Crash questions (#192)

Many of us are witnessing a stock market crash for the first time. Like most of you, I'm experiencing a heady mix of excitement and terror. I'm so glad watching my portfolio no longer feels like watching paint dry. Instead, it feels like being dropped off a very high building. It's not great, but at least it's not boring.

This week we address nothing but crash questions. Drawing on some of the concerns of The Fat Wallet Community Group, we provide some guidance to get you through this process with your net worth protected. 

If you've been wondering what you should be doing right now, you've come to the right place.

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Bronwyn

I know that TFSA are supposed to be long term investments but I cant wonder if it's not right at the time.

I started one with FNB 2 months ago, last year one was with Allan Grey and it did badly so wanted to test a different one plus it helped with the ebucks.

Anyway I lost close to R500 in 2 months.

My children have cash TFSA and it's growing steadily.

What do I do?

I cannot afford to lose R500 in 2 months? Can one pause it?

I know the markets are volatile but I assume they will be getting worse still.

Danielle:

What are great and safe buys while markets are cheap? I've been watching  the prices hoping to buy low. Any suggestions?

Jacques:

Any views on buying government bonds?

Enesh:

FNB has just taken R3000 out of my share investor account. No record of it in transactions. They state this is a precaution given the volatility of the market. Is this legal? There absolutely not record of the transaction besides the email sent to me. I don't this is kosher. Any advice?

Sizwe:

Hi everyone, seeing some opportunities for buying. Am seriously considering 75% of my emergency fund to buy more etfs. Note sure of the risk though. What are your thoughts?

Minnaar:

I would love to "buy the dip" now, but the rand weakening has me worried. Those of you who are buying now, what ETFs are you going for?

K: 

I just want to enquire on the market share or stock marketing shares...

How do you buy shares of a certain public company

And where do i start?

Shaun:

I have my full TFSA allocation for the year ready to invest. Do I spend it all on ETFs now as they are on discount or does the math say rand cost average it out because the market may go lower?

Sarit: 

If we buy our favorite global ETF at a dip, R42 and 16.6 ZAR/USD.

Then the ETF goes up but at the same time the ZAR usually strengthens...

Is it the opposite movement nullifying each other at exactly the same rate?

It seems that the crash always comes with a weaker ZAR, if we are buying at a dip are we really making money when markets go up but ZAR strengthen?

Runyararo

In a crisis like we have there is no well diversified portfolio because systematic risk cannot be diversified away.

The Shamases

The money still sits with us because something has now occurred to us that we hadn't considered before.

We were going to just open a brokerage account and let time do its magic. But what if we make a poor selection when putting together a basket of ETFs? If we get a retirement annuity or a managed tax free fund, that concern is removed from us. However it would come with the expense of fees, which eat into growth.

How do we select between managed and unmanaged? And how do we select a good basket?