Aussie equities managed fund - should I bail out?

Shane34 on 02/08/2020 - 15:10

hey guys,

At the start of the year i put 10K into one of the respected aussie equities managed funds.

My 10k went down into the 7's with the market selloff in march, and now its mostly recovered-was around $9500 last time i checked.

I'd initially planned on giving it at least 3 years because of the volatility of sharemarket investing, however, because i got whacked 30% very early on, and because of the murcky outlook for the next few years, i'm wondering if i should just cash out for the time being while my funds are largely intact.

Thoughts?

Cheers

Financial

Comments

  • whooah1979 on 02/08/2020 - 15:23
    +1

    The members pay millions of dollars in fees every year to these so-called reputable super fund managers and they can't even anticipate a market crash?

    They would be better off parking their money with someone that know how to make money.
    https://markets.businessinsider.com/news/stocks/bill-ackman-…

    • Shane34 on 02/08/2020 - 15:44

      Well Bill isn't alone in his doomish financial outlook, hence my unease

  • elgrande on 02/08/2020 - 15:28
    +2

    Double up

  • [Deactivated] on 02/08/2020 - 16:05
    +1

    Unless you know of an investment which isnt based on the going ons of the western world

  • CyberMurning on 02/08/2020 - 16:15
    -1

    because of the murcky outlook for the next few years

    If so then why your 10,000 is almost back to the same level?
    Or are you also a super fund manager now who can see the future?

  • netjock on 02/08/2020 - 16:22
    +1

    What is the alternative?

    You are down 10%. You might get a dividend on 3% for the year which leaves you at 7%. If the fund is half decent they might return about 2 or 3%. Leaving you 4 - 5% worse off.

    • Shane34 on 02/08/2020 - 16:43

      That's a good point

    • swimmingtoad on 03/08/2020 - 01:04

      But either the Net asset price of the unlisted, or SP of the ETF will fall be the same amount as any distribution, leaving you in the short term with the same outcome.

      • netjock on 03/08/2020 - 12:09

        You do know dividends are reflected in the unit price? Unit price goes up as dividends are paid into the fund.

        • swimmingtoad on 03/08/2020 - 13:32

          And the contrary. If the fund pays a 3c distribution, the unit price falls 3 cents. As such, waiting for a distribution leaves you in the exact same financial outcome as selling now (the option considered by OP).
          Investment unit prices do not largely go up in the short term because they receive distributions from listed investments, as the listed investments SP will fall a similar margin, thus leaving the funds net asset position the same (short term)

          • netjock on 03/08/2020 - 15:12

            @swimmingtoad: Sorry mate. They include the dividends within the NTA. It isn't magically siphoned off and appear out of nowhere.

            If the fund pays a 3c distribution, the unit price falls 3 cents.

            Price falls by 3c because the holder is no longer entitled to the dividend / distribution. You just can't accept dividend / distribution is already built into the price. You think magically you lose 3c. You lose the 3c that was already in the price and building up to end date of dividend / distribution. You got to be dyslexic with a ruler to not know BHP is going to pay a dividend and draw a straight line from one ex dividend date to the next ex dividend date.

            • swimmingtoad on 03/08/2020 - 16:42

              @netjock: The price drops by 3 cents after a 3 cent dividend because the company is paying that much our of their asset pool, thus the company is worth 3 cents less in valuation terms. Simple.

              • netjock on 03/08/2020 - 16:43

                @swimmingtoad: But the 3c is already included in unit price which consistently goes up before the distribution. You really need to understand what goes up must come down. It isn't by magic you lose 3c all of a sudden which is what you are saying.

                • swimmingtoad on 03/08/2020 - 16:45

                  @netjock: I'm not saying that.
                  I'm saying that whether you take the distribution in say 1 month, or sell the units now, you'll likely be in the same financial position (not factoring in market moves inbetween)
                  I feel like we are arguing the same thing different ways, undetermined.

                  • netjock on 03/08/2020 - 17:50

                    @swimmingtoad:

                    I'm saying that whether you take the distribution in say 1 month, or sell the units now, you'll likely be in the same financial position (not factoring in market moves inbetween)

                    All equity investments are long term. You seem to have just stepped in with some short term view which has zero consideration in any investing.

                    • swimmingtoad on 03/08/2020 - 18:42

                      @netjock: Nice deflection. Understanding an exit strategy (and how the market actually works) is part of any investment short, medium or long.
                      "zero consideration in any investing" Completely nonsense arrogance. Not worth my time..

                      • netjock on 03/08/2020 - 21:01

                        @swimmingtoad: Having got a bachelor and masters degree in Finance, having worked in finance for 15 years and more than half of that for global banks (retail, commercial and investment banks).

                        You are just talking rubbish if you think anyone invests into a managed fund and make exit decisions based on distribution dates.

                        The ASX200 index is paying 3.45% pa in quarterly installments

                        Even if you exit during the quarter the simple math maximum difference is 0.86% of investment loss ($86 in OP's case).

                        • swimmingtoad on 03/08/2020 - 21:13

                          @netjock: Too late to get a refund on the certificates?

                          • netjock on 04/08/2020 - 09:34

                            @swimmingtoad: You should probably invest in one as it pays itself many times over. At least it might stop yourself making a fool of yourself in public because you can't Google and do basic math.

                            • swimmingtoad on 04/08/2020 - 11:13

                              @netjock: I'll take that as a no.
                              Fyi your logic is wrong yet again, you don't lose cashing out a day before a distribution. Learn the basic fundamentals of a fund and unit pricing.
                              Why is it always when people cannot understand they revert to "but this piece of paper says I'm smart". (I have pretty much the same quals, and more)

                              • netjock on 04/08/2020 - 12:16
                                -2

                                @swimmingtoad: You need an English degree.

                                you don't lose cashing out a day before a distribution. Learn the basic fundamentals of a fund and unit pricing.

                                I said it already above

                                You are just lost when reading a sentence longer than 5 words.

                                I speak on full year basis. You decide to pick a fight on basis of cum / ex distribution basis. The kind of short termism which is exactly not what anyone who is investing should do.

  • plmko on 02/08/2020 - 16:42
    +8

    Great investment strategy, invest 6 months and bail lol

  • dcep on 02/08/2020 - 19:37
    +1

    Sell and put all on APT

    • CyberMurning on 02/08/2020 - 19:49

      Yeah safer than going to casino

    • netjock on 03/08/2020 - 15:18

      You will be surprise how long they can dress up Buy Now Pay Later until it isn't. Same story every financial crash. Getting retailers to pay 6% to assume 100% of the credit risk. Genius! They don't even bother to do a credit check most of the time.

      Few pay day lenders tried that in the UK (an app that will streamline lending) and well you can check the history.

      • dcep on 03/08/2020 - 17:11

        that's what i thought when it hit 8 dollarhhhh fiddy in March ….

        now it's going to 100

        i can never recover from staying on sidelines

        • netjock on 03/08/2020 - 17:47

          Depends on how you view the world.

          Why does Warren Buffet suggest people buy index funds. Because it is hard for professional managers to beat the index. As a non pro, you might make a tonne in APT but lose it all on another stock.

          I still remember someone I know who bought Rio Tinto at $100 before the 2008/9 financial crisis.

  • Trying2SaveABuck on 02/08/2020 - 22:10
    +2

    Buy more - thats what I have been doing since the market has tanked

  • FareEvader on 02/08/2020 - 22:21

    Stonks only go up

  • capslock on 02/08/2020 - 22:57

    Cash out half your money so that you win either way.

  • afah0447 on 03/08/2020 - 13:32
    +2

    Dollar cost average and dont make any withdrawals for at least five years and you will be fine.

    • Shane34 on 03/08/2020 - 17:12

      Its not a bad idea considering the alternative is 1.5% p.a interest in the bank. Have to be a hell bad ride not to beat that over 5 years

  • ihbh on 01/12/2020 - 15:26

    Are you glad you didn't bail out?

    Hope you didn't!

  • EveryLastCent on 02/12/2020 - 11:03
    +1

    He sure would be glad if he did not bail out back in August!
    But if he did not, now that the market is almost back to where it was before the Covid crash, the question of what to do is even more compelling.
    The All Ords is back at 6900 (not far from the 7289.70 all times hight), but the economy is still in the doldrums, unemployment is very high, government debt is huge and rising, Covid is still rampant in US and Europe, China is starting a trading war with the world (and most of all with Australia, probably wanting to make Australia an example, kill one frighten ten thousand).
    So what to do now?

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