I moved all of my shares, superannuation into a defensive position last week as I expect Australian shares to be savaged over the coming months. We could see similar losses on share markets as what happened during the GFC, maybe not as bad or could be worse.
And what is the ultimate defensive position?
Got any yet?
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
Cash and deposits. Moved all of my super out of bonds into cash two weeks ago.
AUD?
That's all of your eggs in a falling basket then?
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
Sure. It's not like I can spend it anywhere else, and you can't take it with you when you leave.
The alternative is to go into USD or CHF, but there is a lot of political risk at the moment, and better the devils you know.
Nothing wrong with cash, but get a few USD at least.
I am 50/50 AUD/USD at the moment with my cash holdings. It is a neutral position.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
Nothing wrong with cash, but get a few USD at least.
I am 50/50 AUD/USD at the moment with my cash holdings. It is a neutral position.
Spot on. The US dollar is one of the few currencies most likely to appreciate in value. I am also increasing my % of US shares. I believe the US will be one of the few markets left standing towering above the rest if things go pear shaped. They will take a hit, but will continue to grow and the stability the US provides a security all on its own. Australian shares and cash but I have reduced my holdings of shares as I think the Aussie market is over valued and heavily exposed to Asia which will feel the full brunt of a Chinese slow down or recession.
Spot on. The US dollar is one of the few currencies most likely to appreciate in value. I am also increasing my % of US shares. I believe the US will be one of the few markets left standing towering above the rest if things go pear shaped. They will take a hit, but will continue to grow and the stability the US provides a security all on its own. Australian shares and cash but I have reduced my holdings of shares as I think the Aussie market is over valued and heavily exposed to Asia which will feel the full brunt of a Chinese slow down or recession.
I'm not sure that buying US shares is a good defense for a stock market correction. You may want to re think that.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
I'm not sure that buying US shares is a good defense for a stock market correction. You may want to re think that.
Not a stock market correction, a Chinese stock market crash. The Chinese stock market is far more insulated then Wall St. Much of the damage will be to China domestically. China has lost 30% on its stock market, yet Wall Street has falls due to Greece, not many on Wall Street are concerned about China. A Chinese economic collapse while painful for corporate profits would be beneficial to the US economy longer term. Business will not invest in China if it is not stable enough or in a recession/financial crisis. Investment from around the globe will flow into the USA, this trend is already happening and has been for the last 12-18 months.
As an investor looking to park billions of dollars in a venture, you will be looking at the stability of the region. Eastern Europe looks risky due to Russian aggression in Ukraine. Russia itself it a basket case. China looks to only offer diminishing returns at present with the real risk of returning losses on investment. South East Asia also offers higher risk now due to tensions over the South China Sea. The Middle East and North Africa are a right off. The two regions which seem to offer good medium term investment returns are the USA & India. The US stands out for stability and developed market, while India potentially offers great returns it still carries some risk with Pakistan, internal troubles and China on the eastern border. Overall though India seems to offer the least Risk outside of the USA and Western Europe. Western Europe though offers low rates of growth although improving lately.
I have no problem investing in US shares, but I also hold US dollars, Aussie dollars and Aussie shares as well as mixed international but that is now greatly reduced. The US market if things get really rough will be the last man standing and they will likely be doing very at well at the expense of most others.
From 15:00 ~ 20:00 minutes will give you an idea of how much overcapacity there is in China in terms of property.
If the stock market falls precipitate property prices falls in China, that will be a one in a generation event that will send shockwaves through the entire world just like the GFC.
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