SMSF Investment StrategiesSharing Simple Strategies for Self Managed Super Funds
Early results for FY 2009
As the 2009 financial year draws to a close, I have begun the process of collating and summarising our various investments in preparation for submissions to the accountants. Our self-managed super fund seems to have done well. Not counting the new contributions for the year, the fund has increased by about 15% before tax.
Unfortunately, we cannot say the same for some of our other investments. We had a sizable investment in two of the Great Southern Managed Investment Schemes, which we bought at the recommendation of our accountant. We sold one investment property located in the mortgage belt for roughly breakeven after 2 years and bought another property in a better suburb which is currently showing a 10% unrealised gain. The first property was recommended by a property investment company and the second was one we chose ourselves based on our own research. My accountant has pocketed his 8% commission and I am sure the property investment consultant has pocketed a handsome commission as well even though they sold us lemons.
I think the lessons we have learned are:
- don’t just blindly trust recommendations from financial professionals. Remember they make their money from commissions, not how good the product is
- don’t buy anything you cannot directly control. We have never liked managed investments e.g. unit trusts, etc. After the Timber Corp and Great Southern failures, we will be staying clear of managed investment schemes, no matter how attractive the tax benefits are.
- buy investments you understand and trust your own instincts. The property we just bought is in the suburb we currently live in so we knew what the market price was. The first property we bought was in a suburb we had never heard of and we probably overpaid for the property which was why we did not get much capital gains despite the property boom in 2007.
My husband and I are really happy we made the decision in 2007 to take control of our super funds. We decided to celebrate this yesterday by treating ourselves to a nice lunch at Vue de Monde.
Print This Post
