Superannuation - Losing Daily due to COVID-19 - What to do?

newbie4453 on 25/03/2020 - 13:39
Last edited 25/03/2020 - 13:42

As probably everyone is experiencing (although not the same vicinity), superannuation has taken a massive blow. Particularly for myself as I have reached preservation age, I looked at my balance and almost cried, having lost more than $70,000.

I know the market will recover but as each day goes on, more and more is dropping. I’m worried I’ll be left with nothing or very little, which is depressing given I have been working 30+ years.

I’ve read that you shouldn’t change to cash now as it will crystalise the losses. Is it too late to switch to cash now to avoid further losses? What if I switch to cash now and then change back to balanced investment once the market picks up again.

If I was younger I wouldn’t worry much but I am nearing retirement. Probably within the next year or two. I guess this will change now :(

Any advice would be appreciated.

Financial Superannuation

Comments

    • gooddealmate on 25/03/2020 - 19:33

      We're not even near the peak of this crisis yet, more businesses will close, more people will lose their jobs, a proven cure is still months away.

      Stimulus packages don't seem to be having much effect too.

      So it's hard to see things improving any time soon.

      I changed mine to cash a few weeks back, and I still would now, if I hadn't done so already.

      • RocketSwitch on 09/06/2020 - 16:11

        When ya gonna go back in? Looks like it's rallying…

    • MrRobot on 25/03/2020 - 19:41
      +2

      Leave it. You're not retiring tomorrow, so you can ride it out. The markets will recover.

    • His_Holiness on 25/03/2020 - 19:51
      +2

      Moving it into cash is the worst decision you can make. If you don't have the gumption to ride out a financial crisis you shouldn't have had it in high growth to begin with.

    • Donaldhump on 25/03/2020 - 19:59
      +3

      5k, you must have a balance of 30k at most.

      Like others have said just leave it.

      • mady123 on 25/03/2020 - 20:01

        correct. it was about $32k in Feb 2020.

        • His_Holiness on 25/03/2020 - 20:13
          +2

          That's not a lot for someone who is ~40yo

        • kahn on 25/03/2020 - 20:16
          +1

          You should be thanking your superannuation fund manager because the All Ords dropped about 28% since the beginning of Feb 2020, so you could've lost around $9k.

          Anyway, there was a similar thread posted only 6 hours before yours, so you can check that out if it helps.

        • Donaldhump on 25/03/2020 - 20:48
          +2

          I’d be pumping money in like mad at the moment then if you can, you need to beef that up

          And if your eligible to withdraw 10k and pump it straight back and claim as a concession contribution, exploit the stupid loophole.

          • darkchoc on 26/03/2020 - 14:46

            @Donaldhump: I don't know the details of the loophole. But why take money out to put it back in?

            Money in is taxed at 15%. United it's post tax.

            What's the benefit?

            • ely on 28/03/2020 - 00:35

              @darkchoc: I assume it works like

              • withdraw $10k tax free
              • deposit $10k again, losing $1.5k in tax within super
              • claim $10k concessional tax contribution, which could be worth up to $4,500 tax back (if earning a taxable income of over $180k), but is more likely to be worth $3,250 or $3,700, depending on your marginal tax rate
              • if you actually want to boost your super, deposit your tax refund in as well (and claim a little bit of that back again as a tax deduction next year too…)

              Rinse and repeat again next FY with another $10k.

              Eligibility criteria will hopefully prevent me from exploiting this loophole. This was the first I'd heard it mentioned.

              • ely on 29/03/2020 - 14:35

                @ely: Seems incredible that this loophole is not receiving more recognition, haven't been able to find any coverage of it at all, but seems viable and substantial (easy $2k+ profit in each year, for total $4k+ profit).

    • dcep on 25/03/2020 - 20:11
      +4

      leave it , the market will recover, your balance will go back up, and currently your super contribution on every pay are buying into low market which is good

    • sa-ozzie on 25/03/2020 - 20:12

      Super is doing a Monica lewinsky

      • kahn on 25/03/2020 - 20:19
        +1

        Rolling over to receive a cigar contribution?

    • mady123 on 25/03/2020 - 20:20
      +2

      Thank you guys for your inputs. Very helpful indeed. i will leave my super in high growth and forget about it for many many years.

    • horice on 25/03/2020 - 20:26
      +1

      The market has a lot of downside
      Commercial property has a lot of downside
      Res property has a lot of downside
      Unlisted assets have been revised down

      Not financial advice but…

      The daily market manipulations is simply the 1%ers playing the punters for mugs

    • JimmyF on 25/03/2020 - 20:42
      +1

      High growth @ Australian super

      You mean high loss……

      my super has gone down about $5k

      hahaha is that all? Nothing to worry about. Mine is down way more than that!

    • DoctorCalculon on 25/03/2020 - 22:59

      Also with Australian Super now. Read my post here: https://www.ozbargain.com.au/node/526428#comment-8484552
      Imagine losing $25K and not being able to do anything about it for over 3 weeks.

  • ozBFM on 25/03/2020 - 21:04

    Some good advice here.
    https://us3.campaign-archive.com/?u=0d1d0582254b8399936e6130…

  • eclaw on 25/03/2020 - 21:19
    +2

    This is known as sequencing risk - when a bad investment return early in your retirement will lead to a significant fall in living standards even if markets return to normal levels in subsequent years.

    Most people would recommend having "buckets" of money - 1 to 2 years of expenses in cash to meet crap like this, 3 - 5 years in low volatility investments and the rest in higher risk assets to keep up with inflation and returns.

    Unfortunately this is all talk if you havent prepared prior to the 30-40% fall we had in the last two weeks; if most of your super was in high growth assets and you have already seen a sizeable loss then there is nothing that you can do. In fact, the only thing you can control is probably to retire later rather than sooner and if that is not possible, draw down as little as you can so your money has time to bounce back with the market.

    In any case, it might add value to speak to a financial advisor - you don't want to mess up at this point.

  • ramshead on 26/03/2020 - 08:53
    +1

    Leave your super alone. Make sure you contribute as much as possible in this environment (25000 concessional cap). Your super fund is buying new shares at a good discount.
    For those already drawing a pension from their super, you can now halve the compulsory drawdown. If your pension is drawing down 5%, you can change it to 2.5%.
    That’s why it’s a good idea to not rely completely on your super pension for income in retirement.

  • MontyMacaw on 26/03/2020 - 09:36
    +3

    You are too late to change now. You are in for the long haul. I’m picking you are in your 50’s. Fear not because this is not like the GFC or the Great Depression or the Tulip crash from Europe (google it). The world economy was in a thriving state prior to this due to government interventions which are designed to help you get your investment back. These skills were learned from past events. If you are not a stock market expert, and very few are, you need to stop looking at your super and read a book. Remember you have had extraordinary growth in the last few years so in a way it wasn’t yours to begin with. Investments are designed to average up over time. If you must listen to people then listen to people like Warren Buffet who invests in the same way your super fund does and he has survived every financial dip and crash in his many long years of investing and has become stronger and stronger. This virus will be a short term hit to the economy and may well create a huge boom when it is over as people scramble to get the world going again with the help of all the extra money that governments have created. Governments will carry the extra debt not you. Many people changed their super during the GFC and as markets recovered and then boomed their losses could not be made back by holding cash. The more stable long term investment is property funds which make about the same over time as shares and they don’t have the same swings. But that is not for now. That is for when your approach retirement and need a safer investment. Just chill. You have a paper loss. Changing it now makes it a real loss.

  • OzHunterNSW on 26/03/2020 - 09:47

    Go onto life support and ride it out

  • Bob Svargis on 26/03/2020 - 10:29
    +3

    Anyone over 45 has lived through:

    • 87 stockmarket crash
    • Early 90's recession
    • Tech crash in 2000-ish
    • GFC
    • Now Covid-19

    If you lived in or dealt with Asia over the early 2000's you would also have dealt with SARS.

    Main thing is, don't panic. It's kind of too late to move your super into cash now.

  • FilePeter on 26/03/2020 - 10:29
    +2

    Defer retirement for a year or 2.

    Don't turn a paper loss into a real loss by changing to cash.

    If you're > 10 years from retirement, I would strongly consider shifting a solid portion of your portfolio to aggressive.

  • sq2112 on 26/03/2020 - 10:45

    depends on your age and how much of working life youve got left. switch most to cash to keep principle intact, but keep some invested in the market as you might and will gain with the volatility here and there.

  • [Deactivated] on 26/03/2020 - 10:46

    Not an expert, but my gut feeling is that it would be smarter to put all your spare money into super now while everything is cheap and work until it bounces back and you're richer than you were before it went down?

    Like, I haven't lived through a recession other than the GFC but I am assuming that since there are no structural issues at play here (none that will be addressed anyway…), once we've dealt with the crisis (surely not more than 12-18mo?) thinks will bounce back quickly.

    Just my 2¢.

    Good luck mate!

    • jason101 on 26/03/2020 - 11:35
      +1

      I'm with you - money is made when you buy not when you sell, if you've got 2-3-4-5+ until retirement these are golden times for buying.

  • frostman on 26/03/2020 - 10:47

    I lost around 20K super.
    Frozen it to cash afterwards as this issue is larger than the 2008 GFC, this issue we're in now will result in a Great Depression which I assume would be at least another 20% super loss.
    I see no harm in moving conservative than moderate in 6 months

    • Hangryuman on 28/03/2020 - 10:21

      I'd guess securing 12 months living expenses would be helpful

      worst case can see runs on banks like South America where they simply shut the doors to prevent losing too much liquidity

      then start looking at community gardens for growing your own food locally - like the Japanese still do - they know about tsunamis and firestorms and total disasters which is why their community can respond so quickly to disasters (woke sardonic trolls wanting to criticise the Japanese form a queue to the left here …)

  • GotSomeTime on 26/03/2020 - 11:55
    +2

    It must be a stressing time for you, and many people. Especially those who are in their late 50's or even early 60's and had planned to retire with your super.

    The reality is, like most people have said in this forum, there is no easy answer. It's going to be a hard pill to swallow.

    However, if I had to choose between converting my superannuation investments to a more cash-oriented portfolio, or more balanced, I would stick with balanced. Markets bound back stronger following a downturn (history shows), usually, because businesses get back on track, people spend money, people gain employment, there is more credit, the economy looks healthy, investors gain confidence, markets bounce back etc.

    If you have the years (and emotional perseverance) to ride this out, give it a shot.

    Also, something useful I've found for those entering retirement already was the government's announcement to reduce minimum pension payments from your account-based pensions by 50%, thus allowing you to take less pension, preserving more of your capital in the pension environment (i.e. no tax on income and capital gains).

    • darkchoc on 26/03/2020 - 14:07

      Retirement does not mean cashing in your Super.

      The smart thing to do is to mine to pension stage and enjoy tax free investment earnings for another 20-30 years.

      Just take money out from super as much as you need to pay bills and enjoy your lifestyle.

      The compound interest in retirement stage is far far greater if the balance is bigger.

      • GotSomeTime on 26/03/2020 - 14:13
        +2

        That's right.

        Taking your funds into the pension stage means you will be having to take a minimum pension. Funds in the "accumulation" or "i'm retired but not changing my status to pension" account will still be taxed.

        Funds in the pension fund are the best there is out there. And of course, the magic of compounding.

  • moonleaf on 26/03/2020 - 12:23

    Same like the OP. Take a look at your super investment returns, it should shows investment returns balance. If the balance is NOT ZERO means you are not losing your super guarantee from your employer(s) and/or your salary sacrificing super. If you're worried, you should make a switch to cash.

  • Watto23 on 26/03/2020 - 12:30
    +2

    I've lost about $70-80k, from a total of $300k. But I'm early 40's it is in an aggressive option and it would be absolutely stupid of me to change to cash. In fact cash is such a poor investment right now no one should really have much of their super in cash, unless you had a retirement date picked and enough in Super, then yes I'd have had it in cash as soon as I decided to retire.

    I'd either change to a less aggressive share option, or stay where you are. Remember all super contributions you are making now are benefitting from the drop in the share price. So if you can invest more now that's what you should be doing, because when the market recovers you'll be getting 30% gains on money you invest now.

    The only way to lose significant money is by going to cash now. The only people really in a tough spot are those wanting to retire in the next year or 2. The rest of us will get our money back eventually and more.

    • Ghost47 on 26/03/2020 - 15:10

      Yep any change to your portfolio right now is silly. Absolutely silly and basically throwing your potential gains away.

  • rocmelon on 26/03/2020 - 12:30
    +2

    Now retired
    Expect in your lifetime to keep loosing your super.
    in the 80's I lost 1/3 with Vic state bank collapse
    Then again 1/3 lost with BT
    then again 1/3 in 2008
    this time lost 1/10 it was invested in the balanced account
    moved all to cash last week
    my theory is: save what you got before it gets worst
    at least you know how much you have.
    Even if it turns around tomorrow it won't sky rocket.

    Then again expect the gov to steal your money in order to
    bailout banks,Qantas,business, too big to fail.

    • [Deactivated] on 27/03/2020 - 21:24

      It can bounce pretty quickly. If there are some good news about cure, buyers will buy like there is no tomorrow.

    • Hangryuman on 28/03/2020 - 10:23

      'keep loosing your super'

      I reckon you need to improve your lassoo skills there boy !

  • moonleaf on 26/03/2020 - 12:48

    After I switched to cash, my balance is still going down, not sure why? anyone experiencing the same?

    • GotSomeTime on 26/03/2020 - 13:48

      Check that your "cash" option isn't inclusive of other defensive assets like bonds or other cash-like assets.

      Or it could be administration fees and/or insurance premiums in your super.

      It shouldn't be drastically going down though.

      • moonleaf on 26/03/2020 - 14:36

        I checked both account balance and new contributions 100% in Cash. In the current transaction statement showed interest in negative and the switch fee is zero.
        My super balance down just under $10K after the switch was completed, I made the request on a weekend. I was probably locking in a loss.

        https://portal.australiansuper.com/investments-and-performan…

        You should consider the potential impact of investment returns before making a change

        Changing your investment options during times of market volatility may result in locking in a loss.

        Investment returns are applied to your account when you change your investment choice. Find out more.

        If you change how your super is invested, returns will be calculated and 'locked-in' (credit or debit) using the relevant daily crediting rates as at the date of the change. Your account balance is then invested in your new investment choice according to the percentages you have requested.

        • DoctorCalculon on 27/03/2020 - 00:44

          I was probably locking in a loss.

          I made the same expensive mistake as you. I changed both my current balance and future contributions to mostly cash, when I only should have done this for future contributions not both.

          AustralianSuper allows you cancel an investment switch as long as they are in a pending state. Once they are moved from this state, they are locked in.

          The loss on my previous investment option is now cemented. :(
          I will have to wait until this COVID-19 crisis is over before I change back to High Growth or Balanced.

  • OzzyOzbourne on 26/03/2020 - 13:05

    You would think that our highly paid fund managers (sure mine will rock up in his new AMG when we get back to work) would have foreseen the crash coming, converted to cash then shares again once they bottomed out. But I'm betting not.

    • GotSomeTime on 26/03/2020 - 13:56

      Perhaps, perhaps not.

      Crystalise loss, purchase at low cost base in a volatile equity market… or taking hedge positions to manage risk and diversify your portfolio…? It will be interesting to see how everyone stands at the end of these volatile times.

    • Autonomic on 26/03/2020 - 15:40

      70% of large cap active fund managers fail to beat the index over a 10 year period, according to S&P, excluding management fees. Including fees that number jumps to 85%.

  • darkchoc on 26/03/2020 - 14:04

    A huge consideration for everyone here. Even though you may be close to retirement (say 60), you still have 20-30 years left for your Super to be drawn down.

    We've had the best returns in the last 10 years and investments do go up and down. Just remember to stay in it for the long term. We can never time the markets.

    Roll over superannuation into pension stage and draw down money as you need it. Pension stage super investment earnings are tax free.

    Don't cash out more than you need for the next 3 years.

    The market may go down further. But if the past is any indication, it goes back up. Keep going slow and steady.

  • Ghost47 on 26/03/2020 - 15:12
    +1

    The market will recover eventually. Maybe not at the end of this year, maybe at the end of next year, who knows. But switching portfolios or cashing out is extremely silly.

    Hold out if you can, don't lock in your losses by changing your portfolio.

    • HeWhoKnows on 26/03/2020 - 22:25
      +2

      Im sorry but switching portfolios right now is not silly at all.

      Plenty of financial advisors gave this advise when the GFC started and burnt thier clients BIG TIME. THAT WAS SILLY!
      Anyone that hung in there was waiting until this year to see thier portfolios recover (2008 - 6,900 to Jan 2020 - 6,900)
      Now you might ask why they gave this advice?
      First most of them have absolutely no idea.
      All they know is to put you in diversified funds. Nothing else.
      Secondly they get paid a trailing commission of all funds invested under thier direction. Thats a very good income for them.
      So why would they throw that away by switching thier clients to the safety of cash which pays no commissions?
      See the conflict of interest here?

      The sharemarket is still going down by another 30-40% and might take 10 years or more to recover.
      Property too will go down by 30-50%

      So all diversified portfolios are going to get smashed.
      Whereas switching to cash will preserve what you've got.

      Ever heard of the saying CASH IS KING?

      Thats where we are right now my friend

      • DoctorCalculon on 27/03/2020 - 00:49

        By switching portfolios, you are cementing the loss against the previous portfolio. This loss will be significant for those with a high account balance in their super (> $130K).

        Although, I keep hearing that I should be riding it out under the current portfolio as the market will bounce back in the next 6 - 12 months (but who knows).

        It seems like both are valid options. If only we had access to a time machine…

      • Hangryuman on 28/03/2020 - 10:26

        'CASH IS KING?'

        I recently had a great offer to buy my investment property - went to my bank to discuss options - if I sold and bought something else, how much could I reborrow

        after an hour of deliberation (I'm retired with multiple different investments) they came back with 'a lot less'

        so I walked with OK thanks - cashing out would leave me worse off …

  • kator on 26/03/2020 - 16:17

    Left my super alone. 120k. It is 40% conservative and 60% balanced. Have 25 years till retirement. It will recover.

    But switched all future contributions to Australian shares. They are cheap now.

    Lost all my savings in the GFC by switching back and forth. I was uni student in the EU. Back then all the rich were buying shares during the GFC. The poor was in panic mode selling or had no money to buy.
    I dont have money to buy now, so happy to have the super contributions doing it for me.

    • HeWhoKnows on 26/03/2020 - 22:19
      +1

      Best option now is CASH. Nothing else!
      Minimal return but it wont go down.
      Capital preservation is the name of the game now.

      Both conservative and balanced portfolios will get smashed from huge downturns still to come from both shares and commercial property.
      But shares will get a good bounce first so do switch to cash just yet.

      Predictions from an expert who saw this coming last year - DOW will bottom at 6,000 pts in about 2 years time.
      And its pretty obvious to Blindy Freddy that Commercial property is going to get absolutely smashed.

      • Hangryuman on 28/03/2020 - 10:27
        +1

        'do switch to cash just yet'

        I love clear communication …

  • ireadtermsofuse on 26/03/2020 - 16:56

    Holy. And I thought losing 10k was a lot.

    • JetBombat on 26/03/2020 - 19:19

      If you lose 10k out of 20k it is a lot, if 10k out of 500k - not much in current situation. Throwing numbers without percentages is meaningless in terms of super performance. In any case, the best thing to do now is most likely keep buying, maximise super contributions in true OZB style while "up to 40% off" sale is going on.

  • happirt on 26/03/2020 - 18:30

    but i checked my super last night, it gained
    retirement age is going to keep going up anyway

    • CalmLemons on 27/03/2020 - 16:36

      it bounced as the dow bounced 12%, biggest bounce since 1933.

      a portion of your super portfolio consists of shares.

      please check these facts.

  • HeWhoKnows on 26/03/2020 - 22:10

    The sharemarket is going to bounce soon but not back to where it was.
    Maybe 20% up
    When it does bounce, change your portfolio to 100% CASH
    Because the sharemarket still has go a long way to go down - probably 50-60% top to bottom if we are lucky. maybe more.
    I heard an expert who predicted this say today the DOW is going all the way back to 6,000 but it will take a couple of years.
    And Commercial property in which super is also invested is going down hard as well.

    The party is well and truely over.
    Its time for the big hangover

    • Hangryuman on 28/03/2020 - 10:29

      'When it does bounce, change your portfolio to 100% CASH'

      I read 'classic bear market rally' - I think meaning temporary or dead cat bounce.

      so you might be right - I'm thinking about it

      • HeWhoKnows on 28/03/2020 - 15:18

        The opportunity appears to be right now.
        Not sure how much upside is left in this bear market rally

  • grasstown on 26/03/2020 - 22:25

    I changed to cash on the 17th. “Advice” I got was to change to cash and change back to growth in 3 months. I hadn’t ever given it any thought.

  • 1mick on 26/03/2020 - 22:37

    Everyone has different views on what will happen. For what it is worth our $ will soon be worth a lot less. Several are suggesting gold would be a very good investment. Seems that the price will continue going up and up. Have a listen to Peter Schiff on utube.

    • HeWhoKnows on 28/03/2020 - 17:54
      +1

      Gold is priced in USD.
      Hence as the AUD sinks the price of Gold goes up even if it doesnt in USD.
      Thats why the price of Gold in AUD has escalated so much in the last 6 monts.
      A bit of gold going up in price and a lot of AUD going down vs USD.

      Gold is not an investment
      Its preservation of your wealth

  • Harryxx on 27/03/2020 - 10:31

    I put mine in cash as soon as the virus news came out. I did not take a considerable hit. I thought I timed it well but reading the comments here make me think it was a bad decision. might put it back into high growth once the govt relaxes the shutdown.

    • klonky on 27/03/2020 - 14:02

      The market is expected to fall much more than what it is now so holding on to cash is not a bad decision. Switching to growth once shutdowns are relaxed will see you well positioned over those who lost a greater percentage by not touching their super.

      • [Deactivated] on 27/03/2020 - 21:18

        Can't time the market. In one day it could go up 20% and then what?

        It could take days to get the super funds to change your investment strategy.

    • CalmLemons on 27/03/2020 - 16:38

      good choice. i forgot but told all my friends to convert to cash at beginning of feb haha.

    • grasstown on 28/03/2020 - 09:15

      When was the good time to convert to cash? Just before schomo announced the 500 people etc the Monday after the Bondi gatherings? Or was it before?

    • HeWhoKnows on 28/03/2020 - 17:57

      We are going into a world-wide DEPRESSION (not a recession) in case you have not noticed.
      The sharemarket is now in a BEAR market.
      Property will also collapse and go into a BEAR market - its inevitatble with what is happening around the world.

      Any bounce in the sharement must be treated with caution.
      Be prepared to move quickly if you want to take the risk

  • OzFrugie on 27/03/2020 - 16:04

    for those who switched to cash, wouldn't you miss out on getting shares on the cheap?
    I know it may go down further, but if hold long term, it's likely to go higher. Isn't it the same principle of dollar cost averaging (DCA)?

    • redslert on 27/03/2020 - 16:13

      We are no where near the bottom.
      The DCA should be done on the way up… not the way down…

      • OzFrugie on 27/03/2020 - 16:18

        u reckon sharemarket will never recover and will keep going down?

        • [Deactivated] on 27/03/2020 - 21:14

          Who knows?

          It can go below 4000 in one day if scomo/others announces some unpredictable bad news.

          Or a cure may be announced this evening from a research institute executive and shares go up in one day.

    • HeWhoKnows on 28/03/2020 - 18:02
      +2

      You obviously havent looked at the big picture!

      In 2008 the All Ords peaked at 6900.
      It took over 11 years to get back to 6900 (Nov 2019) then it collapsed shortly after.
      The only money made in the sharemarket long term is dividend income.

      All graphs of the sharemarket are hence totally misleading and deceptive because they include ALL RETURNS including dividends.

      Subtract dividends and the share prices have remained flat over the long term.

      Yes if you pick the bottom and wait 12 years and then get out at the top you make good money.
      But its easier said than done.
      the road is extremely bumpy and prompts you to sell out at the worst times.

      With property the graphs only show movement of median property prices. They dont include rents or property income. In any case Gross income from property is also misleading since you must subtract all outgoings to arrive at net income. Maybe thats why rents are not included. the calulation for each property is totally different so impossible to include net rental income.
      But the point is the comparison between property and shares is never apples for apples. Remember that.
      Also remember when you subtract dividends from sharemarket returns the net return is ZERO over the long term!

      So its best to always invest in high yield shares. Not growth shares that pay little or no dividend.
      Because when the sharemarket goes down the dividends you received stay in your pocket! (So do NOT reinvest dividends)
      I learnt that in the 2008 sharemarket crash.
      Food for thought.

  • CalmLemons on 27/03/2020 - 16:33

    You should not touch it, or if you can't help yourself put it into cash. - not financial advice, seek a proper financial advisor.

    For example, a few days I ago I converted by super in Rest to 50% core strategy, 20% cash, 30% property.

    I misread the property index and lost an extra $2000 from the property component.(This is an example of what not to do)

    I day trade part time and do a fair bit of swing trading as well as I like to play around with this, I am fairly young. I would not recommend anyone nearing retirement go stuffing around with their super unless they get proper financial advice.

    For my situation I am not fussed even if I lose half my super which would be about $45k so I am putting 50% into overseas shares once I think the market bottoms. This would be a very bad idea for someone not inclined to risk. This is not financial advice.

    BTW it is extremely hard to time best time for super changes as the unit indexes lag due to time difference and also administrative wise superfunds normally take about 2 business days. this is not for the faint hearted.

    • HeWhoKnows on 28/03/2020 - 18:20
      +2

      Financial advisors are the WORST people to go for advise
      Their advice is ALWAYS to stay invested and ride it out.
      Thats what they told all thier clients in 2008. great advice but hey!

      Now look at why

      Firstly investment advisors dont have a crystal ball that predicts where to make the most of your money.
      If they did they would NOT tell anyone because the secret is to get in first before the herd.
      When everyone moves at the same time no money is made. Its that simple.
      And if they had a crystal ball they would be super rich - so why work as a low paid investment advisor?

      And not one investment advisor predicted the 2008 crash nor this one.
      They had no idea!

      Secondly Investment advisors are taught to put thier clients into diversified portfolios. A kind of minimising risk and then set and forget.
      The younger you are the more agressive is the allocation of the diversified fund (i.e. large High risk shares component)
      When nearing retirement they move you to a conservative portfolio. So much lower shares and higher stable cash and fixed interest type component. But these also have a high property component (normally stable) but which is highly susceptible to a recession. So not good right now!
      Its stock standard investment advice.
      Its a no-brainer. Time line stuff. Dead simple.
      Really you can organise this yourself.

      Meanwhile whilst you are invested the advisor gets a trailing commission on their clients gross amount invested in a fund.
      Thats a nice income for doing nothing.
      Its also why they would NOT tell you to move to cash - no trailing commission. no income for them, Hohum. Suicide move.

      Before picking one, its always a good idea to ask your potential investment advisor what investments they have and how much.
      More importantly how many investment properties do they own?
      surely if they are so good they should have accumluated a huge mass of wealth.
      But no! Most of then are flat broke.
      Now i ask you..
      Would you go to a broke person for investment advice or one that is rich?
      Then ask: What jobs do rich people have?
      I can tell you no rich people are investment advisors!
      But most of you should already know that.

  • The mikky on 27/03/2020 - 18:47

    It’s about time in the market, you should ride this out, I think things will get bad real quick, but if you can wait 1 - 2 years I think you should be ok.

    I am not near retirement age so am looking to put as much spare cash I have at the moment into my super as it is nearly 100% in aus and international stocks.

    But seriously get financial advice from a professional.

    • [Deactivated] on 27/03/2020 - 21:10

      Is this a good way forward? I put all I had in market 2 weeks ago and now I have lost $20k. I know it may eventually go up but most people have not lost that $20k NOW. Obviously, try can still get in.

      • The mikky on 28/03/2020 - 11:45

        I would recommend waiting, you have already lost on the initial losses.

        Most record surges come after record drops

        I also don’t have the time or knowledge to even attempt to time the market.

        If you want proper advice, talk to a professional.

    • HeWhoKnows on 28/03/2020 - 18:51

      See my post above.
      Let me also say you have not read the economic situation very well.
      See that we are heading not into a recession but a depression.
      Why?
      The central banks around the world have exhausted all their ammunition.
      Interest rates have nowhere to go to encourage more spending and investment.
      And every government in the world is drowning in mamouth debt.

      Now think back to 2008.
      Debt was a fraction of what it is now and interest rates were quite high with plenty of room to move down and spurr on growth and spending.
      Not now though.

      No go back and look at the sharemarket crash of 1929 and see what followed.
      You will see 2 peaks and 2 crashes.
      The 1st peak in 1929 at about 5200
      The 2nd peak occured in 1936 but only got back to 3200 and then crashed again.
      The second crash didnt bottom till 1949 some 13 years later!

      They say history repeats itself and that is exactly what is happening right now.

      We just went past the 2nd peak and its going to be a LONG TIME coming back this time.

      • The mikky on 29/03/2020 - 21:16

        Mate, you have no actual idea where the market will go. That’s the problem you are using historical data trying to predict the future. Do you know for sure how it will go ? No you don’t. You are entitled to your opinion, this is a forum for people to share their ideas.

        I have my thoughts, you have yours. I guess time will tell, please remember to ask me in 30 years how my or your plans turned out.

        Just remember we are all humans. We are allowed to make mistakes, if the market never goes up again, well we are all (profanity) anyway.

        All I can do is hope that we as a country reduce the amount of people who loose their lives.

        Yes history repeats it’s self, but it also doesn’t as well.

        Anyway at the end of this I wish you the best of luck and hope you make as much money as you can make. I just hope that you and your family are safe.

  • shamid202 on 27/03/2020 - 20:18
    +1

    sorry to disappoint but how do you know markets are going to ever recover?

    this is the worst crisis we could hit in our generations. i believe this situation can take about 8years.

    • Hangryuman on 28/03/2020 - 10:51

      just checked my High Growth super balance - it's up 2% since yesterday, 5% since 3 days ago - is this a dead cat bounce ?

      Only time will tell - still down 13% from the peak reported as at end Feb

    • HeWhoKnows on 28/03/2020 - 18:57

      Agree but even longer
      See my 2 posts above

  • Antikythera on 28/03/2020 - 10:50

    you are at preservation age? so i assume by that you are in less risky portfolio? consider trying to time the bottom of the market and get your fund manager to move you over to a more risky portfolio at the right time. watch out for the current dead cat bounce though.

    you will have missed the worst of the crash and if timed right can benefit from the best of the recovery.

  • SMo on 28/03/2020 - 14:10
    +1

    Recently changed from high growth to cash when ASX hit 6800 effectively freezing my balance. Will buy back into high growth but I don’t think the market has bottomed out yet. All the commentary about ‘crystallizing’ ones losses by converting to cash are inaccurate - you only crystallize if you withdraw completely from super or never buy back into higher growth options. The stock market tends to fall rapidly and recover slowly, so provided you get out quickly in a rapidly falling market, there is relatively more time to buy back into higher growth options as it recovers. As I think the market has further to fall, I would convert to cash right now if I hadn’t already done it, but it becomes trickier to work out when to buy back in.

    • HeWhoKnows on 28/03/2020 - 19:00

      Congratulations

      You one of the few here that understood well ahead of time what was happening.

      You may not make much in cash but you never lose either.

      Conservation of your capital is the name of the game right now as times have changed…..CASH IS KING!

      Very few people here understand this game changer

      I bet in 12 months time nobody here will be suggesting investment in shares. The time to invest in share is OVER for a very long time

    • Killerbala on 05/04/2020 - 03:41

      Good to see a very few think alike and did the same thing. I did similar move but was a bit early about Nov 19 when I moved all to cash. Might take 12-18 months before making a move back.

      People don’t seem to understand that this downturn is something that would have happened even without the bat soup virus. COVID-19 just happened to prop up on time to save the govts around the world, otherwise they would have gone to war or did something else to distract the sheep’s from their mismanagement.

      By looking at how WHO (dummy) reacted and provided instructions, it seems the govts underestimated the spread rate and allowed it to spread until they got told by the COVID-19 (Surprise! Mother Fxxker). In few months time they will start the blame game and no one will be held accountable for anything as usual.

  • Climber on 28/03/2020 - 19:10

    I've also cashed all at the end of Feb, then about two weeks ago purchased 20% in gold and 20% in US treasury bond. (Both ETF)

    Like a few others, I believe this is once in 100 years kind event and can turn into a nasty depression.
    Now my strategy is no greedy, protect Super until I see a full recovery or a full crash.

    • SMo on 28/03/2020 - 21:23

      Yes unfortunately I agree. This is going to be way worse than the GFC when the ASX 200 lost more than 50%, so I predict it will drop to 3600 or probably lower (ie another 25% decrease). Converting super to cash right now is a very reasonable move to prevent further exposure, with an aim to changing back to higher growth in the future.

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