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Discussion in 'Introductions' started by harks11, 10th Aug, 2010.

  1. harks11

    harks11 New Member

    Joined:
    3rd Jul, 2010
    Posts:
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    Location:
    Brisbane
    After being badgered by the computer to post something this is it. I am doing the smsf trick and am in awe of the amount of knowledge that is on this and other forums.

    So far I have been reading an trying to learn all I can. Still not much yet I can contribute.

    cheers
     
  2. GregR

    GregR Reid Consultants

    Joined:
    13th Jul, 2009
    Posts:
    273
    Location:
    Berwick Vic
    Welcome, often it is reading and participating where you can add your experiences and knowledge.
    Why are doing the SMSF bit and what are you trying to achieve?
    Greg
     
  3. harks11

    harks11 New Member

    Joined:
    3rd Jul, 2010
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    Location:
    Brisbane
    Thanks for the welcome Greg, and yes an interesting question. Why did I do it and what do I want out of it. Obviously want to make a squillion and live happy every after is the quick answer. But seriously. I was watching a considerable part of my lifes work earning other people money. Not that it in itself would make me do it but they were not sharing. So if I look at my super split across 5 retail funds the income was just about taken up in fees. Now you could argue what about the growth. Not much around at the moment but the fees kept coming.

    So here is my thinking. If I match the market I will be well rewarded over the long term as the share market is proven to be the best investment when comapred to property etc.

    Given that I had normal retail funds I probably was meeting the market minus 2%+. There was a added frustration of no control.

    So I am thinking of either direct investment or ETFs that meet the market and/or Divindend funds and reinvest. That will be 95% of the portfolio.

    As for being smarter than a pro who has spent twenty years at the game.....and beating the market, that may be folly. your thoughts
     
  4. Johny_come_lately

    Johny_come_lately Well-Known Member

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    1st Jul, 2009
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    Location:
    SE Queensland
    Hi harks11

    It's better to match the market than get less than it. It is also good to know year on year where you will be.





    Johny.
     
  5. GregR

    GregR Reid Consultants

    Joined:
    13th Jul, 2009
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    Location:
    Berwick Vic
    I am not an expert on the share market and while I have the qualifications to go down the FP path, the share market never made sense to me and how FP's make money never made sense either.

    The studies I did and research others have done clearly show over many years, tracking the market gives better returns than the great majority of traders and certainly lower costs. I look at the average returns from groups of super funds, almost year on year, up or down, industry funds outperform retail funds. The question has to be asked, why?

    As to your statement that the share market is a better performer than property, I have a different view taking into account risk/return. More so, my view on wealth creation is - it is a finance strategy, using other peoples money to invest in capital growth and income generating assets. Property is the asset allocation for this.

    I think superannuation is a tax effective vehicle to park wealth, not to try to create it. I would not suggest younger folk put much into super who have an intention to create wealth. Certainly use super for SGC to its best effect, but you effectively cannot borrow in it, refinance it, pull it out until retirement. There are better strategies.
    Good luck and keep learning and apply what you have learned and see the effects yourself.
    Greg
     
  6. Johny_come_lately

    Johny_come_lately Well-Known Member

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    Location:
    SE Queensland
    Since 2002 I have been interested in index funds. I have read books, searched the net and attended lectures on index funds and ETFs. My research has found, after about 15 years, Nobody has beaten the market year on year. Paying entry fees, exit fees, management fees, Buy/Sell fees, performance fees, Adviser fees and commissions are tough in an up market and worst in a falling market. If you are paying 3% all up, Thats 3% you have earn On top, just to get even. When an index fund costs 0.4% and an ETF half that, they seem like a worthwhile option.




    Johny.
     
  7. Nigel Ward

    Nigel Ward Team InvestEd

    Joined:
    10th Jun, 2005
    Posts:
    1,172
    Welcome on board Harks.

    I think the key benefit of SMSF is control. You're the master of your ship - the captain of your fate... :D Depending how good your navigation skills are that could be a good or a bad thing! :p :rolleyes:

    Also, subject to your age, the legislatively imposed long term view due to preservation age restrictions on accessing your money is helpful in engendering a long term view of investing.

    There are some heavy administrative and compliance burdens imposed on SMSF trustees so as you're no doubt discovering, it's not something to go into if you hate paperwork!

    On the downside SMSF is a regulatory nightmare - the legislation and regulations are quite complicated. Despite that, you as trustee of the SMSF are responsible for compliance.

    On the plus side SMSF is concessionally taxed.

    You can also now borrow through your SMSF trustee which you basically couldn't do before Sept 07.

    Taking a core/satellite approach to share investing through your super fund sounds like a prudent one. If the core is comprised of largely index tracking approach then the worst case scenario is you get the market returns minus a small tracking error across most of your portfolio. Over the long term that's probably okay!

    Cheers
    N
     
  8. harks11

    harks11 New Member

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    3rd Jul, 2010
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    Brisbane
    Thanks for the word Nigel, Like you say the impact in all this is being in control. It makes you think about the issues. I went a long to with the "default" option
     
  9. billyy2288

    billyy2288 New Member

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    billyy2288
  10. yuriart10

    yuriart10 New Member

    Joined:
    19th Oct, 2010
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    Location:
    USA
    New here ...name is Yuri and work at home 90% of the time. Hope to make it 100% as it is a lifestyle we should all be fortunate enough to maintain.
    I live in USA and look forward to the benefits of being involved.



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