I currently have a balanced index fund with HostPlus but am thinking of switching to either "capital stable" or "conservative" investment strategy to limit my exposure to international share markets. The fee difference is about 0.39% - 0.43% versus 0.02% but will definitely be worth it especially if the global economy takes a massive downturn in the near future.
Anybody else doing the same?
Changing Superannuation Investment Strategy due to Coronavirus?
Windows7forever on 26/02/2020 - 08:47
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I’m a little
Torn on what to do also. I’m thinking to change; but at the same time does leaving it mean that even with a short term loss, when the market picks up again does that mean we could look at a higher gain long term?Ie. buying shares at bargain prices now; then getting higher return in future (when prices go back up, if they do)
For long term, I wouldn't change and ride it through..
True. Considering I have 37 odd years left till retirement :|
Without giving any advice, you can’t switch super investments at past prices, or everyone would be doing it.
If anything, most super funds take a day or two to process any change.
ASX looks set to open down strongly again, so you need to consider not where you balance was last week, but where it will be next week.
Depends on age/income/risk profile and a bunch of other factors you haven't mentioned
Too late probably. I've already put all mine into cash, waiting for the low.
Well the ASX has had a rebound and Nasdaq is doing the same with government announcements (my super is ASX/ global). So we effectively have a second chance.
With my Gov super, the rate used when you change is the 5pm rate on the day you elect to change. So will be watching carefully around 4pm.
The current pattern looks all too familiar.
ASX is negative 1.7% the time i write this down. Am i missing something? Thanks
@tunzafun001: Correct, I'm in a mix between balance, conservative balance and stable but till can see a dip about 8%. Now the US is entering the bear market and most likely Aus as well, should i just convert to all cash and fixed interest? Thanks.
@Bargain-er: Ok,for starters I know almost nothing. But I would keep an eye on your unit pricing and if there is another small recovery (the other days was massive), then maybe switch (to the product with less share exposure), cash /bonds/ property trusts.. maybe. Cash is basically stalling it completely. Be interesting to see how everyone reacts to Scomos and Trumps 'big ideas'.
My intel suggests a possible Aussie border shutdown coming. Who knows the implications of that.
@tunzafun001: Yeah, i think i'm going to risk it and change to cash/fixed interest and wait for recovery. I know i know people will say don't time the market bla bla bla and long term goal bla bla bla. But if bear is the trend then may be wiser to act than ride the fall off.
I changed mine to a more conservative mix about 7 days ago, not sure it will have much of an effect.
I switched mine to Conservative & Stable last year itself. Will switch back to growth after this whole panic season is over. Point to note, there is a huge fee levied when you switch around investments. proportionate to your super balance.
Would that be dependent on your fund or is that every fund ?
There will be a cost associated with selling of old holdings and buying new ones… so ye, I cant say for sure. I would assume that it should be the case for most if not all funds.
Read : https://www.superguide.com.au/comparing-super-funds/switch-s…
Hi, which super are you with? I never realised i got charged capital gain tax or fees when changing super investments. Thanks
Gov super is free for first change, $20 for each thereafter. So nothing really. I was on top of this for the GFC, I dropped the ball this time.
I checked with my super company (Aus super), there's no fee or cgt when switching. Also found out conservative has 40% shares and stable about 19%.
Balance still have 55%. We re not crash proof so to speak but may be much better than the high growth ones.
IF you stay you will buy into the fund at a cheaper price, in the long term this works out better, I would advise stay and not trade as that is counter investing 101. Sell low buy high!
But if you protect your balance early (let's say save the 25% dip), and then just miss the recovery and only get 10% of it. Net result you have 25% more funds to play with (therefore 25% more units), that then gain another 10% on that. So a double boost. 22.5% balance increase vs back to even/ where you started months/ years ago. On $250k super we are talking over $50k..for a couple of mouse clicks.. That's like 1000 life times of 5% e-gift cards ozbargain goes nuts for ;)
If you get it wrong both ways, well that's just as bad. In the GFC I missed the start, but timed the recovery. The other way around would have been better, but close enough.
CGT
https://www.ozbargain.com.au/node/520921#comment-8385161
TLDR: It might relieve some of your anxiety about the current news cycle to change to conservative. Taking action feels good. But for people not retiring in the short term, it might mean you are missing out an opportunity to buy things whilst they are on sale.
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Turns out on the 10/3 the horse was well and truly still hiding in the barn!