Monday 21 December 2020

Playing timing roulette with our SMSF - hoping there isn't a "Santa Claus rally" this year

After selling our Vanguard Growth and Conservative Fund investments, it took four business days for the cash to arrive in our ANZ bank account. Fortunately the funds were cleared, so I could start the process of investing the cash back into our long term asset allocation of Vanguard High Growth Fund immediately. Unfortunately I can only BPay $100,000 per day, so it will take about two weeks to shift from 100% cash back to 100% Vanguard High Growth Fund (roughly - we already have about 1.5% of the SMSF total funds sitting in the High Growth Fund from our regular monthly investment plan, and will retain about 2% in cash to cover DWs pension payments and any tax bill due during 2021). I had thought it might take until 12 Jan to get the entire $1.59 million put back into the High Growth Fund, but fortunately the daily limit also applied to weekends, so I should be able to finish off all the required BPays by 1 Jan. Basically we will end up with a two week period of 'dollar cost averaging'.

This means that we will have quite a lot of our SMSF tied up in cash during a two week period, so it will be a 'lucky dip' whether we end up better or worse off than would have been the case if we had been able to switch investment options on the same day (as was possible under the old Vanguard account administration system). So far it looks like the Au and US share markets *might* have a bit of weakness during the xmas/new year period, so we *might* end up actually benefitting from the unavoidable delays involved in switching the asset allocation around. Fingers crossed that the markets drop for the next week or so, and then recover by the time the BPays have all been processed - getting an extra 1% or 2% return on our $1.6m SMSF investments would be a nice xmas present ;)

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