Cash options in a market downturn?

[Caput Lupinum]

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

 

[Clawhammer]

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.

 

[hiho]

Now is the time to be getting out of cash. Interest rates (3%) v real inflation (7%) are your indicators.

 

[RhythmDoctor]

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.

 

[hiho]

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.

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

 

[REDBACK]

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