Thanks for posting that contrarian view up Chagsy.

I think my thinking is something along the lines of the following:

• We were in a bull market at the start of the pandemic.
• Things got really stupid with the money printing. '
• We've come back a long way, but only from the recent highs. We are still well above the previous bull market peak.
• Earnings were artificially inflated with Covid money printing and we haven't seen these drop yet.
• A recession + earnings drop may mean a major bear market.
• Fundamentally, are we in a better position than we were at that peak? (Interest rates complicates everything)

Also complicating this is that the issue of credit/debt has still not been resolved. The only way I see this being resolved politically is through monetising the debt or through inflation running above interest rates for 5-10 years. I still haven't fully worked out what this means for stocks, but it may be bullish. The Australian market is also running a bit differently to the US market.

The charts below kind of show what I mean

Would it be worth doing a search for those asset managers that are just holding high levels of cash? Potentially one that is cash heavy because of dividends rather than selling out as a matter of timing. Just letting the inflows grow until they pounce on a better opportunity. That would be how I would want to play that strategy at least!

I don't think any of those are defensive in the usual sense?

Oaktree is an opportunistic high yield credit manager - should do better in the recovery.

Bridgewater maybe - hedge fund but more meant to be 'alll weather'

Platinum - will still get hit if markets fall. The are a long/short fund but sitll net long.

I thought koda capital was a financial adviser not a fund manager? could be wrong there.

If you mean non correlated then there might be a case for a short index ETF or even a long duraiton government bond ETF (if you think things get bad and CBs cut rates and inflation is low). Otherwise perhaps infrastructrue is more defensive than other asset classes. Otherwise private asset managers since the managers mark whatever price they want lol.

Honestly though I think the most sensible is to hold cash if you want defensive so can take advantage of any sell off - you can get close to 4% while you wait. Still negative after inflation but sitll.

Yeah you might be right. I think I probably just like everything I hear/read from Howard Marks and his investing philosophy. Non correlated is probably also useful.

I think Koda also has a fund. There were some podcasts on Inside the Rope - not the most entertaining, but informative.

Urgh, yeah, there is something about locking in a negative real return that sickens me, but it may be a reasonable option.

From chats with the platinum guys at Finfest I think they did have some shorts, but were still net long.

Could look at Allan Gray but they are more of a contrarian investor/manager

They started buying into Nufarm aggressively when Sumitomo Chemical sold out around $5 and the bookbuild failed.

I was thinking of doing the same thing but didn't follow through as I thought Nufarm could have been overpromising. Maybe I should have in the end.

I believe they also went aggressive into NCM at the 52 week lows years ago when they were burning cash getting Lihir up and running.

@Stuey727 will all due respect stuey, where have you been the last year!! a lot has already happened. keep your cash high, cut your risky positions (non profitable, ultra high valutaions, large cyclical exposures (economic senstitivity/earnings downgrades comes next imo). have soem idea where actual value resides in a higher bond rate environment, or waits for the Fed to change its mind.

The issue is that I might soon be receiving what for me is a large amount of money (I have no idea how much at this point).

I'm happy playing with the money I've earned and if I lose it, I lose it, but it feels a bit different receiving money.

Koda does have a fund, but I'm not sure whether it is investable for retail.

https://www.livewiremarkets.com/wires/frank-macindoe-koda-capital-experience-matters

@Stuey727 my offer would be the following; Don't overthink or over complicate it.

Maintain your 'play' money as you define above.

With this other money. Put it into 2x etfs (one domestic, one global) and your super, all combined with advice from your accountant, and go back to thinking about your play money.

I offer this, because it sounds like your more risk adverse with this gift/inject money. So do what your super does, invest it in the asx200 index.

The bias in this offering is that fund managers, if they have value at all, are in agreesive high risk ideas. If you want defensive, you cannot beat an index tracker.

@Stuey727, I take a similar view to @Chagsy and @Solvetheriddle....sorry mate. Again noting these are only my views, the time for a defensive manager was 18 months ago. I don't think it makes sense investing $$$ with a defensive manager when the market has already been whacked.

(actually my view is there is no time for a defensive manager full stop before your 60s, but that's a rant for another time).

If you want to deploy it conservatively, what's wrong with DCA-ing the index over the next 1-2 years? History tells us it will be bloody difficult for most fund managers to beat the market -- and you will have to pay handsomely for the underperformance! This problem is twofold with a defensive manager, you are parking cash typically to preserve wealth and not grow it. Without sounding harsh, I can't see the logic in doing so.

If I was that worried about preserving capital, I wouldn't invest it. I would keep the cash in an offset account or similar and prioritise salary sacrificing a good portion of my salary into super (knowing I wouldn't need the salary/cash -- as I would have plenty in the offset etc). I think this is the next best option vs directly investing $$ in either shares, the index, or a combination of both.

So while this is absolutely not what you were after, in your position, it would be the last option I would consider. I actually think there is some real value around at the moment. I think it is a great time to be provided with an injection of funds.

Caveat -- this obviously isn't advice, just my thoughts on what I would be doing in the same situation.

@reddogaustin and @Rocket6 have provided some valuable points.

The only other comment I would make is that equities aren’t the only game in town. If you want low risk, there are a number of fixed income ETFs, both global and local. Should you wish to explore bonds in more depth, https://www.fiig.com.au/ would be sensible place to start your journey as an independent investor.

The Australian retail bond market is immature in comparison to most Western markets, which offers some advantages.

best of luck!

@reddogaustin sorry mate, didn't see your comment before I waffled on with similar thoughts of my own! Agree completely.

@reddogaustin, I would go one further and suggest for defensive money, put a reasonable chunk of it into Berkshire Hathaway.