What the experts say about the coronavirus and your nest egg

What fund experts say about the impact of the coronavirus on your retirement plans.

retiree panic

The World Heath Authority (WHO) says the planet is in uncharted territory as coronavirus outbreaks continue to cause global gloom – both on the health and financial fronts. And Nestegg reports that as the sell-off of Australian shares continues, hopes of a V-shape recovery are falling.

Nestegg analyst Paul O’Connor said the geographic broadening of the coronavirus had undermined the hoped-for recovery scenario, given growing doubts about the effectiveness of containment measures outside China and the scale and speed of policy stimulus measures.

The Reserve Bank of Australia (RBA) cut official interest rates to a record 0.5 per cent on Tuesday – and another cut is expected – as share markets continue to plummet, wiping out all the gains of January and February, when it repeatedly broke records.

The wipeouts on world share markets are having a big impact on retirees’ nest eggs, yet industry experts say fund members should resist the temptation to switch to more conservative investment options that could leave them worse off in the long run.

Most super funds have about half of their invested retirement savings exposed to Australian and overseas shares and both have been taking a beating.

Fund researcher SuperRatings told The Age and The Sydney Morning Herald that the value of a typical ‘balanced’ fund – the most popular choice for retirees and pre-retirees – was down about 3.5 per cent. That equated to a loss of $3500 for each $100,000 held in super or $35,000 on a $1 million portfolio.

However, industry experts say fund members should sit tight and look longer term.

SuperRatings executive director Kirby Rappell said historical global health scares tended to have only a short-lived impact on super account balances and that funds were very resilient during the Ebola outbreak in 2018 and SARS in 2003.

Mr Rappell said that funds were typically down about 2.1 per cent after three months in those outbreaks and recovered quickly.

Super experts say the worst thing fund members can do in a share market meltdown is to panic and switch their super into more conservative, lower-returning investment options.

The Organisation for Economic Cooperation and Development (OECD) says the global economy could still recover to 3.3 per cent growth next year if coronavirus outbreaks were contained and reached a mild level.

Rose Kerlin, group executive at AustralianSuper – the nation’s biggest super fund – said super was a long-term investment.

“If you see your super balance fluctuate, it can be tempting to make a quick change, but it’s important to stay focused on the long term,” she said.

Sydney-based fund manager Investors Mutual told The Age and The Sydney Morning Herald that volatile investment markets, where fear led to indiscriminate selling, were “nothing new”.

Shares in all companies – “the good the bad and the ugly” – were being sold down heavily as investors reduced their overall exposure to equities, the fund manager said in a note to clients.

However, the coronavirus should be kept in perspective, Investors Mutual said.

“While the coronavirus is being taken very seriously by government authorities, so far the virus has led to around 3000 deaths,” it said.

“It is worth noting a 2017 World Health Organisation study attributed between 300,000 and 650,000 deaths per annum from the annual influenza virus,” the fund manager said.

Prime Minister Scott Morrison on Monday said he would meet with Reserve Bank heads to discuss the impact on the economy.

“This is a health crisis, not a financial crisis, but it is a health crisis with very significant economic implications,” he told parliament.

“We will be focusing on ensuring that we keep Australians in jobs, we keep businesses in business, and we keep investment flowing during what will be a very challenging time for the Australian economy.

“It’s important we understand that on the other side of this crisis, when the health issues are addressed, there will be a bounce back, and our plan will be ensuring that Australian businesses and jobs and the economy bounce back strongly.”

Have you contacted a financial adviser or your super fund for advice in relation to your nest egg?

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    Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.





    COMMENTS

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    leek
    4th Mar 2020
    10:52am
    Yep I panicked and switched. A large amount in cash, but kept some property, conservative and some left in my original balance fund. I lost heaps of $$ I think in 2009. yep it came back but took a long time. now I am older, I don't have the time I had 10 years ago. if that makes sense. I am keepin a daily eye on the funds, happy to switch back when things settle down.
    fairplay
    4th Mar 2020
    12:03pm
    Leek, well done , of course timing is always an issue and we generally miss out when things move downward at a rate of knots. The GFC was more of a financial fiasco due to the USA sub prime position whereas the coronavirus is more of a health scare and people are selling down based on fear.Depending how long it takes to switch back it is likely you may miss out on the major part of the rebound when/if it occurs,but can certainly understand your position .....Good Luck !
    Jacky
    4th Mar 2020
    2:29pm
    I am with Australian Super and advised on Thursday night 100% cash, only happened Tuesday afternoon. I have lost over $50,000. Will be leaving in cash until the virus is totally under control. Can't afford to lose any more money from my super fund. The loss would not have been so bad if when you advise your super fund of change that happens immediately. How many super funds that so long to change funds.
    Anonymous
    4th Mar 2020
    4:17pm
    Jacky I feel sorry for you but you should not be in a fund with shares because you are obviously a panic merchant those shares will come back to where they were and probably soon, they always do.
    If you are with an union fund they always take along time to act remember they have to get rid of your shares at decreasing values and convert it to cash. However you have plenty of mates who have done the same thing and would have lost bigtime.
    OJ21
    17th Mar 2020
    4:23pm
    You would think that fun managers (who get paid a fortune) would see a downturn coming and convert their clients holdings into cash for the short term, just as they buy and sell shares to get the most from market fluctuations..
    etc1
    4th Mar 2020
    11:22am
    I agree Leek and did the same. It will bounce back, but I still haven't got back the 30k I lost in the past. It's OK to say " Long term" but isn't the an over used excuse for our well paid fund managers not doing what thier paid to do, watch the markets to keep our investments safe. They say, don't panick 20k loss later, they still think it's OK.?????
    rtrish
    4th Mar 2020
    11:48am
    Due to our age, most of us don’t have the luxury of “long term.” I’m not switching. Fingers crossed and be philosophical. It would be nice if Scotty and the Reserve Bank didn’t cut interest rates.
    Circum
    4th Mar 2020
    5:31pm
    you are correct rtish.Please forgive Scotty and the Reserve Bank as they know not what they do.
    Circum
    4th Mar 2020
    5:31pm
    you are correct rtish.Please forgive Scotty and the Reserve Bank as they know not what they do.
    Hoohoo
    7th Mar 2020
    2:16pm
    The government have been totally useless and I think irresponsible, expecting the Reserve Bank to solve our flagging economy by lowering interest rates, instead of government taking the lead and actually stimulating the economy by rising minimum wages, pensions and Newstart. This has been the government's ineffective solution, long before bushfires and the corona virus threatened the economy.

    Giving tax breaks won't stimulate a flagging economy either, because people are more concerned about paying down personal debt rather than going on a spending spree. The government needs to go on a spending spree if it expects people to feel confident enough to go on a spending spree. Again, the government knows this, but still refuses to take the lead.

    Lowering interest rates only reduces incomes for many retired people, who are trying to supplement their living costs with interest paid from money invested at the bank.

    The Liberal Party have proven to be very poor money managers. This is the first time they've been in power during a downturn, rather than boom times. They haven't learnt anything from the GFC and how Labor dodged a Recession by stimulating the economy. It seems Liberal dogma about the need for small government (tax cuts, sacking the public service, cutting services and reducing debt), all for their almighty Surplus, is getting in the way of actually delivering a proper government that is meant to manage the economy effectively to serve the people and the country.
    Veritas
    7th Mar 2020
    4:42pm
    The previous economic crisis of 2009 was ameliorated by Kevin Rudd that saw Australia 'dodge the GFC bullet'. This 2020 health crisis (not an economic crisis according to the PM) finds Australia under the stewardship of Scott Morrison. History will compare the pair. Let's hope for all our sakes that Morrison is as adept in handling the challenge as Rudd was.
    Silverhead
    4th Mar 2020
    11:34am
    19 Feb I had 136K, been watching daily, now $120K. I was warned by relatives to switch to cash, decided to leave it, although 70, my investments are aggresive and ethical. If it starts going down to $100K, then I might have to switch to cash. Sacked my AMP based FA when he didnt advise about the downturn years ago, I also made sure he was taken off any commission and trailing commissions, my funds did recover but took a while. From 19 Feb 19 - 19 Feb 2020, my funds were returing 25% including charges, so watching carefully.
    older&wiser
    4th Mar 2020
    1:16pm
    I had similar amount to you at end Jan with mixed super investment. End Feb - UP $200. what goes down must come up (just look at house prices) so quite comfortable to stay and go with the flow.
    hyperbole
    7th Mar 2020
    12:23pm
    I no longer have aggressive I am in conservative due to my age which I decided to do after reading a lot of financial advice.
    Brissiegirl
    4th Mar 2020
    12:19pm
    I have a close relative who was once an ethical financial planner who was not impressed by habitual "churning" of client share portfolios. He moved on to better things years ago. He told us this: older people more likely than not, don't have time to recover their money after a severe share market downturn. Shares are not for older people and the emotional strain from taking sudden hits and coping with the risks is not worth any perceived benefit, imo.
    Rae
    4th Mar 2020
    2:00pm
    Neither is cash now when inflation is running faster than interest rates. It's just as much a loss as share prices correcting.
    Captain
    4th Mar 2020
    7:35pm
    The loss of value of shares is not something to panic about in general. The time to worry is when the dividend returns decrease. The share market will come back again, just a matter of when.

    Those that panic and sell are great for investors with cash on hand. Winners and loses.
    nev
    4th Mar 2020
    12:34pm
    Older people can’t afford the long term view - along with the 3.5% loss there is the 5% drawdown of your super which makes it a double whammy and then add to that the impact of the 3% of the Governments deeming rate!!!
    Circum
    4th Mar 2020
    5:41pm
    The deeming rate is being treated as a criminal activity which the government controls and doesn't care what anybody thinks.In some countries politicians and public servants would get executed for betrayal of its citizens.Apparently its ok in Australia to rort your citizens.
    Circum
    4th Mar 2020
    5:41pm
    The deeming rate is being treated as a criminal activity which the government controls and doesn't care what anybody thinks.In some countries politicians and public servants would get executed for betrayal of its citizens.Apparently its ok in Australia to rort your citizens.
    KSS
    4th Mar 2020
    12:39pm
    A loss is only a loss if you cash in the investment. Until then it is only a paper loss.

    If you don't have time to 'wait' for the recovery, then you probably dont have much to worry about either. You likely still have enough to see you out!

    We need a few more calm heads and a lot less panicing over everything from shares to toilet rolls!
    Rae
    4th Mar 2020
    2:03pm
    Totally agree KSS. As far as I can see at the current high prices, which are a foolish buy, the falls just make shares more affordable. Certainly selling after the fall is foolish. If anything a good fund manager should be taking profits and rebalancing in a timely fashion. They certainly get paid enough to do their jobs efficiently.
    KSS
    4th Mar 2020
    1:09pm
    A loss is only a loss if you cash in the investment. Until then it is only a paper loss.

    If you don't have time to 'wait' for the recovery, then you probably dont have much to worry about either. You likely still have enough to see you out!

    We need a bit of perspective here. In Australia, Health Direct reports influenza on average causes 3,500 deaths, about 18,000 hospitalisations and 300,000 GP consultations each year.

    Last flu season up to August 2019, 217,000 Australians were diagnosed with flu, 430 died.

    The Immunisation Coalition in Australia report there have been a total of 12,713 laboratory confirmed notifications of Influenza in Australia for 2020 to 2 March.

    For the current flu season in the USA, the CDC 13 million influenza illnesses, 120,000 hospitalizations, and 6600 flu-related deaths in the USA alone!

    Worldwide, between 3 Feb 2020 and 16 Feb 2020WHO report a total of 58268 new infections for influenza viruses.

    We need a few more calm heads and a lot less panicing over everything from shares to toilet rolls!
    Janus
    4th Mar 2020
    3:19pm
    Absolutely correct, KSS. However this virus is not a flu, tho the symptoms are similar, and it is slightly more dangerous than flu for OLD MALE SMOKERS with health issues (which I am not).

    As for money matters, the worst mistake anyone of our age can do is to follow the daily or even monthly market in their shares. If you have invested for the dividends, nothing much may change in the longer term. If you buy and sell based on share price, then silly you. We have all seen this before, and probably worse.

    As for the toilet paper idiots, they are just as bad as the folk walking about in their useless masks. Dear oh dear, what is it with some people? I wonder how they can manage to cross the road. I heard someone ( a mayor) who cancelled a NZ trip because his chemist had sold out on masks. Who would vote for such an Einstein?
    Mariner
    4th Mar 2020
    4:16pm
    For you guys - people buy toilet papers to replenish their masks as their sale has stopped for lack of supply. Some guys reckon toilet tissue would do the trick just as well. Woolies has started rationing toilet papers, go figure.
    Anonymous
    4th Mar 2020
    4:35pm
    Well if we run out of toilet paper we may have to use newspaper on a nail it worked okay back in the day.
    Farside
    4th Mar 2020
    7:15pm
    Newspapers are not much help if you have online subscriptions ... a soft corn cob is your friend
    hyperbole
    7th Mar 2020
    12:24pm
    Agree with all you have said KSS. I have never had all my eggs in one basket and will not be selling any shares.
    Tricky
    4th Mar 2020
    1:54pm
    Nest egg is impacted upon by recent interest rate cut to fixed term bank deposits. The DEEMING stays unchanged, Tax on part pensioners. LNP gov canvassed banks to pass on interest rate cuts, all banks have done this now, LNP gov issues statement encouraging mortgage holders to spend money to stimulate the economy.

    LNP gov will not pass lower DEEMING rates for part pensioners, part pensioners would also stimulate the economy with lower DEEMING rates.

    LNP Gov short sighted and hypocritical.
    Veritas
    4th Mar 2020
    2:29pm
    Says it all, Tricky. I believe there is no term deposit above 2%pa at the moment. The bears are out in the share market. The saying goes, once the bears are out, it takes time for the bulls to return. Many will see negative returns on their nest-egg in the coming months, perhaps years. The upper deeming rate is 3% pa on your savings as declared by CentreLink. Way to go, SoMo.
    Mariner
    4th Mar 2020
    4:08pm
    Deeming does not affect too many people I know, maybe 2 or 3 but they do not understand it. They have no heating or air conditioning, some not even a carpet or working TV. All the money is in the bank which pays them less and less. All put away for the children, the thought of many born during the war years.
    Tried to interest them into seminars by C/L in the neighborhood for financial guidance. These people helped me years ago, always thought pension age is 65 and the process would be simple. I had a steep learning curve.
    Tricky
    4th Mar 2020
    6:54pm
    According to SMH and Fin Review it impacts on over 60,000 pensioners and part pensioners.
    hyperbole
    7th Mar 2020
    12:27pm
    It is not correct that there are no term deposits over 2%. There are new ways to invest using digital banking.....https://mozo.com.au/fintech/digital-banking-and-neobanks
    older&wiser
    8th Mar 2020
    10:53am
    Hyperbole - all I can say is 'hyperbole'. I am a member of a large seniors group and very very few would do digital banking, mainly because they don't know or understand it. And have no interest what so ever in wanting to know. In fact very, very few even use computers.
    Despite numerous attempts to run computer classes, they have never been run as people are not interested in doing them. I went to a recently run talk on financial matters for seniors at the club, with good speakers and their were 8 people.
    Seniors have a deep ingrained distrust of anything not Banks. My brother falls into this category - I have for most of his working life tried to educate him on computers, finance, super and investing, (plus he was made bankrupt after a disasterous marriage breakup), but he is now 79, and only trusts Banks.
    Rae
    4th Mar 2020
    1:57pm
    No I bought shares two days ago at the 10% fall. I wouldn't touch bonds though as they are insanely expensive and likely to experience capital loses when rates turn up.

    Going to cash is very risky with such low interest rates and a bail in legislation waiting. I see that as far riskier over time than shares,

    I actually made very good returns buying into shares during and just after the 2008 GST crash. It was one of the few times shares were on sale. If that happens again I'll be buying shares to protect cash from a banking crisis.
    Mariner
    4th Mar 2020
    3:59pm
    If we were allowed we would stay in cash, Rae. But in this country you cannot change the stuff into Euro, Pound Sterling, Jap. Yen or $US. You need to be a trader to have an account in foreign currency. Gold is another answer but I think we missed the boat for that for the present.
    We did our dosh in 2009, recovered some but are too old to go through that again now. No longer have any shares or super, just accounts where we are deemed. Would not mind deeming if I was allowed a Sterling account as that currency is not totally dependent on China with their tourists and students.
    nev
    4th Mar 2020
    1:59pm
    Of course KSS you are right about the Flu which has often not been reported as to the toll it takes every year. There are a few things we need to remember about it though - firstly there is a Vaccination for the virulent strains of flu (not all of them) and it’s not compulsory to have it so not sure how many choose not to. Secondly a number of these fatalities will have other chronic diseases having complicated their treatment apart from the obesity issues across nations now which prevents people from staying fit, complicating heart health etc. Compare that to a Pandemic where there is no Immunisation for those at higher risk- 12 to 18 months away. This has now spread to 80 nations. But who am I to have this opinion- oh yes, I happen to be a Microbiologist! Now to the investments- of course, once you get to retirement you will obviously know when you’re going to die and will be able to budget accordingly unlike us other mortals who watch expenditure going up every year and dwindling balances with no way of replenishing those funds. Try a little kindness please.
    Janus
    4th Mar 2020
    3:22pm
    Just a note nev, the flu immunisation you get this year is for last year's flu. I realise similarities, but certainly not much resistance enhancement.

    Happily I am not a health compromised male smoker over 80. Then I might be worried.
    KSS
    4th Mar 2020
    5:03pm
    Please explain where I was being unkind nev.

    The fact is, people DO need to calm down and have some perspective. Fighting over toilet rolls in supermarkets is absolutely ridiculous whether you are a microbiologist or not!

    And people also need to calm down over the stockmarket. It is panic that causes the drop. Don't sell out and it will bounce back. The fact is the market is no worse than it was last August and that is still far higher than in the GFC. As I said, a little perspective is required.
    Farside
    4th Mar 2020
    7:25pm
    KSS, hold and wait for the bounce back is all well and good if you do not have to spend capital and have the time to wait out the cycle. I suggest it is not as cut and dried as it may at first seem and would encourage people to use the opportunity to reevaluate.

    I thought like you but lost a bucket in the GFC for my troubles holding onto what I thought were strategically safe stocks. As the prices fell (following brokers BUY recommendations) I held on only to find out the board had not been honest with reporting and they did not come back. My woes were compounded in that I had to realise losses as contracts dried up and I had to spend some capital.
    hyperbole
    7th Mar 2020
    12:29pm
    The voice of sanity KSS....panic, causes more panic...this will all pass.
    hyperbole
    7th Mar 2020
    7:29pm
    As someone who bought Combank shares at $9 I am hanging on
    Veritas
    4th Mar 2020
    2:01pm
    The only person who saw this coming was Dean Koontz in his book The Eyes of Darkness, published in 1981. Koontz called the virus Wuhan-400. He even predicted it would strike in 2020! Chinese labs developed it as a biological weapon.

    I don't want to start a conspiracy or scare folks, but if China stops the infection rate, while the rest of the planet struggles, and global economies go down, who comes out on top?

    I'm sure it's not the case, but I've stocked up on toilet tissue just in case we're up the creek and the fan is spinning.
    Tanker
    4th Mar 2020
    5:30pm
    If you are up the creek and the fan is spinning you will need more than toilet paper.
    Seriously tho' there is too much panic at the moment. If this does become a pandemic then you have as much chance of avoiding it as you would staying dry in a rainstorm.
    Common sense preparation without panic buying and worrying about your share price is the way to go.
    Be concerned by all means but you should never worry about something over which you have no control.
    Tanker
    4th Mar 2020
    5:30pm
    If you are up the creek and the fan is spinning you will need more than toilet paper.
    Seriously tho' there is too much panic at the moment. If this does become a pandemic then you have as much chance of avoiding it as you would staying dry in a rainstorm.
    Common sense preparation without panic buying and worrying about your share price is the way to go.
    Be concerned by all means but you should never worry about something over which you have no control.
    Karen
    4th Mar 2020
    6:25pm
    Syphon warm salty water through nasal passages - take a hefty mouthful (not in that order) and swish throat thoroughly at the first sign of fever or cold symptoms..... take two aspirin and call me in the morning if it persists.. repeat warm salty water until symptoms ease.... anti-biotics will only solve secondary infections from fractured tissue... so use the warm salty which promotes cell repair anyway and keep up fluids...

    Removing a significant body of the infectious material (if you have it) will enable your body to act better against the rump remaining...

    Now to follow my own advice - **coughs** - that's the last trip I'll take to China...
    hyperbole
    7th Mar 2020
    12:30pm
    toilet paper of all things to panic about....you do not get the runs from influenza ...which is what coronavirus is just another strain. there will be plenty of toot paper and even if you are confined to your home you can ring up coles or woolworths etc and get home delivery of what you want

    4th Mar 2020
    2:40pm
    Great buying opportunities are starting to emerge. Best time to be an investor when markets are down.
    Mariner
    4th Mar 2020
    4:00pm
    Old saying mate! But you have to have a few future miles on your clock for that to come to fruition - in the box it will come to nothing.
    Farside
    4th Mar 2020
    7:35pm
    which opportunities are you liking?
    Anonymous
    6th Mar 2020
    11:09am
    I've added a few stocks to my portfolio and will add more as market falls further. Just love IVC but have taken the opportunity to sell some of them and waiting to buy them back at lower prices.
    hyperbole
    7th Mar 2020
    7:30pm
    that is what Warren Buffett says buy on a falling market!
    Eddy
    4th Mar 2020
    2:43pm
    I am not unduly worried about my wife's superannuation (my superannuation is a defined benefit not affected by market volatility). She has not drawn down her super, keeping it in the accumulation phase as a nest-egg if we ever need it. While her super has lost about 1.5% since January 1, in the period 1 January 2019 to today it has increased by over 14%. Since her retirement in October 2016 it has increased by over 48%. Not a bad investment return for no effort. We knew the 'good times' could not go on indefinitely but we are confidient things are not as bad as some pundits are making out.
    hyperbole
    7th Mar 2020
    7:30pm
    same as you Eddy...still in accumulation mode..no need to draw down yet
    morrowj1122
    4th Mar 2020
    2:47pm
    Oh, the joy of being an Aussie pensioner in this day and age.
    Cheezil61
    4th Mar 2020
    4:37pm
    Not too disappointed that I put most of my super balance into Cap Stable at beginning of this year. I'm 60 next year & plan on switching jobs or quitting work so could be relying on having some of my super left to spend ( rather than lose it all to crap like this; too hard to earn to lose)!
    Cheezil61
    4th Mar 2020
    4:45pm
    Nervous about leaving any money in super anyways..if past govts could said a slush fund that was for pensions years ago, what's stopping govt's raiding our super at some point in time?
    cupoftea
    4th Mar 2020
    6:48pm
    Ch61 it was the 9 greens vote that saved the industry super from been given to the Bankers to rip it up for their benefit a couple of years back before the RC
    cupoftea
    4th Mar 2020
    6:01pm
    I am in conservative and I am losing $1000 dollars a day started on the 23rd feb
    Farside
    4th Mar 2020
    7:37pm
    but how much did you make before 23rd feb ... market is back where it was two months ago and well up on where it was a year ago
    hyperbole
    7th Mar 2020
    7:31pm
    exactly Farside...only paper loss...only loss when you sell
    cupoftea
    4th Mar 2020
    6:01pm
    I am in conservative and I am losing $1000 dollars a day started on the 23rd feb
    Karen
    4th Mar 2020
    6:15pm
    I'm thinking that the whole thing about corona is a beat-up, but it's been on the cards that some economic collapse had to happen. Amazing to watch people panic buying in the supermarkets when what they buy, given that the bug doesn't like temperatures over 25 deg, will be gone by the time our average temperatures get to that point.

    Boost for the supermarkets though...
    JOHN T
    4th Mar 2020
    8:01pm
    What is the government trying to prove 5 interest rate cuts in as many years how on earth can this prevent self-funded members keep themselves off claiming the pension as eventually
    more and more will claim and the Government then will complain about welfare costs
    Veritas
    4th Mar 2020
    8:23pm
    Josh Fries-n-a-burger has a cunning and masterful plan to curb the ageing welfare expenditure, which is expected to grow in nominal terms to 72 billion by 2025: let the virus run its course.

    Before everyone complains, the above is tongue-in-cheek and not a serious comment!
    Tricky
    4th Mar 2020
    9:07pm
    I agree John T, that is one of the reasons the LNP gov will not reduce DEEMING rates on fixed term deposits. They are absolute hypocrites, It's a tax on pensioners, part pensioners and self funded retirees.
    Mariner
    4th Mar 2020
    9:44pm
    Not full pensioners at all, Tricky. How cold it affect them really? OK, having more than $300'000 in bank accounts could be dicey? Then again, if so, do not be so tight.
    JoJozep
    5th Mar 2020
    6:04pm
    Don't know whether to laugh or cry! We lost $22K plus last week. Boo Hoo x 6 times!
    Just have to ask the good lord to keep us alive until the Stock Market recovers. Chin up, we could be worse, at least the CoronaVirus has put a stop to WW3 starting. This is what happens when the poor revolt, so watch out SCOMO and LNP.

    This is true! I laugh when I see people hoarding toilet paper. If there is a shortage, you can use plain hand rolls or even wipes if necessary . Child's nappies can also be used (before a nappy change obviously). You can also buy a broadsheet newspaper, though even these are hard to get now that AAP has been dissolved by Murdoch press.

    Think about it, one roll will last 1 person a month (unless you have diarrhea). There will be a shit load of hoarded toilet paper on the weekly cycle and may even appear on the twice annual sidewalk collection, once the non thinkers lose their panic buying..

    Or as I witnessed in PNG back in the late 60's, they used coconut husks, then a dip in the salt water sea nearby. After a while their A glands stiffen like a rock, and you don't need paper. Watch out for falling coconuts however, they are heavy and weigh around 2-3 kilos (when green) and at the height of a coconut palm, can easily dent a car roof, let alone a human scull.

    Nothing comes free on this earth! Hmm! wonder how a paper bark tree would go (if you can find one). One good thing, the amount of paper waste going to Werribee will reduce in the next six months, but then solids will need extra flushing or our sewer system will clog. By the way, I wouldn't recommend scented paper, best is to shower daily especially after doing the business. I observed many males in public toilets walk straight out without washing their hands, can't imagine what they touch next. One went straight to a food bar to have lunch!

    Food for thought?
    JoJozep
    5th Mar 2020
    6:16pm
    By the way, I fail to see what connection there is between falling stock market prices and rise in toilet paper hoarding. Perhaps the market manipulators have finally got the shits!
    Cheers!
    Mez
    22nd Mar 2020
    4:08pm
    HA HA!
    I was also wondering that!
    hyperbole
    8th Mar 2020
    9:36am
    pensioner friend annoyed she may have to dip into her hidden mattress bank.
    Chooky
    9th Mar 2020
    12:00am
    I had 903,000 21 February in super after scrimping and saving and downsizing. Friday it was $856,000. I have just retired.
    Veritas
    9th Mar 2020
    6:39pm
    I'd say hang in there, Chooky. The figures are ugly at the moment but I remember 2008 like it was yesterday (Heaven forbid, I must be getting old). I lost big-time back then but recouped in a couple of years. Let's hope history repeats.

    P.S. once bitten, twice shy. When I first read about the virus I converted to cash. I was smug for a time but now feel for those watching their savings nosedive.
    MacI
    9th Mar 2020
    7:00pm
    Agree. Hang in there. You haven't lost anything until you convert it to cash. You're just retired so plenty of time to recover. I retired due to redundancy just as the GFC hit but it all worked out fine over the long term.
    MacI
    9th Mar 2020
    6:23pm
    If short term drops in the stock market, albeit significant drops such as this, causes you to convert into cash while the market is in free fall then you're invested in a portfolio that does not match your risk profile. Until a portfolio is converted into cash any losses are only notional. All that is accomplish by converting to cash is to consolidate a loss.

    Most Super Funds offer an investment portfolio that matches your risk profile so if your reaction to the current market is to cash in then you are probably best advised to switch to a more conservative investment portfolio when the dust settles - one that let's you sleep at night.

    During the GFC my fund returned -12.4% in the financial year in the midst of the GFC for a portfolio that was invested 50/50 in growth/defensive assets but it was bound by the year before the GFC returning 7.4% and 11% the year after the GFC, i.e. an average return over 3 years of 2%. Not great, but not a disaster. Better than the current cash rate. During the 15 years our Super Fund has been in 'pension mode' the 50/50 portfolio that we are invested in has returned and average of 7.7% so I am quite comfortable and I think realistically optimistic that this current event will also pass. Also, don't forget that there are opportunities for well managed funds to buy quality stock at cheaper prices.
    JoJozep
    9th Mar 2020
    11:22pm
    Yes, we all lose even though we say it's only paper money. Here's how:-
    Let's say you had $500,000 before the crash in a super fund.

    Then let's say you lose 20% in value. Your investment is now worth $400,000. Next couple of years, it goes up 20% but your investment only climbs to $480,000, not the original $500,000. So where has the $20,000 gone? In other words to recover your original investment, the market has to increase by 25%. While this is happening, your earnings are based on roughly the average, that is $450,000 for two years! That will be much less than you would have earned on the original $500,000 over the two years if interest rates remained static. In fact at this rate you lose $12,500 in one year!, and that's real money. I doubt if we will ever recover. So PANIC please to make everyone else feel good.

    So would the people thinking they won't lose, explain the loses? come on, you only need school maths to figure this out. Maybe in 5-6 years time at high yields, you'll get back to original figures with some profit gain, but will a lot of us live that long? or, will the yields increase by this massive amount for those years ahead, I doubt it. I bet my last dollar, the investing funds will want to recoup their losses first, then trickle down what's left to the support base yep, that's you and I.

    My advice is don't sell wherever possible, all that will happen is your monthly income drops by 20% till it picks up again.

    I heard that sleaze Harvey Norman say today, people may now start to buy goods from other countries instead of cheap goods from China. What a bullshit artist. What, 90% or more of the goods he normally sells comes from China, so what the hell is he on about. He's pissing into the LNP's pocket by saying don't do anything, people will panic. The LNP must prepare a stimulus package and by yesterday, stuff the surplus we had to have.

    Who knows, poor nations may do better than us. At least we hope we can feed and shelter our population. When is the GG (not a horse) going to sack this incompetent government and get us of the swill in the streets.
    Veritas
    10th Mar 2020
    10:53am
    Found this from Ambrose Evan-Pritchard to warn how this pandemic can turn to bite the boastful.

    'Barely in office, Donald Trump slashed the global epidemic funds of the Centres for Disease Control by 80 per cent. His first reflex when cases escalated was to spin the message. All must be well so long as Wall Street is rising. The markets were wrong. On matters of science, it is better to heed scientists. The US tested almost nobody until early March. By then it was too late.

    America is about to face a grim reckoning. The US has the best healthcare in the rich world, and the worst. Pandemics exploit the worst.'
    Tonto
    17th Mar 2020
    1:29pm
    Can someone give me any tips at all about my fast shrinking retirement account which has now dropped about 15% in a couple of weeks fund.It was supposed to last me about another 7 years, till I was about 85, drawing down about 8k pa,- optimally 9 or even 10 years if "normal' market conditions applied. And if COVID-19 didnt get me. But
    I am wondering whether I would be smarter to just put it all into a bank account where at least it would not FALL any more- or I hope so!-as opposed to watching it disappear entirely in the next few months or weeks!
    Any ideas ?
    GEORGE
    MacI
    17th Mar 2020
    6:17pm
    Hi Tonto, It depends very much on your appetite for risk. History tells us that the market will recover however nobody knows when that will be and for sure it's going to be a rough ride. Only you can decide.

    Some Super Funds allow you to split your investments so that a portion is held in cash and to draw down only from the cash portion. Let's say you converted $16K or more of the balance into cash and draw down on that for 2 years or more while the market recovers. Fees will need to be considered. My fund returns about the same as my bank returns for a cash deposit after fees.
    JoJozep
    17th Mar 2020
    3:41pm
    The market is like a whimpering pup. It reacts (especially as shares are posted, sold and bought by a computer) in a matter of minutes if not seconds, so even the stock market holders have little say in what happens. It (the pup) then continues on as if nothing had happened.

    Look, we might lose 50% of our lifetime savings, but I still consider once this pandemic is over, there will be the greatest rush to invest in goods production, including toilet paper. It's virtually over in China. In a matter of two-three weeks, The European epi-centre will be over it and start to halt new infections. In 12 months or so, we'll have a vaccine (which we already have) that's been tested. The stock market will reach new heights.

    Once goods are again produced in China, pressure will increase to allow trade ships and planes to start again, tourists will want to go and see their relatives, especially if they spent two weeks with the virus, and people will start to move again. All other industries will start up, and there will be massive demand for workers, especially those lost to the industry. Then we need to carefully watch inflation and devaluation of our dollar. No, it's not too good to devalue our dollar, since we rely on buying goods from overseas, thanks to the LNP pleasing the bush industries to make our exports more competitive. Other countries have held their nerve. I didn't see one imported Scotch brand reduced in the past 6 years, in fact they increased their prices. If it costs $59/Kilo to buy the expensive meat in Australia, who's buying it and for how much. Same with lobster. Forgotten what it tastes like as I haven't had any in 30 years. For this they charge $90-$100/kilo. So are the rich buying it from overseas? Who's benefiting big time. Same with abalone, natural and LPG gas. I bet overseas buyers get concessions, while we pay through the nose. Thanks to LNP. Yes it's all their bloody fault, no ifs or buts!

    Under World War conditions, these austerity measures last 5-6 years, at present we are looking at 5-6 months. So hang in there, Labour will reactivate the economy in a decent way. It's hard not to mention politics in this debate, but the LNP have a lot to answer for, and the pain we are now suffering could in a large part have been avoided if they only acted sooner.
    Veritas
    18th Mar 2020
    10:09am
    A brave prediction, JoJoezep. I think a vaccine or drug to kill the virus will arrive soon, but the economic repercussions won't be killed so quickly. Richard Guest from CNN thinks it will be 5 years before industry and the markets return to the levels of November 2019. 2025 before my Super claws-back the losses...hmmm?
    JoJozep
    22nd Mar 2020
    4:16pm
    Yes I spent two weeks self diagnosing what was going on. All it did was make me feel sick. In the end I said to myself, "your not starving yet and I could possibly survive another year" so what's the point worrying about it? Shit happens, and like all major disruptions, some good will come, even if it takes 5 years. If it takes longer, someone else can worry about it, I'll be fertilizing the daisies.
    simo60
    8th Jun 2020
    9:52am
    What a bunch of worries
    hecarole5
    26th Jun 2020
    9:53am
    As a business inclined individual i hated just staying home, saving all my super funds and not being able to make use of it to make more money so i went on looking for an investment, i tried binaryoptions and forex, lost some money to that and took sometime off the online investment thing, focused on real estate investments and after a while i was told of nc-worldwide()() com. I invested a little in it and got my returns and made withdrawal, then i was sure it was all real i kept on increasing my investment. I made a heavy profit when bitcoin fell because i was advised to invest more at that time and lock it down, i sold most of it last week at the rate of 9,200$ and i bought at the rate of about 7100. When you have a good platform like nc-worldwide(.)com. You can actually make profits without stress or feeling like you’re gambling with your pension or superannuation.
    Veritas
    26th Jun 2020
    10:02am
    I have profited from timing the market downturn, but it is not for everyone. Most over the age of 50 have a low, risk aversion. The other aspect of investing in shares is knowledge. Taking a punt is a sure way to lose savings. As every advisor will tell you, shares are a long term investment. Bitcoin was a good buy a few years back. Would not touch now.
    christyyre76
    30th Jun 2020
    12:55am
    Binary option, some crypto/bitcoin investments=Time wasters, unreliable and definitely a scheme perfected by swindlers. Birman law, chargeback, wealths recovery or most of these recovery companies can't be of help. You need to either venture into the darknet and get a trusted hacker or reach out to petru at hackwithme. tech. You'll be surprised how things are done from that side of the internet. I got 2.9btc back in no time, gave him his share and it was an amazing feeling. He can do other things related to hacks, so consult if you need such services or go get one in the darknet yourself like i advised.


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