Author Topic: Australian Investing Thread  (Read 2584344 times)

Bloop Bloop

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Re: Australian Investing Thread
« Reply #4850 on: March 19, 2020, 04:38:56 PM »
How the heck are we ever going to pay back the deficit.

Ozlady

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Re: Australian Investing Thread
« Reply #4851 on: March 19, 2020, 04:52:58 PM »
Special tax levy on the rich? and employed ? :)

middo

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Re: Australian Investing Thread
« Reply #4852 on: March 19, 2020, 05:28:49 PM »
It is always possible that the "surplus fetish" the Coalition has had since 2008 may finally be broken, and reasonable budgetary measures may be needed for a while yet. 

We were probably heading for a recession anyway, and this has just brought it on much sooner.  But growth was always going to be an issue when the Government was proudly proclaiming their financial genius of removing around $50,000,000,000 per year from the economy to reduce the deficit.  That's $2000 per person in Australia, which is about how much consumer spending was contracting by.

In the 1970's, no one thought it unreasonable to have higher taxes than we do now, and our services were less.  Maybe we need a rethink of our priorities as a society.

Little Aussie Battler

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Re: Australian Investing Thread
« Reply #4853 on: March 19, 2020, 06:34:16 PM »
How the heck are we ever going to pay back the deficit.
I assume a 2-5% budget repair levy that will last for years.

The quicker we limit the spread and impact of this virus, and stop the panic (or, at least, change the media narrative), the faster the real economy and market will recover.

I'm not sure that there is a better answer at this point.

chevy1956

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Re: Australian Investing Thread
« Reply #4854 on: March 20, 2020, 07:39:54 PM »
How the heck are we ever going to pay back the deficit.
I assume a 2-5% budget repair levy that will last for years.

The quicker we limit the spread and impact of this virus, and stop the panic (or, at least, change the media narrative), the faster the real economy and market will recover.

I agree. I think this virus is a real problem but the economic impacts could be much worse.

marty998

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Re: Australian Investing Thread
« Reply #4855 on: March 22, 2020, 05:48:09 AM »
How the heck are we ever going to pay back the deficit.
I assume a 2-5% budget repair levy that will last for years.

The quicker we limit the spread and impact of this virus, and stop the panic (or, at least, change the media narrative), the faster the real economy and market will recover.

I agree. I think this virus is a real problem but the economic impacts could be much worse.

I think you're fucked Bloop. Time to leave the country.

Oh wait ;)

Bloop Bloop

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Re: Australian Investing Thread
« Reply #4856 on: March 22, 2020, 08:34:51 AM »
I think there's no doubt that my financial trajectory has just been lopped by a fairly large margin. I'll suffer a modest dip in income due to some of the economic turmoil and then I'll forego the juicy tax cuts that were meant to roll out (since they're undoubtedly off the table) and I'm planning for a significant tax rise or a permanent deficit levy. A triple whammy. At least I have my health, and that's the more important thing. When the country / world is in significant turmoil your thoughts can only turn to taking life one day at a time and being grateful for what you do have, and trying to make others' situation better.

marty998

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Re: Australian Investing Thread
« Reply #4857 on: March 22, 2020, 05:59:24 PM »
I think there's no doubt that my financial trajectory has just been lopped by a fairly large margin. I'll suffer a modest dip in income due to some of the economic turmoil and then I'll forego the juicy tax cuts that were meant to roll out (since they're undoubtedly off the table) and I'm planning for a significant tax rise or a permanent deficit levy. A triple whammy. At least I have my health, and that's the more important thing. When the country / world is in significant turmoil your thoughts can only turn to taking life one day at a time and being grateful for what you do have, and trying to make others' situation better.

Thatís a healthy attitude (no pun intended).

Whilst Iíve escaped the fall in equities for the most part, I still have my job and income.

However Iím expecting a hit to the property market soon. Thatíll bite, but long term things will recover eventually.

chevy1956

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Re: Australian Investing Thread
« Reply #4858 on: March 23, 2020, 04:59:15 AM »
I'm down a tonne of money but I'm not that worried. I own my house. If I keep my job I'll just keep investing in Shares for another couple of years. If I lose my job I'll survive for 5 odd years, sell the house and move elsewhere.

Dropbear

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Re: Australian Investing Thread
« Reply #4859 on: March 24, 2020, 05:37:25 AM »
What does everyone reckon about the option the federal government has announced for financially stressed people to withdraw $10-20k from their super?

Obviously for everyday types (either low income or just living-week-to-week) it's a terrible option to cash out their super after the market has slumped, and also to forgo the compounding effect that would otherwise happen with it.  So it will probably hit youth, women, and the disadvantaged the hardest.

But what about for the mustachian?  What if they take $10-20k out of their super (let's assume they've chosen the index option inside super) and re-invest it in the index outside super?  Pay more income tax on it while you're still in the working phase, sure, but now that money is unlocked and ready for FIRE...

For me, I'm thinking it would probably be better to leave it in super, because if I'm fortunate enough to live to retirement age then it'll probably be marginally more value by then.  But given the American mustachians have all sorts of paths for shifting their retirement accounts around, I wonder if anyone is thinking of taking the opportunity to do the same thing here?

Dropbear

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Re: Australian Investing Thread
« Reply #4860 on: March 24, 2020, 05:47:26 AM »
As for the question of whether the super system can help with current economic circumstances, there was a really interesting article in The Conversation suggesting the government could allow people to take a zero interest loan against their super.  The idea is that the cash comes in from the Reserve Bank, the super stays invested as security, and the loan can be sorted out in time...

If the government is reluctant to give people that much money directly, then I like this zero interest loan concept much better than the government's own super cash-out option!

How super could soften the financial blow of coronavirus
https://theconversation.com/how-super-could-soften-the-financial-blow-of-coronavirus-134134

There was also a great comment:
Would we be able to take out these interest free loans on our super to invest in our super?

Alchemisst

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Re: Australian Investing Thread
« Reply #4861 on: March 24, 2020, 08:20:07 PM »
I have some Vanguard Total U.S stock market (VTS), Vanguard world ex U.S (VEU) and total world hedged to Australian currency (VGAD).

As the USD has increased to the AUD the Unhedged etf's have not fallen as much as much as VGAD, I am considering selling some and buying the hedged VGAD as the AUD is currently less than 60 cents and I don't see it staying this low long term.

Is this a good idea or am I just making a prediction?

bigchrisb

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Re: Australian Investing Thread
« Reply #4862 on: March 25, 2020, 01:48:59 AM »
I have some Vanguard Total U.S stock market (VTS), Vanguard world ex U.S (VEU) and total world hedged to Australian currency (VGAD).

As the USD has increased to the AUD the Unhedged etf's have not fallen as much as much as VGAD, I am considering selling some and buying the hedged VGAD as the AUD is currently less than 60 cents and I don't see it staying this low long term.

Is this a good idea or am I just making a prediction?

You are making a prediction.  However, I'm also making the same prediction on forex, and have switched to buying VGAD instead of VGS, and have been sending Ä earned over the last 9 months into $AUD.  Currency markets were really dislocated a week or so ago - I managed to send some Ä home at 51.5 - its since bounced back to about 55.  Given that both Europe and the US are major infection centres, and also some of the most integrated economies, I see no rational reason for these currencies to be stronger.

Long term I prefer to hold unhedged international shares, both for diversification and due to the higher turnover/tax issues of hedged.  Hence I will sell my VGAD back to VGS at some point, but not sure how I will force myself to do it.  I suspect it will be if the AUD gets to above 0.8 against the USD.  An arbitrary line in the sand, but at least one I can try to commit to and force the action (and realise a 33% relative currency gain, if it plays out). 

Alchemisst

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Re: Australian Investing Thread
« Reply #4863 on: March 25, 2020, 06:09:13 PM »
What brokers do you guys use? I have been using comsec just because I've been with them for a long time and ease of use, I know they aren't the cheapest and have been meaning to change for a while, any recommendations?

Wadiman

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Re: Australian Investing Thread
« Reply #4864 on: March 25, 2020, 08:11:52 PM »
I use selfwealth and have been pretty happy with them - flat fee of 9.95 irrespective of trade value and CHESS sponsored.

mjr

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Re: Australian Investing Thread
« Reply #4865 on: March 26, 2020, 01:03:13 AM »
But what about for the mustachian?  What if they take $10-20k out of their super (let's assume they've chosen the index option inside super) and re-invest it in the index outside super?  Pay

It's really hard to get money into super, I can't imagine that anyone who's fair dinkum about retiring early would care about $20k taken out of super and reinvested in taxable accounts.

Dropbear

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Re: Australian Investing Thread
« Reply #4866 on: March 26, 2020, 02:31:46 AM »
It's really hard to get money into super, I can't imagine that anyone who's fair dinkum about retiring early would care about $20k taken out of super and reinvested in taxable accounts.

Haha, good point.

Dropbear

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Re: Australian Investing Thread
« Reply #4867 on: March 26, 2020, 02:49:29 AM »
Has anyone picked up the VESG Vanguard Ethically Conscious International Shares Index ETF, or its managed fund equivalent?

It's relatively new and small, but has outperformed VGS over its first year for the same 0.18% management fee.  It appears that VESG also has a higher weighting towards tech, financials, and health care than VGS, perhaps this is as a result of having lower (non-renewable) energy holdings?

Has anyone done any deeper exploration of it?  I'm interested if it might be a reasonable way to add some weight towards greener or smarter businesses, while still being a broad-based and cheap index fund?

Fresh Bread

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Re: Australian Investing Thread
« Reply #4868 on: March 26, 2020, 05:40:15 AM »
I have a big chunk in the wholesale fund. It's very new yes, we got into it to avoid fossil fuel extraction although there's still processing in there IIRC. You'd know more than me about performance as I'm too scared to look.

Eucalyptus

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Re: Australian Investing Thread
« Reply #4869 on: March 28, 2020, 04:19:24 AM »
I have a big chunk in the wholesale fund. It's very new yes, we got into it to avoid fossil fuel extraction although there's still processing in there IIRC. You'd know more than me about performance as I'm too scared to look.


The ethical funds are doing much better than VAS and the S&P500 don't worry.


Dropbear

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Re: Australian Investing Thread
« Reply #4870 on: March 28, 2020, 05:15:41 AM »
I have a big chunk in the wholesale fund. It's very new yes, we got into it to avoid fossil fuel extraction although there's still processing in there IIRC. You'd know more than me about performance as I'm too scared to look.
The ethical funds are doing much better than VAS and the S&P500 don't worry.

Further to the ethical fund questions - is it worthwhile holding both ethical and general funds for diversification reasons (VESG and VGS for ethical and general versions of international ex-Australia Vanguard funds respectively), or is it safe enough and potentially lucrative to switch out of VGS and into VESG?

Fresh Bread

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Re: Australian Investing Thread
« Reply #4871 on: March 28, 2020, 04:25:42 PM »
I have a big chunk in the wholesale fund. It's very new yes, we got into it to avoid fossil fuel extraction although there's still processing in there IIRC. You'd know more than me about performance as I'm too scared to look.
The ethical funds are doing much better than VAS and the S&P500 don't worry.

Further to the ethical fund questions - is it worthwhile holding both ethical and general funds for diversification reasons (VESG and VGS for ethical and general versions of international ex-Australia Vanguard funds respectively), or is it safe enough and potentially lucrative to switch out of VGS and into VESG?

We have both. I think it is something like 40% international/40% Aussie /20% ethically conscious. As I said, I'm not looking - not until we are coming back out the other side.

I think should we suddenly be confident enough to invest some cash (our other income streams are looking sketchy right now!) then it will go in the ethical fund.

I think we did a spreadsheet to identify what was excluded from the fund but memory is fuzzy so must have been my husband. Will look. Definitely remember there being some sketchy companies that are still included, but you have to draw the line somewhere, otherwise you'd only be investing in B-Corp ones and I still want to be in an index fund.

Separate question / similar topic:

I've been meaning to change my super to an ethical. Is it a bad idea to move it while the market is down or doesn't it make any difference? My husband's instinctive answer was not to, but if I'm just switching not cashing in, it's fine, yeah?

deborah

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Re: Australian Investing Thread
« Reply #4872 on: March 28, 2020, 04:52:59 PM »
I'd switch whenever you want to. We've been about to move some investments for a while, and it's happening at the moment, because the ones we want to sell are quite close in value to the ones we want to buy. It's the best differential we've seen since November when we decided to do it.

MrThatsDifferent

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Re: Australian Investing Thread
« Reply #4873 on: March 30, 2020, 01:56:16 AM »
I have a mate who reckons himself a stock expert and thinks we should convert our supers to bonds and then convert it back when things stabilize. Does this make sense? Should we be doing this?

deborah

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Re: Australian Investing Thread
« Reply #4874 on: March 30, 2020, 02:03:50 AM »
I have a mate who reckons himself a stock expert and thinks we should convert our supers to bonds and then convert it back when things stabilize. Does this make sense? Should we be doing this?
What does your investment plan say?

chevy1956

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Re: Australian Investing Thread
« Reply #4875 on: March 30, 2020, 04:06:39 AM »
I have a mate who reckons himself a stock expert and thinks we should convert our supers to bonds and then convert it back when things stabilize. Does this make sense? Should we be doing this?

This is why you need an investment plan. I don't have one written down but you need to take decisions like this out of your hand. People will always come up with advice like this. Sometimes they will be right. That doesn't mean you will make money from their advice. Sometimes they will be wrong.

Work out your investment allocation in Super and stick to it. I'm 100% stocks.

Adventures With Poopsie

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Re: Australian Investing Thread
« Reply #4876 on: March 30, 2020, 09:48:06 PM »
Nabtrade has been patchy on the high volume days.  I've been able do most of what I wanted eventually.  I'm accumulating, about 250k committed thus far and have about the same available. Wife and I also keeping 2 years expenses in cash accounts in case offsets freeze up.

Chris, can you explain what you mean about offsets freezing up? Can't say I have heard of it and am using the offset heavily for our EF/spending so would love to hear your thoughts!

MrThatsDifferent

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Re: Australian Investing Thread
« Reply #4877 on: March 31, 2020, 07:08:32 AM »
I have a mate who reckons himself a stock expert and thinks we should convert our supers to bonds and then convert it back when things stabilize. Does this make sense? Should we be doing this?
What does your investment plan say?

Iím just DCA and have my super in index funds and outside investments in Vanguard Lifestrategy. I wasnít planning on changing a thing, I just wanted to understand why heíd would be recommending that course of action? Iím going to ride this out.

bigchrisb

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Re: Australian Investing Thread
« Reply #4878 on: March 31, 2020, 09:47:18 AM »
Nabtrade has been patchy on the high volume days.  I've been able do most of what I wanted eventually.  I'm accumulating, about 250k committed thus far and have about the same available. Wife and I also keeping 2 years expenses in cash accounts in case offsets freeze up.

Chris, can you explain what you mean about offsets freezing up? Can't say I have heard of it and am using the offset heavily for our EF/spending so would love to hear your thoughts!

The bond markets have been crazy (as in GFC crazy) and were starting to freeze up until some pretty major central bank intervention. Our banks, and particularly the second tier lenders are heavily dependent upon there being liquidity in these markets.  I'm not worried about loss of the money in an offset or redraw, but I am worried about access being suspended for a period of time, or pre-payments not being released for redraw.

So I've made sure that my emergency fund cash is actually cash deposits - even though I'll lose a percent or two in interest.  I'm talking $30k kind of numbers.  The bulk of my investable cash is still in the offset.

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Re: Australian Investing Thread
« Reply #4879 on: March 31, 2020, 06:51:50 PM »
Thanks so much for your response and explanation, Chris!

marty998

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Re: Australian Investing Thread
« Reply #4880 on: April 07, 2020, 02:30:58 AM »
Well we have our answer to what index fund investors do in a market fall. Remember all those doom and gloom articles saying we would sell sell sell and amplify the crash?

During March, the Vanguard ASX 300 ETF (VAS) went from 56 million units on issue to 64 million units on issue.

Seems we are the type to never let a crisis go to waste.

mjr

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Re: Australian Investing Thread
« Reply #4881 on: April 07, 2020, 02:56:40 AM »
Ha !  Good find.  Well done to all of us.

chevy1956

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Re: Australian Investing Thread
« Reply #4882 on: April 07, 2020, 04:00:42 PM »
I like that update. I've bought more and I will buy again. I'm more concerned about buying bonds than stocks now.

UnleashHell

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Re: Australian Investing Thread
« Reply #4883 on: April 08, 2020, 05:27:59 AM »
the s&p dropped yesterday.
THE TOP IS IN!

happy

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Re: Australian Investing Thread
« Reply #4884 on: April 08, 2020, 05:44:40 PM »
the s&p dropped yesterday.
THE TOP IS IN!

Troll ;).  There's a whole thread for that!

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Re: Australian Investing Thread
« Reply #4885 on: April 10, 2020, 07:26:10 PM »
Hey cool to see there is an australian investing thread!

Just reading lots and formulating my plan.
I just want to buy as much VTS as I can.

Just wondering everyones opinion on currency risk investing in US ETF?
Is there even any currency risk as VTS is managed by vanguard australia and is in AUD not USD like VTI?


thanks

Andy R

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Re: Australian Investing Thread
« Reply #4886 on: April 10, 2020, 08:13:09 PM »
I just want to buy as much VTS as I can.

Just wondering everyones opinion on currency risk investing in US ETF?
Is there even any currency risk as VTS is managed by vanguard australia and is in AUD not USD like VTI?

You could always split it with some IHVV (AUD-hedged S&P500). VTS is around 75% S&P500 anyway, so close enough.

mjr

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Re: Australian Investing Thread
« Reply #4887 on: April 12, 2020, 03:28:43 PM »
Just wondering everyones opinion on currency risk investing in US ETF?
Is there even any currency risk as VTS is managed by vanguard australia and is in AUD not USD like VTI?

You'd best do some more reading.

VTS is just NYSEARCA:VTI cross-listed to the ASX.  Although we buy it on the ASX with Australian dollars, it moves in line with the price of VTI in US dollars.  So, yes, there is currency risk.

I personally don't really worry about currency risk - in the long term it all evens out.  That said, I wasn't shovelling money into VTS when the AUD was 57 US cents either.

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Re: Australian Investing Thread
« Reply #4888 on: April 13, 2020, 11:50:13 PM »
Hey all, long time lurker, first time poster so please be kind.

Got $5000 to drop on either VGS or VAS. Which would you recommend?

Bloop Bloop

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Re: Australian Investing Thread
« Reply #4889 on: April 14, 2020, 12:07:53 AM »
reckon I got the bottom right a few weeks ago when I called it

Notch

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Re: Australian Investing Thread
« Reply #4890 on: April 14, 2020, 01:31:42 AM »
Hey all, long time lurker, first time poster so please be kind.

Got $5000 to drop on either VGS or VAS. Which would you recommend?

VAS.  It's at 2016 prices, while VGS is at 2019 prices.

mjr

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Re: Australian Investing Thread
« Reply #4891 on: April 14, 2020, 02:18:06 PM »
VAS.  It's at 2016 prices, while VGS is at 2019 prices.

The price of an asset in a rational market represents the market's best estimate of the value and growth prospects.  Saying that VAS is a better buy because it's at 2016 prices cf VTS and 2019 prices completely ignores the reasons *why* VAS is at 2016 prices.

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Re: Australian Investing Thread
« Reply #4892 on: April 15, 2020, 02:14:16 AM »
VAS.  It's at 2016 prices, while VGS is at 2019 prices.

The price of an asset in a rational market represents the market's best estimate of the value and growth prospects.  Saying that VAS is a better buy because it's at 2016 prices cf VTS and 2019 prices completely ignores the reasons *why* VAS is at 2016 prices.

Do you rebalance your investments, or maintain an asset allocation?

mrmoonymartian

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Re: Australian Investing Thread
« Reply #4893 on: April 15, 2020, 02:28:21 AM »
VAS.  It's at 2016 prices, while VGS is at 2019 prices.

The price of an asset in a rational market represents the market's best estimate of the value and growth prospects.  Saying that VAS is a better buy because it's at 2016 prices cf VTS and 2019 prices completely ignores the reasons *why* VAS is at 2016 prices.

Do you rebalance your investments, or maintain an asset allocation?
What do you mean 'or'? You rebalance 'to' maintain an asset allocation.

Notch

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Re: Australian Investing Thread
« Reply #4894 on: April 15, 2020, 02:30:21 AM »
VAS.  It's at 2016 prices, while VGS is at 2019 prices.

The price of an asset in a rational market represents the market's best estimate of the value and growth prospects.  Saying that VAS is a better buy because it's at 2016 prices cf VTS and 2019 prices completely ignores the reasons *why* VAS is at 2016 prices.

Do you rebalance your investments, or maintain an asset allocation?
What do you mean 'or'? You rebalance 'to' maintain an asset allocation.

Jeez, I was just asking the same kind of question twice, to make a point. 

mrmoonymartian

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Re: Australian Investing Thread
« Reply #4895 on: April 15, 2020, 03:11:15 AM »
VAS.  It's at 2016 prices, while VGS is at 2019 prices.

The price of an asset in a rational market represents the market's best estimate of the value and growth prospects.  Saying that VAS is a better buy because it's at 2016 prices cf VTS and 2019 prices completely ignores the reasons *why* VAS is at 2016 prices.

Do you rebalance your investments, or maintain an asset allocation?
What do you mean 'or'? You rebalance 'to' maintain an asset allocation.

Jeez, I was just asking the same kind of question twice, to make a point.
Ah I see. Tautology, not exclusive disjunction. Carry on.
« Last Edit: April 15, 2020, 03:16:50 AM by mrmoonymartian »

mjr

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Re: Australian Investing Thread
« Reply #4896 on: April 15, 2020, 05:35:19 PM »
Do you rebalance your investments, or maintain an asset allocation?

I do.  I also look to vary said allocation somewhat if I see evidence of weakness in one of the allocations relative to another.

Dropbear

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Re: Australian Investing Thread
« Reply #4897 on: April 15, 2020, 09:04:43 PM »
Hey all, long time lurker, first time poster so please be kind.

Got $5000 to drop on either VGS or VAS. Which would you recommend?

There's been lots of discussions earlier on in this thread about how Australians might include both Australian and ex-Australian investments in their investment allocation, so I recommend looking for more info on this topic if you would like to.  In short, it's up to each person to determine their appropriate split.  50/50 (or similar) appears to be a common approach, while some skew it to increase their exposure one way or the other.

$5k is a good amount to get started.  So if you're interested in both these funds and can invest in one of these now, then can you rouse up some funds to put in the other one and form a more diversified position as soon as you can?

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Re: Australian Investing Thread
« Reply #4898 on: April 19, 2020, 03:44:50 PM »
Can someone a bit more cluey than me discuss if there is any opportunity in the governments 'withdraw from super' covid plan, for people who don't actually need the money right now (but has experienced a significant loss in income and therefore qualifies)?

If they're not charging any withdrawal fees or tax, could I not just basically move $40k altogether (both me and my Mrs) from my super to my non-super investment accounts, thereby increasing the flexibility of the money and slightly reducing regulatory risk for future super changes? (at the slight cost of the vanguard spread fee I guess)

Or is the answer just always "don't touch it"?

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  • Walrus Stache
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Re: Australian Investing Thread
« Reply #4899 on: April 19, 2020, 03:52:40 PM »
Or is the answer just always "don't touch it"?

I can't answer the first part of your question, but I found myself wondering why you would want to do this, then realised I know nothing about your individual circumstance. The best ratio of super:non-super investments depends so much on things like your age, how much you already have in super, when you are going to retire etc etc as well as your personal views on the long term stability of the super system.