Hi all,
So I am with QSuper and I am wondering should I change my super investment to cash before the big recession that is coming? When Covid hit my super took a hit and then came back. Apparently according to news.com.au we are about to have a blood bath… should I get ahead of the game and change my super investment option to cash?
What is everyone else doing with their super?
Genuine reply @stealthmatt
The day Ukraine happened I switched from high growth to cash.
I'm not Qsuper but last week reviewed my super and noticed that generally all the options were showing slow improvements over recent months so I switched it back to High Growth (nearly went for a mid option but for the reasons below didn't).
For my super, all options dropped and stayed down by roughly the same amounts. High Growth didn't drop more than safer options.
I have not personally considered that we may be about to enter a crash so I could have just made a big mistake! But I'm still happy with my choice and will leave it as it is for now.
People can't stand seeing assets drop in value so money will be printed at some stage.
If you cash out your super you should only be doing it with the intention of buying back in on a dip.
The rate at which money is inflatijg right now mrans it makes very little sense to hold a large amount of cash unless it's being used for dip-buying.
The common misconception is that everyone who is "trading" or trying to "time the market" is on an equal footing. I'll try to lay out some facts to try and dispel that assumption. Let's assume:
At best I'm trying to beat someone who does that job professionally and likely is a top performer of that field, they have at their disposal as much market as they want, with a proven track record. At worst multi-national conglomerates such as Black Rock and Vanguard are able to also control the news and manipulate public perception and profit off public perceptions they have set themselves. If Warren Buffet doesn't think he can time the market (who is perceived as an investment genius with a life of experience) then I'm at least smart enough to know I shouldn't even waste my time by trying.
For me, the only thing I know is that shares are high growth/high risk and that cash is low risk/low growth which equates to put money in stocks as long as I can until I need to ensure it doesn't drop in value and then take it out then when I'm old and ready to retire. If you are old and you couldn't handle that risk over the next decade then be responsible and avoid that. As Buffett once said, "We've long felt that the only value of stock forecasters is to make fortune tellers look good. Even now, Charlie and I continue to believe that short-term market forecasts are poison and should be kept locked up in a safe place, away from children and also from grown-ups who behave in the market like children."
I think the best thing I can do for myself is to not check how the market is doing or worry about potential gains or losses, I'm not religious but here's a good quote:
"God, grant me the serenity to accept the things I cannot change,
the courage to change the things I can,
and the wisdom to know the difference."
One thing I'd correct is that people with wealth aren't just smart people or people who made better decisions than average people.
Many were born into wealth, or have been lucky with their guesses (e.g., see people with crypto).
Assuming that the rich are smarter or better than the average person is a fallacy. You just need to look at Elon Musk to see that rich people are often just complete morons.
Crypto isn’t luck, it’s a guaranteed thousand bagger /s
Indeed wealthy people don't need to me more intelligent or better educated or harder working. However when it comes to markets, wealthy people - by definition - control more of it. What they do with their wealth influences the market, hence they create the reality.
Being a contrarian 'do your own research' investor is a sure way to end up losing money
Fans of risky assets ‘living in a parallel universe’
https://www.afr.com/wealth/personal-finance/fans-of-risky-as…
"you have to ignore the harsh reality that perfectly liquid, government-guaranteed and risk-free cash deposits are paying interest rates of 4 to 5 per cent annually. To even contemplate allocating capital to something that is illiquid and/or carries high risks of substantial loss, you would want to be banking near-certain risk premia of three to five percentage points above that 4 to 5 per cent risk-free hurdle rate. And because most asset classes have yet to fully adjust to the new normal of structurally elevated interest rates, it is awfully hard to find anything that satisfies this test."
the big recession that is coming
Pinky promise?
Picking the exit point is all fine and dandy, but what is incredibly hard is finding the re-entry point. By the time you realise that you should be back in you would have missed the majority of the gains.
News.com.au will let us know.
Sorry you lost me at "according to news.com.au"
Another shit post with no interaction from OP
Answer to your question is it depends on your time horizon. How much time you got left to retirement and risk appetite.
What others are doing are irrelevant but majority are on a balance fund and would be doing nothing
:D
I get my stock tips from Dave Sharma
If you need to ask, then you clearly do not have an investment strategy, and/or are not competent in regards to investing.
If you are relying on articles from news.com.au to inform your investing decisions, then you are not doing your due diligence properly.
As most people here have already said, NO don't do it.
Stick to your current investment strategy (do nothing).
“This is good for Bitcoin”.
Because Bitcoin is a risk sentiment asset, if there is a recession Bitcoin will do the worst out of any investment. The market goes up, Bitcoin goes up, the market goes down, Bitcoin goes down faster.
the big recession that is coming
What? When? Where?
First use a source that is reliable, anything correct from news.com.au will only be by pure coincidence with some of the garbage they post. Trying to time the market is how people lose a lot of money that have a lot more knowledge than you. remember you don't just have to time it right getting out you also need to time it right getting back in. If you are near retirement then absolutely cash is a good option as safety first, if long term then the falls and rises even themselves out and trying to time it is just gambling.
The share market tends to lead the economy, meaning that some of the suspected pending recession may already be baked into the share market.
If things didn't turn out as negative as expected, you could find yourself cashing out at the bottom.
Having said that, good on you for considering these things - as has been posted elsewhere, it's all in the timing.
What recession?
Exactly
Exactly
Australian Retirement Trust (QSuper and SunSuper merged and this is their new name) have a financial planning division. If you’re looking on advice specific to your situation, you’re better off talking to a professional over the opinions of internet weirdo.
However as an internet weirdo myself, I would be looking at whether I was due to retire within the next 10 years. Yes = talk with a professional about modifying my portfolio to suit my decreased risk tolerance. No = set and forget, super is a long term investment and checking it regularly is going to just stress you/me out.
If you're reading it on news.com.au, it's already been priced in.
Market timing eh? Usually ends well…
I was in financial planning during the global financial crisis in 2008 when markets were crashing everywhere.
Our advice to most clients was stick with your long term strategy, but for some we did move to cash basically so they could sleep at night. Gradually moved them back into the market as things recovered.
Needless to say those who didn't panic and stayed the course ended up better off but those who couldn't handle the stress and went to cash stayed sane (albeit poorer and sane).
Market timing is a mugs game, even experts can't do it consistently well
If you pull out when market is low and then put back in when it is high, don't you come out ahead? Why doesn't everyone just do that and turn their 800k into an easy million.
That's right! I'll just look into my crystal ball right now.
Cash works for me at the moment as I'm retired and the returns are more than I'm spending and I can sleep at night without worrying about the markets etc. I'm getting close to 5% on TD's and HISA's and while this is below inflation it doesn't impact me so much as my overall balance is still increasing and inflation will hopefully drop to more normal levels. I will probably get back into shares etc but will stay mostly in conservative investments as I'm 60 soon and don't really need to take on too much risk.
I've recently moved all my (substantial for a late-30yo) super to Australian Ethical because I think by the time I'm due to retire (85 or so), the government will be force-feeding money to Rupert Murdoch daily to survive.
According to news.com.au
LOL
Everyone is bagging news.com.au.
Possibly rightly so.
But what about all the people that followed the advice of none less than the prestigious and trustworthy Governor of the Reserve Bank of Australia Philip Lowe? And on that advice went and bought the most expensive house they could borrow money for? They are not exactly laughing right now.
Moral of the story…nobody really knows. They may tell you they do, but at best they just guess or at worse they are pushing their own agenda.
Same concept applies to many other "truths" we have been told in the last few years:
Vaccines "safe and effective" - yeah right!
Climate change "imminent catastrophic consequences" they have been saying it for 20 years…
Sleep through the record level floods,bushfires,melting ice caps, etc where they have never occurred before? Or just denying the record temps every year in the last decade?
Your argument is cooked
You have been brainwashed. And the record temps have been "cooked" as demonstrated by the recent case of the Bureau of Metereology being caught out tampering with temperature data to suit the climate change agenda. And they refused to release the original true data. If it was all true there would be no need to fudge the data.
They started calling it "global warming". Then there were many cases of colder than usual temperatures that did not fit in with the narrative, so to they decided to change the name to "Climate Change" to cover all bases.
WOW,
FADS
Another genius calling out the science establishment from a bedrock of populist ignorance. The accountants at NewsCorp and Woodside thank you for your drivel
@BigBirdy: Is it the science estabilishment that the UN and WEF own?
‘We own The Science and we think that the world should know it.’ Those were the words of the UN Under-Secretary-General for Global Communications Melissa Fleming last month, speaking on a panel on disinformation at a World Economic Forum conference. Fleming was boasting about how the UN had partnered with Google to change the search results for topics like Covid and climate change.
PS here is the link for the record:
https://youtu.be/WnarHXcGN8M
@BigBirdy: Recent Pox News court case is step one on Newscorp becoming the suppository of all wisdom.
Lachy et all will inherit a liability.
Anyway cookers gunna cook. Whether they have a compromised media brainwashing them or not.They'll be setting up a promise land called Cookerburrough any day now.
Hopefully the federal ALP get one more term & they reform media laws. Then the Fed ICAC should drain a fair bit of the Canberra swamp scum. Uncle Rupert will have SFA LNP puppets (Muppets) left to bribe.
I reckon cookers would make good conscripted infantry candidates.
No.
Imagine if everyone switched their super to cash? oh wait, look what happened when Liberals allowed 10k withdrawal during covid = ASX plummeted much harder then US did. Good for whales with loads of cash loading up on discounted stocks. News.com.au has a hidden agenda.
First news.com.au, next we will be getting our news from a current affair and then beetota advocate
If anything is on news.com.au, you've already missed out by months
Repeat anything Murdochs rags spew out, prepare to (a) lose or (b) lose billions. Ask Pox News
Totally depends on age and how far from retirement you are. If close, then secure the money. If it's far off, then ride it out and markets will most likely return stronger.
If I needed the money in the next 5 or so years, then yes, I would be putting all my super into a safe asset.
However, considering I am 25+ years from retirement, I will keep my money in high growth. It could take a hit but I'll also be buying cheaper stocks during any recession. Then when the markets bounce back I'll be sitting better
yep do it m8
YES
Wait, NO!
errm, hang on? Ok, maybe, yes definitely maybe.I think
Sell in May and walk away, come back on St. Leger’s Day
You are better off leaving it because you can buy more "units" at a lower price when there is a downturn. As others have said, the investment mix will depend on how close you are to retirement. Ive left mine in higher risk because the reward will be higher when it does bounce back
Doomsayers predicted eleven of the last three recessions …
A friend asked about switching their super to cash 'that's safest, right ?'
I told her that the super cash option had returned about 3%pa over the last 10 years
while the High Growth option had averaged about 10%pa over the last 10 years
if inflation averaged 3.5%pa over the last 10 years, then cash option would have LOST you 0.5%pa
while High Growth would have grown your funds an average of 7%pa above inflation
using the rule of 72, 7.2%pa more growth would give you double the money in about 10 years
hindsight is of course 20:20 and everyone's an expert in what you Woulda/Shoulda/Coulda Done - after the event
'The Rainmaker MySuper investment performance index ended the 2021-22 financial year with an annual average return of -3.9%, its lowest return since 2009. This was a huge turnaround from the previous financial year when the Rainmaker MySuper Index returned 18.8% that was its best ever.' - https://www.moneymag.com.au/super/learning/latest-super-fund…
most super did great in FY2020-21, went down the toilet in FY2021-22, and is crawling back out of the pit in FY2022-23
unless you're one of those smart gamblers who switched at just the right time to Cash, and will know just the right time to switch back to Growth, the general rule with richest billionaires like Warren Buffet is 'time in the market beats trying to time the market' - I chose growth and set and forget.
I tried to do i this during covid, i converted into cash about 75% of the way down but of course didn't pick the bottom and ended up buying back in about 50% the way back up… Thus losing out overall. I won't do it again.
The issue with your example is you had already taken large losses before selling, whereas in the current environment the large losses have yet to be realised (for some assets). Take the ASX200, it is only down about 4% from its all time highs from August 2021.
If he sold out now, he will miss out on any potential losses (if any). However, as you have noted, getting back in is the problem.
1. If the share market decides not to fall, and instead continues to go up (illogically?), when will he decide to get back in?
2. If the share market continues to trade sideways, when will he decide it is time to get back in?
3. If the share market does fall initially, and the media is going crazy with headlines describing that the 'end of the world is nigh', then the market decides to bounce (dead-cat-bounce?), when do he get back in (is it safe yet? Or is there going to be another leg down?).
If he wants to do this, then he needs a strategy which covers the above 3 scenarios (and others), which dictate what needs to happen for him to re-enter the market. All of this needs to be done ahead of time, as you do not want to be making rash decisions in the heat of market upheaval.
Hell no. One of my mates moved his super to cash in 2020 when he could smell blood, sure he saved himself initially but then missed one hell of a bull run.
I moved to cash on 28th February 2020, missing the sell-off. In that instance it was a pretty easy call, as markets were highly valued, the virus was starting to get out of China, and any negative news was likely to weigh heavily on the markets (it was still early days). If you are going to get out, you have to get out early, or otherwise not at all.
I started to get back in just after Easter (was around 14th April 2020). Put 50% back in April 2020, and remaining 50% a month later in May.
Getting back in was hard, as everyone was expecting things to crash again (dead-cat-bounce).
I had a game plan, and essentially told myself that I was getting back in at a much lower price than I had gotten out, so couldn't do any worse than if I had stayed in.
Worked out in the end, but that was a totally different scenario to what is happening now.
That's it, you have to be right both ways. You have to pick the downturn well, too early and you miss any gains prior, too late and you crystalise losses. Then you need to do the same in reverse on the way back up. Otherwise you are worse off than literally doing nothing.
If I was that good at it, I'd quit my job and day trade.
I did the same, still trying to time it to get back in. Gonna just wait now.
My 2c:
I'm interested in economics and finance (studied them too) and read up a lot. I'm getting on and have had super for a long time, I've moved it into cash at times and then back into the market. Sometimes I've timed it right, others not. If you go into cash, getting back into shares is all about timing and that's really hard to predict. My conclusion is that it's not worth moving to cash and you really cannot predict what the market is going to do. If you're worried, go defensive with your super (but not cash) and see what happens. You may take a hit but not as big a hit as cash would give you. If the market tanks, you'll be a bit insulated and then move back into more aggressive options when you think the market is going to improve.
What recession ?
In mid 2022, the panel assigned a 20% probability of recession in the next two years, but by February of this year that figure had grown to 26%. Most recently, the IMF downgraded growth forecasts for Australia from 1.9% in 2023 to a more timid 1.6%.
I'm better than the IMF and It will stay above 2% easily.