JSE Investing

[Captain Fastbastard Mayhem]

"can switch their entire portfolio to cash".

 

Doesn't that trigger a CGT event?

No, because it's still within the fund, which has it's own unit price based on the collection of stocks it has inside it. You're buying the unit, and the difference in the price of the units is what you pay CGT on, if you withdraw from that fund.

 

If you'd personally switched from an equity fund (or any fund) to another fund, then there's a CGT event, as you've triggered a sale or switch between 2 different funds. 

 

Important note: This was a fund (unit trust) that has a flexible mandate, IE they can invest any % of their funds in any sector, and aren't tied by a fixed mandate, like, say, an Equity Fund or a Bond fund. With unit trusts, the manager can decide to disinvest from one co and invest in another, and it doesn't affect you because it's all happening within the unit trust itself, and won't affect the underlying unit price. 

Edited March 20, 2020 by Captain Fastbastard Mayhem

[River Rat]

At the start of the year I had some free cash (Euros) that I needed to invest into the market. My foreign investment strategy is relatively simple I look for ETFs that give me a dividend yield of 3% and above. Why ETFs as opposed to ordinary shares? I find that my news feed on companies in the US, Far East and Europe to be either delayed or sometimes very patchy, so it is difficult to monitor these and an ETF gives me an inherent spread in terms of risk. I have been sitting on the cash for somettime now earning no interest but I was waiting for a dip to previous support levels because the market was too rich for my blood and not meeting my hurdle rate of return.

 

So 2 weeks ago I put orders in on three different ETFs at levels that would give me the minimum dividend yield. By Monday last week I was fully invested as the first crash hit us, by Wednesday I was in the money as the market went up again but the volatility was massive so I shorted my shares. I couldn't find a direct short for the specific ETFs so I took shorts on the DOW, the DAX and Shanghai as proxies for my investment spread. As things stand I have an unrealized profit on the shorts but an unrealized loss on my ETFs, on aggregate I am in the black. This shows that the Beta of my ETFs are lower than the markets I have invested in which is another plus.

 

This strategy has worked in this instance and my only decision to make is when to take profit on my short trades. However, my local share portfolio has been reduced to mostly cash as my 10% stop losses kicked in so there's a question about when to reenter the market. Unfortunately my RAs are down roughly 20%. I have been trading on the stock market for over 20 years with well honed strategies that work for me but I am not so sure they're applicable in this market so for what it's worth I would be very cautious about doing anything rash right now. I am sitting on my hands.

[Prince]

In these markets the smart traders make millions by shorting shares. How does SASOL drop to R24 then two hours later is at R46?

Edited March 20, 2020 by Prince

[bertusras]

Yeah at the moment you just have to ride out the storm. I trust that the fund managers know more than I do, and a 7.5% drop in the current situation is actually not too bad.

 

When you're looking at companies like Atterbury (ATT) having lost 40% in the last month, Redefine (RDF) down 60%, things aren't too bad for me personally at this stage.

[Jase619]

We saw the USD gold price get smoked over the last while. Theres no such thing as a safe haven when selling is this panicked. Selling becomes across all sectors and into cash regardless. I think a lot of the decline was this.

 

The ZAR gold price has obviously held up better, it did though still take a small knock, but I think a lot more of our mines are reporting in USD so this doens't help as much anymore.

 

I think it also comes down to production. Mines cannot continue to operate as usual with the human movement restrictions coming in.

 

I'm largely invested in gold now and have also been scratching my head. Theres a baby bounce this morning which helps the nerves a little...

 

edit: i don't have gearing or in-depth info anymore so you may well be right.

 

Harmony definitely don't report in Dollar anymore, and AGA only report at group level in Dollar, local company level is Rand

[sawystertrance]

RR, are you a trader? Joe average can't short can he?

[River Rat]

RR, are you a trader? Joe average can't short can he?

Yes you can but I would go on a course first, this is as good as any www.traderscorner.co.za. Beware this is highly technical and very risky. I stopped day trading very quickly because it requires continuous monitoring so I now simply use it to arbitrage my long term investments in times of volatility.

[Paul Ruinaard]

At the start of the year I had some free cash (Euros) that I needed to invest into the market. My foreign investment strategy is relatively simple I look for ETFs that give me a dividend yield of 3% and above. Why ETFs as opposed to ordinary shares? I find that my news feed on companies in the US, Far East and Europe to be either delayed or sometimes very patchy, so it is difficult to monitor these and an ETF gives me an inherent spread in terms of risk. I have been sitting on the cash for somettime now earning no interest but I was waiting for a dip to previous support levels because the market was too rich for my blood and not meeting my hurdle rate of return.

 

So 2 weeks ago I put orders in on three different ETFs at levels that would give me the minimum dividend yield. By Monday last week I was fully invested as the first crash hit us, by Wednesday I was in the money as the market went up again but the volatility was massive so I shorted my shares. I couldn't find a direct short for the specific ETFs so I took shorts on the DOW, the DAX and Shanghai as proxies for my investment spread. As things stand I have an unrealized profit on the shorts but an unrealized loss on my ETFs, on aggregate I am in the black. This shows that the Beta of my ETFs are lower than the markets I have invested in which is another plus.

 

This strategy has worked in this instance and my only decision to make is when to take profit on my short trades. However, my local share portfolio has been reduced to mostly cash as my 10% stop losses kicked in so there's a question about when to reenter the market. Unfortunately my RAs are down roughly 20%. I have been trading on the stock market for over 20 years with well honed strategies that work for me but I am not so sure they're applicable in this market so for what it's worth I would be very cautious about doing anything rash right now. I am sitting on my hands.

Which ETF's were you in - i am looking to put money in to a similar sort of fund.

[sawystertrance]

Don't worry, I'm not thinking of it. I picked Rhodes foods as a stockpick because they have just signed a deal to supply Walmart.... Down 10% last 7 days.

 

It was just a query about shorting.

 

As an aside, I worked in London City (Middle office, not trading) for some years. Most exciting time was the Money Market desk with flat-out trade going. 1 acre of traders on one floor with, as you can imagine, a host of screens and speakers on permanent open lines round the world.  

[River Rat]

Which ETF's were you in - i am looking to put money in to a similar sort of fund.

Vanguard they have very low fees but you'll have to pick your own poison

 

https://investor.vanguard.com/etf/list#/etf/asset-class/month-end-returns

[Chris_]

Vanguard they have very low fees but you'll have to pick your own poison

 

https://investor.vanguard.com/etf/list#/etf/asset-class/month-end-returns

 

What platform(s) do you use?

[River Rat]

What platform(s) do you use?

You can open an account directly with Vanguard, my trading account is with IG and I use FNB for local and global stocks.

[Wimmas]

Also been watching the Sasol share price. Lowest I have seen it is at R24 some change.

 

I am a massive noob with share trading, but wondering what will happen with the Sasol share price. Can a massive company like it really fail, what are the chances the share price goes up to reasonable levels again?

 

With markets declining world wide at the moment with this virus, there will be a time where investing in shares will be very favourable, but when? So many investors selling off shares as there is too much uncertainty and prices plummeting daily.

[Captain Fastbastard Mayhem]

Also been watching the Sasol share price. Lowest I have seen it is at R24 some change.

 

I am a massive noob with share trading, but wondering what will happen with the Sasol share price. Can a massive company like it really fail, what are the chances the share price goes up to reasonable levels again?

 

With markets declining world wide at the moment with this virus, there will be a time where investing in shares will be very favourable, but when? So many investors selling off shares as there is too much uncertainty and prices plummeting daily.

Rather ironically, it's that trading that self-perpetuates the decline in price.

[bertusras]

My personal investments (all with Allan Gray through various funds) are down about 7.5% since the beginning of the month, which doesn't seem too bad, but it's a lot of actual value gone almost overnight.

 

My pension and preservation funds at Discovery however are down about 20% on the contributed amounts. Which is scary.

 

As a follow-up to this, my primary funds with Allan Gray have pretty much recovered and are even showing a positive 1-Year return at this stage:

 

 

My Tax Free investments are not quite there yet, but they are super conservative funds:

 

 

My pension and preservation funds at Discovery are still down 6% on the contributed amounts, so they still have some ways to go.

[Chris_]

(ignore the child-like simplicity of this pic pls...) I've been absolutely stunned by the severity of the daily moves in our market, and this really does apply to most stocks on the board. This is just one I decided to have a look at, Sibanye, over about 1 month. Net gain pretty close to +100%, but the in-between smaller % moves are just staggering.