There's enough content in that to count for two thoughts.Here's a bearish thought to start the week. I had two, but I can only remember one....
Cost of capital for businesses is going to go up. Listed firms will need to issue shares at lower prices. Unlisted firms will issue bonds at wider spreads.
Just wondering if you have any thoughts on the market action since this post?
My thoughts are mixed - Oil's up, speculative things such as Bitcoin still going up but the ASX doesn't seem at all convincing. That's not based on analysis comparable to yours though, it's just an observation.
Terry, if you are have set up a SMSF, I assume you would have a plan on what you intend to do. Key shares at a buy price and a sell price, or do you plan to use ETFs. Also do you a percentage allocation to the different asset categories?? Have you discussed any plans with an expert??Hi
How has the actual next couple of days compared to your chart?
I withdrew my money from our Managed Super and set up a SMSF. I'm wondering whether to enter the market, or wait a bit longer.
There is a bit of a time lag for the retired investor, I know in my case a lot of the dividends for this financial year are already in, Nab and WBC pay the final dividend next financial year.I remembered my other bearish thought:
This is continuing the train of thinking here: https://www.aussiestockforums.com/threads/xao-bull.30571/page-9#post-1039074, but exacerbated by all this COVID biz.
Savers => interest rates down already
Investors => dividends cut or will be cut soon
So it isn't just the young cafe workers or whoever that are getting their incomes reduced.
If you rely on financial assets for income in retirement, probably you're going to start needing to sell some chunks to get income?
@Bill M I know you are an investor for dividend income, if dividends get drastically cut this year, what kind of actions will you take?
I would assume most people in that situation would have a bit of cash kept for that purpose: 1 year or 2 so doubt SMSF will sell because they are squeezed..but they might sell as tactical change of assetsThere is a bit of a time lag for the retired investor, I know in my case a lot of the dividends for this financial year are already in, Nab and WBC pay the final dividend next financial year.
So far the dividends haven't been hit a lot and in August/Sept the franking credit will come from the ATO, therefore it will be next financial year I cop the hit.
The other thing of course is the minimum withdrawl, has been halved, so one doesn't have to pull as much out from super.
I would think Bill M, same as I has a cash reserve, for just such an occasion as has presented ATM.
But I do look forward to his comments, as they are always constructive.
@Bill M I know you are an investor for dividend income, if dividends get drastically cut this year, what kind of actions will you take?
I hold a smallish slush fund acct and a large TD, the TD hasn't been earning much over the last 6-7 years, but the interest it has earned has compounded and will pay my pension for next year.I would assume most people in that situation would have a bit of cash kept for that purpose: 1 year or 2 so doubt SMSF will sell because they are squeezed..but they might sell as tactical change of assets
Why would you take risk with no gain vs even an awful TD?
Good video, thanks for that. Gives both sides of the argument and is genuinely honest about the possibility that we may not have seen the bottom yet...Not often you see this guy pessimistic.
I have never heard of the person in the video or seen him before. However his message seems to be so powerful and I think pretty close to the mark. I think everyone should watch it and just take a deep breath and think about whats going on in the world right now. Protect your nest egg, thanks for posting it, cheers.Not often you see this guy pessimistic.
Anything is possible in these markets, look at Japans N225 index which has been in a bear since 1990. Solution: Trade the market in front you....That guys mentions we may pull out of this in 3-5 years, or it may be as long as 25 years.
That correlates to two possible wave counts I posted here for the S&P500 S&P 500 Seasonal Low
and depends on if you interpret Grand Super Cycle Wave 5 - that likely commenced at the GFC low - as over or only just beginning. For those who do not follow Elliott waves, these are only possibilities and not a certainty.
Dividend cuts and branch closures of some of the banks are in anticipation of some damage I guess. The real numbers will be interesting but may not show the full extent of what is happening since all this unravelled in a month. So let's say if a small business were to temporarily lose customers or to put a "Closed" sign on the front door, the business owner would most likely be still making the repayments on any loans from previous cash flows and existing reserves I would think.WBC and NAB report soon, it will be interesting reading IMO and will give an indication of the underlying money flow issues.
Just my thoughts.
So what determines how much the market will fall at it's worst may not be demonstrated in the first 6 months (as they may follow similar patterns despite different end results). Instead it's what happens after this initial phase.
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