Another GFC?

**MrRadio** · 18-05-12, 12:02 PM

I'm sitting here watching my super go down the gurgler even faster than recent times. With the turmoil in the Eurozone our markets are experiencing what can only be called a blood bath. What to do, follow the advice from the "experts" and ride out the storm and stay in so I won't miss the turn around when it comes or pull it out and stick it under the bed. So far I've stuck it out but I don't think I can any more, contrary to the views of Mrs Radio who knows all. See a big argument in my near future ... better re read the MLC thread I think.

**LeroyPatrol** · 18-05-12, 12:12 PM

lol at the MLC joke!

With shares, if you have good quality blue chips that are paying a good dividend then I wouldn't be so concerned as long as the dividend doesn't get cut!
With the dips comes buying opportunities. I'm hoping for a GFC II because that might give me the right opportunity to jump into the market more. (currently only have my little toe in at the moment).
I still don't see why Greece has such an impact on us with China being our main trading partner. Any ecconomists out there among us?

Leroy

**enf** · 18-05-12, 12:25 PM

Everyones situation is different, but I converted mine to cash....the dividend is smaller, but always positive. I'm already on a super pension, but have other super for part time contractual work.

If you are not sure, GET ADVICE. Super is a once only deal...you don't get a second bite of the cherry.

**POWERZONE** · 18-05-12, 12:26 PM

The majority of my super has been locked in the "cash" investment for the last 6 months and has climbed about 2.5% despite the market volatility.

**Guiseppe** · 18-05-12, 12:28 PM

The long term trend for shares, like house prices, is always up. If you can afford to ride out the slumps then I would stay in the market. If you cannot then you are in the proverbial cleft stick - you do not want to sell into a falling market unless you are sure that the bottom has not been reached.

I'm with Leroy in that I am hoping to be able to purchase some more in the future.

The problem with shares is summed up by:

"It is time in the market not timing the market that matters."

"Trying to buy at the bottom and sell at the top (of trends) is impossible."

**MrRadio** · 18-05-12, 12:38 PM

My future is in a recognised super fund which, to it's credit has "minimised" the losses but in saying that they have still been substantial. My choice is to stay with the fund or make full withdrawl and put it in cash somewhere. My adviser says stay put, but what else would he say, he gets commission. Though nearly all the TV finance commentators also say stay put but the thing on my mind is that if we go into another meltdown and we lose what we lost last time it's over and out for me. Today's market is more than 2% down, yesterday's ... well I don't even want to go there, where will it end?

**tony** · 18-05-12, 12:44 PM

Originally Posted by LeroyPatrol

lol at the MLC joke!

With shares, if you have good quality blue chips that are paying a good dividend then I wouldn't be so concerned as long as the dividend doesn't get cut!
With the dips comes buying opportunities. I'm hoping for a GFC II because that might give me the right opportunity to jump into the market more. (currently only have my little toe in at the moment).
I still don't see why Greece has such an impact on us with China being our main trading partner. Any ecconomists out there among us?

Leroy

Hey Leroy, I am not an ecconomist but do invest heavily in shares, options and recently futures. China's main trading partner is Europe so the monetary knock on effect of Greece's debt and further fiscal restraints is relative to all.

**POWERZONE** · 18-05-12, 12:46 PM

Your super fund should be able to change your investment to cash if that's where you want to invest it.

I'm with the R.E.S.T. Super fund and I simply log on to my account and change where they invest the money; cash, property, balanced - whatever.

Only catch is it takes about 10 days to execute. I think it's like that with all funds.

**LeroyPatrol** · 18-05-12, 12:53 PM

Originally Posted by POWERZONE

Your super fund should be able to change your investment to cash if that's where you want to invest it.

I'm with the R.E.S.T. Super fund and I simply log on to my account and change where they invest the money; cash, property, balanced - whatever.

Only catch is it takes about 10 days to execute. I think it's like that with all funds.

And what's the cost associated with changing?

Leroy

**POWERZONE** · 18-05-12, 12:58 PM

Bugger all for 10 switches a year. $25 per switch after that.

**Tradesman** · 18-05-12, 01:07 PM

it hard to know what to do , if you listened to all the so called experts you'd go round the twist. you dont know who to trust and who is pushing what wheelbarrow for thier own agenda.

another possible GFC + a carbon tax = shit creek without a paddle for Australia

**marty 17** · 18-05-12, 01:17 PM

Mr Radio IMHO you are going to have to take the punt and let it ride out or switch now and kick yourself if it comes good in the near future.
Hopefully that when things "kick again" at your age I would probably switch to cash/conservative when the market regains waht you consider a fair amount of its losses to date.
Set your self a recovery margin now and just wait and watch until it reaches that point.

All the best.

**tony** · 18-05-12, 01:32 PM

Originally Posted by Tradesman

it hard to know what to do , if you listened to all the so called experts you'd go round the twist. you dont know who to trust and who is pushing what wheelbarrow for thier own agenda.

another possible GFC + a carbon tax = shit creek without a paddle for Australia

There will be an election announced shortly so 'maybe' no carbon tax

**nomeat** · 18-05-12, 03:07 PM

Sit it out, for what?

Quantitative easing, while helpful in the last GFC , is now getting out of control and has no end -> creation of too much electronic money -> runaway inflation!

The debt ceiling is constantly being lifted in the USA and the debt has no end.

Australia relies too heavily on it’s mining exports and has nothing else to offer should the worm turn in China and their economy relies heavily on how things are going in the USA and Euroland.

When Gold hit $1800 some months ago I was telling mates that it is too expensive to invest in it.
Lately however, I almost see it as a bargain... again.

**ruben** · 18-05-12, 03:18 PM

Originally Posted by tony

There will be an election announced shortly so 'maybe' no carbon tax

The election has been earmarked already for September 2013. True that shares and housing "in the long term" go up but if anyone thinks the gains (particularly in our property market) will see handsome gains like the 1990's and early 2000's better think carefully again. Our housing market has been rising disproportionately to our cost of living and to most other countries. There is going to be a lull in Australia's economy for quite some time. We are now taxed to our eyeballs (statistics already show that Australia is near the top of the ladder for highest taxed countries in the world) and even if you have good property portfolios these days the land tax costs (among other holding costs) are ridiculous. People who made good returns up until 2007-08 and cashed in on property are laughing but from now on the rate of growth will be stuff all and in many instances will go backwards. Already our property market has seen 10-20% drops and it will get worse. The overseas Asian buyers are not investing as much here as they were up until early 2010 which is adding to our woes. Even their economy is no longer as healthy and buoyant as it used to be.

**LeroyPatrol** · 18-05-12, 03:26 PM

Property pulled back in the late 80's early 90's and then slowly started to pick up. Same will happen again but might take 5 years!

Leroy

**tony** · 18-05-12, 03:31 PM

Originally Posted by ruben

The election has been earmarked already for September 2013.

I am fully aware of that...........my mail is shortly

**MrRadio** · 18-05-12, 05:02 PM

Originally Posted by tony

I am fully aware of that...........my mail is shortly

Tony, is your surname Abbott by any chance?

**ruben** · 18-05-12, 05:40 PM

Originally Posted by LeroyPatrol

Property pulled back in the late 80's early 90's and then slowly started to pick up. Same will happen again but might take 5 years!

Leroy

The rate of growth from the early 90's was phenomenal. Property increased (and shares) 6 to 15 times what your outlay was and we weren't burdened with ridiculous land tax costs with property. We will NEVER see that level of growth again. I'm very confident that growth in property over the next 5 years will be quite small relative to outlay. It was not uncommon to buy properties in the early 90's for under $100K and get a 7 figure return within a 10 year period. Those days of huge investment growth are long gone.

**aflman** · 18-05-12, 08:35 PM

Originally Posted by ruben

The rate of growth from the early 90's was phenomenal. Property increased (and shares) 6 to 15 times what your outlay was and we weren't burdened with ridiculous land tax costs with property. We will NEVER see that level of growth again. I'm very confident that growth in property over the next 5 years will be quite small relative to outlay. It was not uncommon to buy properties in the early 90's for under $100K and get a 7 figure return within a 10 year period. Those days of huge investment growth are long gone.

Yeah what he said. Can't argue with that. I moved recently and had to fork out a small fortune to buy in the area yet my neighbour bought 10 years earlier for less than a quarter of what I paid. Reckons he would never have been able to have afforded the move if he had left it just 2 years longer.

My boss bought a large amount of shares in one of the main banks in the nineties for one tenth of what they are worth now and says he was lucky bigtime. Reckons there is no way they will ever grow 10 times again in his lifetime. They dropped quite a bit during the GFC but he paid stuff all at the time and was still way out in front even then.

Take CBA shares now at around $55 each. Firstly I couldn't afford to buy many of these at this price and secondly, I would be a dreamer thinking they would go to $550 a share in the next 10 to 15 years.