Profession: Private trader, part-time bookkeeper, investment education writer (currently consult to two not-for-profit organisations).
Family: My husband and I are members of the SMSF, we have two adult children who are not members.
Investments outside of superannuation: Rental properties, family trust holding Australian shares, portfolio of shares in personal names.
How long have you had your SMSF?
Why did you start it up?
We started the SMSF because we wanted to have more control over what our super money was invested in. I did some administration work for a financial advisor and learned how to set up an SMSF and what was involved in running one, which gave me the confidence to start out on my own.
How big is it?
Not big enough! Most of our wealth is in equity and in property outside super. I have a staged strategy of selling property and contributing the proceeds to super over a period of five years leading up to retirement, which will get the super fund balance to a level where we can provide for our retirement comfortably.
Is it more or less difficult to manage than you thought it would be?
It is easy to manage as long as you are aware of the responsibilities that you have as a trustee. With just a little bit of effort you can meet them easily and we don’t have anything too tricky – no borrowing or property within our SMSF – so it is fairly straightforward.
Are you glad you have it?
Yes, very glad that we have the SMSF. I know exactly where the money is invested and how it is performing at any time.
Are you pleased with its performance?
I wasn’t pleased with the performance over the first couple of years. Because it was our ‘retirement money’ I tended to treat it differently to our other investments and I made mistakes. Over the last two years though, performance has improved. The return is still not as high as the returns I get within the family trust but I am happy with the improvement. Over the last three years the average return has been 12.4%.
What is your asset allocation?
Our intention is to have 90% invested in growth assets and just 10% in cash, but at the moment the SMSF is only 70% invested – 54% in Australian Shares, 13% in Australian listed property trusts and 3% in an international managed fund (which has always performed hopelessly and which we never should have bought!). The remainder is allocated 6% in fixed interest and 24% cash – we are just waiting for some buying opportunities to buy companies at value prices.
My Australian shares are well diversified across a mix of sectors, including some great performing utility and infrastructure stocks and a couple of stocks in the consumer discretionary sector. I did have a couple of banks but I took profits on those just recently, and I’m still holding Wesfarmers (WES) preference shares and Woolworths as well as a couple of smaller growth focused mid-cap stocks. I have been too cautious, though, with my position size. My returns would have been much better if I had trusted myself more and taken the position size my plan allowed for.
What are your favourite investments/stocks and why?
As much as I don’t like the accounting associated with listed trusts, my favourite investment has to be APA – it has performed so well. My other favourite is GEM, G8 Education – I like its growth prospects and the chart looks great. Hopefully this market correction will allow me to buy some more.
Do you use an advisor or any kind of service provider?
No, I don’t use an advisor as I have had some ‘expensive’ experiences with financial advisors in the past. I work for a local accountant, in fact I do all the practices’ SMSF accounting work, so I do all my own accounts so the only service I use is an auditor.
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Also in the Switzer Super Report