Cash options in a market downturn?

Discussion in 'Superannuation' started by Caput Lupinum, Dec 21, 2012.

  1. Caput Lupinum

    Caput Lupinum Well-Known Member Silver Stacker

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    At what point do you look at the equity markets or the economy in general and move your super to cash options in minimise your exposure when there's a major market downturn? Cheers
     
    Caput Lupinum, Dec 21, 2012
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  2. Clawhammer

    Clawhammer Well-Known Member Silver Stacker

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    For me, that will be an age based question rather than a market cycle analysis. As we get closer to retirement, your risk tolerance subsides.

    If I'm getting closer to retirement and cashing in.... then would be the time to start swapping to cash. (you don't have to do it all in one hit, you can progressively rebalance your portfolio over a number of years so that you "feel" comfortable)

    As a younger pup... I can afford to ride the cycles.... just let a diversivied portfolio ride the waves and weather the storm. Don't forget, market downturns are a great time to pick up bargains.
     
    Clawhammer, Dec 21, 2012
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  3. hiho

    hiho Active Member Silver Stacker

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    Now is the time to be getting out of cash. Interest rates (3%) v real inflation (7%) are your indicators.
     
    hiho, Dec 21, 2012
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  4. RhythmDoctor

    RhythmDoctor Active Member

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    Very true hiho - the amount of people in the world who DONT subtract inflation from interest rates to make the net yield is much more than you think.

    Very worrying, but I'm glad I'm not one of them.
     
    RhythmDoctor, Dec 21, 2012
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  5. hiho

    hiho Active Member Silver Stacker

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    Not to mention the marginal tax you pay on the interest your cash earns.

    So effectively you cant grow your money, therefore its certainly better off in other substances than plastic
     
    hiho, Dec 21, 2012
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  6. REDBACK

    REDBACK Well-Known Member Silver Stacker

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    I see the mathematical sense in what you're saying but my Spider senses take into account the % loss difference can be made up by opportunistic cash buyingand you can't do that without Fiat.
    So taking a hit in the 'pa' term and tax on interest term to capitalise on good investment buying opportunities may also be positive.
    Were both on the money me thinks- maybe a 50/50 split both ways or somewhere in between?

    REDBACK
     
    REDBACK, Dec 21, 2012
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