I’m thinking maybe Bonds with super. If interest rates drop Bonds may improve.
Not sure which way to go.
Remember that PMGOLD is not hedged, so a decent chunk of that increase is our dollar collapsing.
More traditionally USD and gold go opposite directions…
(I have been gifted a 106.24% uplift on my PMGOLD holding!)
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Here is a tip from Macquarie Bank:
The possibility of a recession means investors need to keep a close eye on the US consumer, which accounts for ~70% of US GDP.
What type of superannuation fund do you have?
If you pick a defensive option your supers fund managers will do that for you.
Fixed interest, cash, gold etc and manage the risk accordingly.
The other thing is never think of your super purely in dollar terms. Think of it as units.
If the market has crashed and your balances are lower than what they were - the best thing you can do is increase your contributions.
If you sell out of equities when they are low you will miss out when their price recovers.
Cash and fixed interest and gold they are for maintaining your balance when you’re closer to retirement.
The decision of asset class mix should always be based on when you need the money. Not what the market is doing.
General advice I take for myself anyway.
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ASX is up 43.5% over the last 5 years which covers all of those events and the recent decline driven by the US.
Buy a broad range of ASX 50 shares if you are risk averse if you want a steady / safe investment over the medium term.
Not financial advise just my opinion.
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Should change thread title to “Not Investment Advice - Just My Opinion”
Edit: Haha - well done, @theDJR!
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For those wanting a spread, VAS is a low cost index fund that covers the ASX.
Statistically over the long term index funds outperform managed funds. Managers don’t tend to outperform the average and the fees you pay to them cut their long term returns. When looking at an index fund, the key things to look for are what sector it’s covering and what the fees are.
Beyond that, just throw money at it consistently. Don’t try to time it, because you will generally get it wrong.
There’s other ways to invest and different risk profiles ect… but this is the one I’ve fallen back to after many failures at outthinking the market. Do your own research and all that.
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I’ve not been though this thread so forgive me if it’s been covered. But an important thing to consider if you are in the “growing your wealth” part of your life and not protecting your wealth or retirement. Between real inflation and monetary debasement if your not doing 8% pa you really are going backwards. The purchasing power of the dollar whether that be AUD or USD is significantly less into the future than you think. There are only a few assets that keep up with this or even outperform. Unfortunately due to the debt levels of the western world and the activity of central banks we find ourselves in a predicament where investors have to take quite a bit of risk to really grow their wealth in real terms.
just the way the haves designed it
The system, post 2008 is based on debt and debasement. Countries can’t afford for their boomers to get crushed as they don’t have the savings to bail them out. So their will be no real free market type recession. Central banks will backstop these large black swan type events through QE or their other forms. At some point of course this may stop working, but knowing the situation does give investors a bit of an edge as your downside risk is capped.
I don’t really understand your post.
But I view the GFC as caused by the banking system - so called NINJA loans.
Before that it was loose money which then chased poor returns in the tech bubble - only to be burst in part when US rates went up.
The current malaise caused by central bankers going soft on inflation after slashing the cost of money to almost zero.
They hardly stop it from happening.
But for lack of a better word crooks always look for scheme to push cheap money.
Bankers and coke perhaps.
And with too strict credit no one would be able to do anything either.
During the 08/09 crisis, when the financial system was melting down central banks in what was a radical economic policy implemented quantative easing (QE). That is these central banks used their own balance sheets to purchase debt in the form of treasuries and mortgage backed securities.
To give some context here, the US Fed expanded their balance sheet from 850B to 4.5T. In essence this put in place a buyer of last resort and injected a much needed liquidity into the global financial system. This was seen as they main reason the world didn’t enter a global depression.
During COVID lock downs central banks used the same technique to stimulate the global economy - only this time they were much quicker to respond. The US federal reserve expanded its balance sheet from 4 trillion to 8.9 trillion. This is often referred to as “printing money”. as these are new $$ into the system. Based on these two economic emergencies and the response, central banks have realised they can step in and save the economy from a deep recession. This has also led to a lot of inflation and the US debt has grown enormously but in essence it provides a back stop.
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The USA still got hit with an awful downturn from the GFC.
They had double digit unemployment, house prices tanked and the Dow dropped by over 50% shattering people’s net worth by ~75%
Is that a “backstop?”
Yeah you are right. They didn’t react fast enough during the GFC (it was a new policy) which is a lesson they learned and responded a lot quicker during COVID.
I’m aligned to what you’re saying. Got everything in the highest growth podtfolios.
Got to risk it for the biscuit. (This is advice, you should always go for the biscuit)
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Ever wondered why the US stock market is defying reality?
This extract from The Economist may be the answer:
…..retail investors with a zeal for speculation continue to transform the markets. Such traders now account for about 20% of total American trading volume. That is down from around 24% at the 2021 peak, but well above the 10-16% of the 2010s.
The change has been driven not by government handouts, but by technology. App-based platforms have given individuals easy access to leverage, a wide range of securities to choose from and the ability to buy a mere fraction of a share. It is no surprise that the share price of Robinhood, among the largest of the new online brokers, has risen by 172% this year. Investing now appeals to a greater range of Americans.
According to JPMorgan Chase, more of the bank’s customers are transferring money to an investment account. The share of high-income customers doing so doubled between 2015 and 2023. For low-income customers, the share quadrupled.
Beyond a greater volume of speculation, the long-term consequences of a more retail-heavy market are not yet clear. Some investors fear it is already having a negative effect. Cliff Asness, founder of AQR, a quant fund, thinks it is perhaps the biggest contributor to declining market efficiency. “Technology, gamified 24/7 trading on your phone, and social media in particular are the biggest culprits,” Mr Asness wrote in 2024.
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It’s a sea of red in most of the shares I’m keeping an eye on over the last few days. But I’m mainly watching gold, copper, etc - and even then as a very small investor / speculator.
The interesting thing for me is when will the commodities shares start to reflect the gigantic tech / AI / energy transition growth ? Because none of this actually happens without a shitload of copper, lithium etc. There are projected shortages in the 2030’s , but that might arrive a whole lot sooner with the burgeoning data centre builds etc and copper mines have long setup lead times , let alone the recent slowdown on exploration and permit issuance.
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I’ve been considering this pathway , if you’re in it for long enough ( a decade +) it seems like a set and forget that can offer better than 10 percent year on year.
And it helps that Buffett says that for most people, 90 percent of their money into an S+P 500 index fund is the best plan. To the point that that is what he has stipulated for his estate when he karks it.
I’m in Australian Super, results just in are that the balanced risk returned 9.6 percent for the year. Not that I’ve contributed to it for 15 years, as a self employed the accountant suggested keeping the money handy in an offset account to pay off the house.
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Americans have always had a large interest in equities yeah? I remember reading somewhere that American household wealth is more tightly held to equities than anywhere else in the world.
its a highlight of their society - they have low lights but in terms of encouraging investment into business they do that right.
Unlike here where we are pushed into speculating on the family home.
I’m sure technology has helped a lot. They have strict rules on trying to prevent say pump n dump schemes.
But that’s largely been eroded by internet forums and presidents and pop stars launching crypto currencies.