Author Topic: To be or not to be ...... out of the market  (Read 224 times)

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Offline Steven Ryan

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To be or not to be ...... out of the market
« on: 16/03/2020, 05:48:04 PM »
Hi all,

I am feeling a little confused with Gary's commentary during the recent supplementary market updates. A few times it was mentioned that hopefully all SPA3 member have followed the exit signals are are out of the market and not subject to the drawdowns we are currently seeing in global market.

Earlier, SWS presented new research showing it was better to buy and hold a core portfolio (e.g. ETFs) and only use timing on satellite positions. There was evidence presented that over the long term this would deliver a better edge than a portfolio which is 100% using timing. This philosophy was adopted in a change to Ian's Investment Plan.

Now obviously it all depends on what you decide to include in your own trading plan, but the recent information in the connect and grow webinars has given me the impression i should not be holding any positions in the current market. I may be misunderstanding the recent commentary, nonetheless i am a little confused by this and would appreciate some others views.

Cheers,
Steve

Offline Gary Stone

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Re: To be or not to be ...... out of the market
« Reply #1 on: 16/03/2020, 06:04:34 PM »
Steven,

Great question and thanks for asking so I can clarify.

I may not have been as specific with my terminology as I thought I was. What I was saying is that I hope that everybody had followed their Exit signals. To be clear, for stocks.

If you have a Buy & Hold ETF(s) in your Core according to your Investment Plan, like in Iain's Investment Plan, then those positions should still be open. Just as IJH is in Iain's portfolio.

The only open stock positions atm are TPM on the ASX and GILD in the US. There was an Entry signal for ADBE on Friday night so the "On-display" US portfolios will be opening positions in ADBE.

Regards
Gary
« Last Edit: 16/03/2020, 08:39:07 PM by Gary Stone »
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Offline Nick Rossetto

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Re: To be or not to be ...... out of the market
« Reply #2 on: 17/03/2020, 04:15:45 PM »
Big swings at the moment depending on which end of the day you transact. With a poor lead from Wall Street I got out on the Open at $6.97 then it closes 10% higher! Be interesting to see if any LONG trades trigger tonight.

Offline Katharine Meyer

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Re: To be or not to be ...... out of the market
« Reply #3 on: 25/03/2020, 09:10:10 AM »
Hi Gary
regarding core portfolio - and still holding some ETFs - my portfolio is sitting on some quite large realised capital gains for this financial year (thanks to SWS).
In order to reduce the tax we are going to pay this financial year, would it make sense to realise the capital losses for these ETFs - by selling and buying back in?
I know that this will then possibly increase capital gains down the track when/if we sell later - but that may be when we are in the pension phase and won't pay any tax.(we are mid 50s)

Also one of these is STW - I read somewhere that A200 is similar but has slightly lower fees - which may make a difference when holding long term.
Thoughts

Thanks

Offline Gary Stone

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Re: To be or not to be ...... out of the market
« Reply #4 on: 26/03/2020, 09:02:06 PM »
Katherine,

I'm not a certified tax consultant so can't specifically and directly answer your tax question about whether you should realise tax gains and or losses this year by selling. Other input of other investments should be taken into account in making this decision, i.e. a bigger picture tax viewpoint that goes wider than just the ETF situation.

One variable is the entity through which you have invested: SMSF, personal name & current level of tax, trust, PTY LTD company. Another variable is size of capital gain, especially relevant if .

From an investing perspective, given your age and the fact that drawdown has already been experienced it would be best to continue to hold the index ETFs, if that was the original plan. Stick to it. As you point out, if you hold until you are in retirement phase then under current tax laws you won't pay capital gains tax - please confirm this with a certified tax practitioner.

Perhaps you can review your asset allocation while your satellites are mostly in cash and consider adding to your B&H ETF Core. And if you do decide to sell some of your B&H index ETFs, you can consider to reallocating to Satellites.

I hope this helps.

Regards
Gary
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Offline Gary Stone

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Re: To be or not to be ...... out of the market
« Reply #5 on: 26/03/2020, 09:19:54 PM »
Steve,

Just read your question again from 16 March:
Quote
Earlier, SWS presented new research showing it was better to buy and hold a core portfolio (e.g. ETFs) and only use timing on satellite positions. There was evidence presented that over the long term this would deliver a better edge than a portfolio which is 100% using timing. This philosophy was adopted in a change to Ian's Investment Plan.

A main consideration for moving to B&H in Iain's Investmnet Plan was that Iain, as described in my book,  would only be turning 50 this year and hence is still 5 years away entering the last 10 years before retirement. That is, he is still in Stage 1, which is up to the beginning of the last 10 years before retirement starts.

Regards
Gary
On the journey