More pain for existing retail investors with the new Vanguard Australia online accounts - switching no longer exists

After taking almost a month to get online access after issues having my id confirmed, I had expected that the new online system would allow transactions to be completed online -- after all, my second Vanguard account (that is linked to a margin lending account) could not get online access under the new system supposedly because of this online transaction functionality (the margin lender needs to approve all transactions).

However, when I decided to rebalance my existing SMSF Vanguard investments from the Growth and Conservative options we had shifted into back in June into the High Growth option we have as our long term asset allocation, I found that for existing retail investors they have removed the ability to 'switch' between investment options via a form, and you instead have to sell the existing units and then purchase the new units. Unfortunately, for existing retail (old fund) investors, the online 'sell' button simply takes you to a link to download a pdf form that has to be filled in and lodged via the online messaging service.

The 'sell' form also doesn't let you 'switch' the sale proceeds into a different Vanguard fund -- so you instead have to have the proceeds paid out to you bank account. The first time I submitted the form our signatures (done using a mouse) were not accepted, so we had to print out the pdf form, sign it in pen, scan it, and then lodge the scanned form using the online messaging.

It then takes 3-5 business days for the funds to arrive in our bank account.

So, the form we scanned and submitted on Friday was 'acknowledged' on Friday, then transaction was processed on Monday (using the Monday closing unit sell price), and the funds didn't arrive in our SMSF bank account until Thursday.

In the meantime I'd checked on how I'd be able to invest the bank funds back into the desired Vanguard investment option (we currently have an automatic $2,000 monthly investment into the High Growth option via BPay). Turned out that the maximum daily amount via online banking was $10,000/day, and this increased to $100,000/day if I setup the banking App on my phone and voice authentication.

So, once the funds had cleared into our bank account I went up to our local physical bank branch to see about doing a one-off BPay of the entire $1.59m we wanted to invest in the High Growth option. Turns out that maximum $100,000/day BPay via the App is the maximum possible via BPay. To do a larger amount would required paying $180 to arrange for a bank transfer direct from our bank account to the Vanguard bank account. The problem with that is there isn't any information about investing via EFT to Vanguard's bank account - they only mention doing BPay investments for existing retail fund investors...

So, I'm left with having to make a daily $100,000 BPay payment from our SMSF bank account to our Vanguard High Growth Fund investment. And you can't set up recurring BPay's using the App/voice authentication, so I'll have to do this every work day from now until mid January (as the daily limit isn't available on weekends or public holidays).

I can only hope that 'dollar cost averaging' from cash into the Vanguard High Growth Fund over the next three weeks doesn't end up costing us much compared to the old 'switch' that was able to be done using the same day's selling and buying unit prices for the funds being switched from and to...

All in all, the new Vanguard online system for existing retail investors is a total pain in the butt.

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Well, dah!

You know nothing about the stock market, share trading, or finance in general.

But some guy has made a motser trading CFDs - and he assures his followers its totally safe - it's basically a 'sure thing'. Just copy his trades exactly and you can't go wrong!

This sort of trading makes buckets of money for the CFD platform, as they get paid for each trade that is executed, whether it makes or loses the investor money, so they pay actors a lot to "sell" the concept. And if Alec Baldwin says its a good thing, it must be! After all, he does a great impression of Trump.

So why not go ahead and invest? Why not even borrow some money off your parents, or "invest" the money you had saved up for your wedding? You'd make even more money! Right?

This article in the SMH explains the recent trend in 'copy trading' and the dodgy CFD providers who provide it.

All I can say is - remember these truisms:

"a fool and his money are soon parted"

"if it sounds too good to be true, it probably isn't"

"those who do not learn from history are doomed to repeat it"

"history doesn't repeat itself, but it often rhymes"

People have been losing money to 'get rich quick' schemes since money was invented. Many of the people who lost their life savings investing in the Mississippi scheme in 1719 probably did so because they copied others who appeared to be making a fortune, as would have many of the folk who lost money in the great Tulip mania of 1637.

If there is one positive from this sort of financial stupidity, it is that it explains why there will always be income and wealth disparity in the world - as long as people are free to make choices for themselves, and some people are complete idiots.

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End of November "12% solution" portfolio changes

My "12% solution" portfolio did well during November, due to the general market bullishness. For the end of November to signal was to say invested 60% in IWM (iShares Russell 200 ETF (All Sessions)) and 40% in JNK. This was the same as last month, so I don't need to do any trades this month, which helps reduce trading costs.  Unfortunately when I was looking at the costs of trading a "12% solution" using my IG markets account I had overlooked the fact that there would be a quarterly account keeping fee. This will have a negative impact on the overall performance compared to the "theoretical" 12% solution portfolio performance, so the $10,000 I've allocated to testing this asset allocation was probably insufficient. I won't be increasing the size of this portfolio though, as I also want to make an investment in a GenLife Insurance Bond to try out it's use for estate planning purposes. I'll write a post about that once I've made my investment as I'm still working out the details on how to implement exactly what I have in mind.

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Net Worth: NOV 2020

My monthly Net Worth calculation has been updated in NetWorthShare as at the end of November. The stock markets recovered strongly during November, due to the combination of the US election producing a clear result and the positive announcements regarding successful Covid-19 vaccine trials. This boosted both my geared share portfolio (up $21,346) and my superannuation (up $60,833). Our estimated house price was unchanged for the month, but the Sydney residential real estate market is showing signs of strength, and a few forecasters have started predicting rises over 2021 and 2022. Hopefully the valuation of my investment unit will be higher than the 'off the plan' price by the time construction is completed in 2023 and I have to get a mortgage to pay the balance of the purchase price. My net worth figure increased by $82,486 (3.12%) overall, to $2,725,974. It's always nice to have a positive month where my NW increases by more than my annual after tax salary ;)

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