worry about the volatility - select your strategy and review it every 6-12 months.
Thanks Guys, @Paul@PFI , I didn't consider moving to CASH or a more conservative option. I booked sometime with a financial planner next week, and will see what advise he will recommend. Thanks Ramez
A meeting in May would have been better. Hard to call where it goes from here. In May I switched my super from growth to cash. I missed the slide and now earnIng a paltry cash rate. I need to consider when to reinvest. I could get that wrong too.
It is very unlikely any financial planner will recommend a switch to cash, regardless of how obvious it is that Australia is headed into recessionary waters, as they have too much of a vested interest in you selecting commission paying products instead.
Planners cannot receive such commissions and haven't been able to for around 2 to 3 years now. There are no commissions on any products anymore - except insurance.
Fair point. Still, it is rare to come across a financial planner recommending a cash heavy strategy, even when financial storm clouds are gathering, because the low performance such a portfolio would imply would see most clients looking for a another financial planner with a more optimistic outlook.
That's why the recommendation must be checked against your objectives. If your objective is flight to security then a lower % in equities and other higher risk investments. There are capital guaranteed products which could also be used in this strategy as well.
Hi Paul, I'd be interested to know when you next switch... my super is very heavily in shares and as a result, it is still the same value as it was 6 months ago, even with all the extra contributions during this period. Sounds like you timed your change to cash very well.
How many here actually use features like MemberDirect in AustralianSuper where you can buy/sell shares from within your super without the hassle of SMSF?ING Living Super is another choice - I am sure there are more. Not that a hands on approach would yield better results in the current market but just wanted to check how hands-on property investors or with other investments.
I work with financial planners and rib them that I'm outperforming them and the index but the key is long term results. Getting out to cash is just half the story. Market yield are falling along with prices so the income for dividend yield stocks is not an attractive chase. I would rather earn 2.5% and wait for opportunity to buy. I will watch the market / economy and when I feel it has bottomed out I will likely switch 50% to growth. There is still volatility. Then as the market shows right signs and confirms improvement I will increase that. The key secret is avoiding losses. $1,000 is worth $600 if market falls 40% but it takes a market rise of 66.66% just to recover the loss. I avoided the loss and want to take just 60% of the upside = I will be happy. I will have $1400 v's $1,000. One of my bug bears with fund managers is the mandated investment problem. The strategy says they must hold so they do. They don't have a strategy to exit and wait.
