Superannuation - would this work?

**mitaux8030** · 25-03-20, 07:07 PM

Superannuation. Not something you ordinarily think about unless you're that way inclined. But the last few weeks certainly has me thinking about it... my super is all in fund managed equities (Australian shares) and has taken a BIG hit in the last 14 days. My super is now worth less than when I first joined! Time to do something about that and fix the haemorrhaging portfolio.

Now to sell the all equities portfolio to move it to a safer investment portfolio strategy eg: bonds, fixed interest etc. is going to cost fees & tax. 17% tax, if I'm not mistaken, as I've not yet reached preservation age. Another big hit that I can do without. But the equities portfolio has a cash account attached to it to act as a 'float' for buying & selling of those equities. I'm able to adjust the mix of the equities vs cash account, which is currently set at 99% and 1% respectively. What would happen if I reversed that balance - put 1% into the equities investment, and 99% in cash? Does that avoid the tax penalties? Of course that's not a very smart investment strategy, but for the short term while the financial storm plays out, it might be better than incurring a 17% tax hit & fees to move to a safer investment.

Not really happy to ride out the storm as it is now, as I think we're in for not just a recession, but a full on depression, that'll make 1929 look like a holiday by comparison, with Australia hit particularly hard compared to Europe & USA.

**fandtm666** · 25-03-20, 07:23 PM

after the gfc mine was decimated so i setup a smf bought a unit
the value is increasing at roughly 7-10% a yr and also earning
about 6k after expenses in cash into the account from rent.

**RogerTheDoger** · 26-03-20, 02:21 AM

Originally Posted by mitaux8030

Now to sell the all equities portfolio to move it to a safer investment portfolio strategy

Very risky because if you do that you convert those paper losses into actual losses. You need to consider the following: How long till you plan on retiring? Are the companies you have shares in shaky or is it just shareholders who have got nervous?

Most companies whose shares dropped during the GFC well and truly recovered after the crisis was over. In fact most went on to new highs when investors regained confidence.

Finally, have a talk to your superannuation company's financial adviser before you do anything. Also the crash in 1929 was shocking because Governments didn't know what to do, we already have the government mounting rescue packages to stop the same thing happening as did in the 1930s.

**exited** · 26-03-20, 03:50 AM

Yep, if there's one thing worse than watching your super go down it's not having it go up afterwards because you've cashed in your investments. Too late to go cash IMO.

If anything I'd be going for 100% equities at this point. You'll get your money back quicker.

Of course, this all depends on how close you are to your preservation age and when you retire.

**hinekadon** · 26-03-20, 06:55 AM

NOTICE !!!! you will die young if you worry about investments what a useless thread at this time ??????? ask a professional ???? they dont even know because they weren't alive in 1918 to experience it .

**VroomVroom** · 26-03-20, 07:36 AM

I'm a bit on the conservative side - I reckon , depending on your age , just leave it where it is and ride out the storm. As for seeing a financial advisor , they only do what is best for their commission earnings , not what is best for you

**statesmanjeff** · 31-03-20, 10:36 AM

When this is over things will climb back much quicker than post GFC. A lot of businesses, factories and shops are hibernating this time instead of disappearing altogether. A lot of the factories I deal with in China are already full steam ahead and at full capacity. The super gains we remember of 1 or 2% previously will be 4 to 6% each jump during recovery. It will take about 10 years to reach a level where it would have been before this. I feel sorry for those retiring now who cant wait it out.

**David071** · 05-04-20, 06:01 PM

I am with a government superannuation company in Western Australia and what a f****n disaster.

It is the worst hit on superannuation I have seen for decades. A lot of my friends and myself have lost tens of thousands of dollars.

My father unfortunately invested his superannuation when he retired in August 1987 and then 2 months later everything crashed in October 1987 (by the way after speaking to a so called investment officer!)and he lost 25% of his life earnings.

I would not recommend super unless for a very long term. I am unfortunately retiring in a couple of years and will never make up the loss I have been subjected to.

Regards.

**lsemmens** · 05-04-20, 06:45 PM

Mate lost everything when Ansett went under, He now manages his own super.

**Godzilla** · 06-04-20, 11:12 AM

If your in for the long haul the worst thing you could do now is sell at a loss.

Sit on it, it will come back.

If anything while this low, its time to buy more.......

I got out of managed super funds and went SMSF under a family trust.

Then went out and bought my own factory without the banks, moved my business in, business pays my SMSF rent.

There are many avenues when it comes to super.

**fandtm666** · 06-04-20, 11:15 AM

Originally Posted by Godzilla

If your in for the long haul the worst thing you could do now is sell at a loss.

Sit on it, it will come back.

If anything while this low, its time to buy more.......

I got out of managed super funds and went SMSF under a family trust.

Then went out and bought my own factory without the banks, moved my business in, business pays my SMSF rent.

There are many avenues when it comes to super.

I was the same bought a unit to rent , freinds of mine followed suit
and like you They bought a factory unit and then they rent it from
their super fund best of both worlds