Superannuation Discussion + market volatility

[RooFlyer]

Well there are usually a number of factors, in this case they were:

- The strong start to 2018 after the record-setting performances of 2017 has raised concerns markets were overdue for a correction.
- deepening investor anxiety over rising bond yields and disappointing quarterly earnings.
- concern about inflation
- a U.S. report showing job growth above expectations provided the catalyst for the sell-off, stoking speculation the Federal Reserve will need to raise its key interest rate faster than expected to counter inflation. Higher bond yields make it more expensive for companies to borrow and make bonds more attractive to investors than stocks

... to which we might add:
Guy 1: Yikes! My bet on a continually rising market has gone pear-shaped, so I better dump these stocks to cover my cough ...

Guy 2: Yikes! He's dumped all those stocks, I better follow suit so as not to get caught!

.. and so on.

If some-one can please tell me why a correction in the US yesterday means my CBA shares are worth less today (absent any other news on CBA), I would be very grateful !

 

[JohnK]

You must have all your super in cash.

I'm not that smart. I hate super at the best of times. Losing my hard earned money is not going to make me feel better.

So you do care now.

I've cared about the AUD-THB exchange ever since it started dropping from just over 33THB to the AUD. I've been transferring a lot of money to Thailand and will continue to do so for the next few years and I have lost a lot of money in the exchange.

Quite sad how currencies fluctuate/get manipulated so easily.

 

[Flying mermaid]

And the AUD takes the full brunt again. It now buys USD0.785 and THB24.85 which is much worse than last week.

I don't get it.

Well it seemed unlikely to me that our dollar would stay up, which is why I paid the balance of my African accommodation at circa 80.5c. I was happy with that and didn’t care if it went up more. Just simplistic measures like the Fed was likely to raise interest rates, while our Reserve Bank wasn’t, seemed to me to leave our currency vulnerable.

 

[QF WP]

... to which we might add:
If some-one can please tell me why a correction in the US yesterday means my CBA shares are worth less today (absent any other news on CBA), I would be very grateful !

Probably nothing to do with USA fall, but instead the impending announcement tomorrow morning, so the market is factoring in bad news (worse than guidance perhaps)?

https://www.asx.com.au/asxpdf/20180205/pdf/43rb8qlc1r55r4.pdf

The Commonwealth Bank of Australia and its subsidiaries (“the Group”) is scheduled to announce its annual results on 7 February 2018. A results briefing will be hosted by the Chief Executive Officer, Ian Narev, and Chief Financial Officer, Rob Jesudason, at 11.00am (Australian Eastern Standard Time) on 7 February 2018.

 

[Pushka]

I'm not that smart. I hate super at the best of times. Losing my hard earned money is not going to make me feel better.

Then you will be impacted then.

 

[QF WP]

I'm not that smart. I hate super at the best of times. Losing my hard earned money is not going to make me feel better.

To quote a sage comment above:

And of course it represents a change in value, NOT a loss as many believe, a loss is when you crystallize the fall in value.

Your super value is changing every day....

 

[QF WP]

One thing is for sure .- any stock reporting softness in their half year figures over the next couple of weeks is going to be punished badly.

Will be interesting to see the futures trading overnight of CBA shares and the markets feeling prior to 11am tomorrow - CBA may take more of a bath @RooFlyer (so may be an opportunity to buy after their correction)

Probably nothing to do with USA fall, but instead the impending announcement tomorrow morning, so the market is factoring in bad news (worse than guidance perhaps)?

https://www.asx.com.au/asxpdf/20180205/pdf/43rb8qlc1r55r4.pdf

The Commonwealth Bank of Australia and its subsidiaries (“the Group”) is scheduled to announce its annual results on 7 February 2018. A results briefing will be hosted by the Chief Executive Officer, Ian Narev, and Chief Financial Officer, Rob Jesudason, at 11.00am (Australian Eastern Standard Time) on 7 February 2018.

 

[JohnK]

Then you will be impacted then.

It doesn't take Einstein to work that one out. The last correction in 2008 took ~6 years for my super to return to its 2008 balance. I'm retiring in ~6 years so this could potentially be awful news.

By the way I don't watch TV and I hardly ever read newspapers and went to sleep early last night which is why I asked the question earlier. I had no idea this was going on around us. Not one mention of this in the office today either which is strange.

 

[QF WP]

If you can still stomach reading investment reviews, then this one from Anton Tagliaferro of IML is pretty concise and easy to read about the current drop in markets:
My thoughts on the recent Wall Street correction

 

[Pushka]

It doesn't take Einstein to work that one out. The last correction in 2008 took ~6 years for my super to return to its 2008 balance. I'm retiring in ~6 years so this could potentially be awful news.

By the way I don't watch TV and I hardly ever read newspapers and went to sleep early last night which is why I asked the question earlier. I had no idea this was going on around us. Not one mention of this in the office today either which is strange.

Well, when you said you’d checked your portfolio and there was no change it kinda implied that it wouldn’t/doesn’t impact on you.

 

[tgh]

If you can still stomach reading investment reviews, then this one from Anton Tagliaferro of IML is pretty concise and easy to read about the current drop in markets:
My thoughts on the recent Wall Street correction

For a bond proxy stock , SKI hardly moved today -1.72% , tomorrow may be different.
The strength of ski tells me that it's steady as she goes and there will be no , or minimal, interest rises in the foreseeable future.

 

[JohnK]

Well, when you said you’d checked your portfolio and there was no change it kinda implied that it wouldn’t/doesn’t impact on you.

You said you were afraid to look. I looked and it was the same? Now I'm being told I need to be afraid tomorrow.

If it was up to me all this speculative rubbish would disappear from society. The stock market lost $80 billion in value. Where did it go? Disappear into thin air?

 

[junbugging]

You said you were afraid to look. I looked and it was the same? Now I'm being told I need to be afraid tomorrow.

If it was up to me all this speculative rubbish would disappear from society. The stock market lost $80 billion in value. Where did it go? Disappear into thin air?

It went the same place the $80 billion came from in the first place.

You'd replace it with what, a system where you personally mandate the returns that people deserve?

 

[QF WP]

You said you were afraid to look. I looked and it was the same? Now I'm being told I need to be afraid tomorrow.

Funds don't price in real time, it is generally a day in arrears. I remember the days when they priced weekly.

If it was up to me all this speculative rubbish would disappear from society. The stock market lost $80 billion in value. Where did it go? Disappear into thin air?

The markets are all about perception of value - what a willing buyer pays a willing seller. So prices fluctuate. Again, review GPH's post above.

 

[TheRealTMA]

You said you were afraid to look. I looked and it was the same? Now I'm being told I need to be afraid tomorrow.

If it was up to me all this speculative rubbish would disappear from society. The stock market lost $80 billion in value. Where did it go? Disappear into thin air?

Starting to look to be a good time to buy shares in a day or so!

 

[RooFlyer]

Will be interesting to see the futures trading overnight of CBA shares and the markets feeling prior to 11am tomorrow - CBA may take more of a bath @RooFlyer (so may be an opportunity to buy after their correction)

Nah, am overweight in them already. Anyone not in the market for short term trading should be oblivious to recent fluctuations.

( My comment above res CBA and wall St was a factitious quip re Aussie market 'taking its lead' from Wall St. Often stupid thing to do. )

 

[cove]

I did buy a couple of shares just before the close yesterday in Australia. No one knows where the bottom is so you just buy a bit and wait.
Was happy with the $USD purchase at 0.8105 late last week.
The US market is being affected by computer trading.

 

[Major]

The Dow is up about 440 at the moment but is still volatile

 

[TomVexille]

Starting to look to be a good time to buy shares in a day or so!

Shhhh, let them all sell

 

[JohnK]

Funds don't price in real time, it is generally a day in arrears. I remember the days when they priced weekly.

I was game enough to check this morning. I've lost ~AUD1,300 in one super fund or roughly ~1.25%. Not good but I suspect there'll be further adjustments.

The markets are all about perception of value - what a willing buyer pays a willing seller. So prices fluctuate. Again, review GPH's post above.

True. A couple of key points for me and why I've never seriously considered shares.

Perception of value is right. Just because the stock market has a value doesn't mean that everyone can value their shares that way. If everyone wanted their money now the shares are not worth what you think they are worth.

Secondly imagine a company listing 1,000,000 million shares at $10.00 each and all shares are purchased. The next day someone sells 1,000 shares for $20 and all of a sudden the company has doubled in value? Way too easy to manipulate and people have been doing for a long time.

Yes I know it's a very simplistic view but is more than enough to scare me. You can make money if you are in it for the long haul but there also many who have lost a fortune. I'll never forget how my 3 tech investments disappeared not long after I invested. CEO on $750,000 a year, company losing money and they were giving CEO performance bonuses via shares to encourage CEO to do their job. What a joke. $750,000/year wasn't enough encouragement they had to raid what little was left and not long after my shares were worth nothing.