My AustSuper ASX300 'low cost averaging' trading adventure

[Bill M]

Good news...of sorts.

Turns out i do get to participate in the GFF Rights issue, i got a letter today from AustSuper's share registry & corporate actions team dated 30 Sept, so only a couple of days after the announcement....good to see the share registry & corporate actions team are on the ball.

I just have to fill in a basic form stating how many shares i want and as long as im withing the ASX200 option rules i can participate...so looks like ill be taking my third and absolutely last average down into GFF, as i plan to participate fully in the rights issue.

Well done, nice tidy profit on the issue so far. Took a look at AustSuper's website. It definitely is a big improvement, although their term deposits aren't really much chop. Limited to NAB and ME Bank only. NAB's best rate was 5.5% for 90 days ME Bank was 5.9% for 6 Months. Why they don't let you take longer terms than 12 Months is a mystery. The ETF and Share purchases sound great but with limitations as well. I invest in high yielding hybrids and they won't make the top 300 ASX listed stocks. It's a bit restrictive but it's better than nothing and there are no hassles like running a SMSF. Good Luck with it all.

 

[lindsayf]

So_Cynical’s - AustSuper ASX300 ‘low cost averaging’ trading adventure.

I have recently opened an AustSuper account because i felt i didn't have enough money in super to justify opening a SMSF, even a cheapo DIY type SMSF provider like ESUPERFUND at $849 a year (with no insurance), was just to much to pay when i only have 51K in super...I felt that Aust Super with their ASX300 investment option was like having a half SMSF but with only about 30% of the DIY SMSF cost......

I'll be interested in your experience with the new investment options at AustralianSuper. I also joined a year or so back because of the extra investment flexibility over my other super provider ( HealthSuper). I also dont have an amount that warrants a SMSF so am looking fwd to seeing the new platform and making the most of what I have.

On a side note - I was surprised that I was not able to roll all of my HealthSuper balance to AustSuper because the hospital where I work will only make contributions to HealthSuper. And there I was thinking employees had choice these days. But I was able to roll out most of it and keep the HS account going.

 

[So_Cynical]

I'll be interested in your experience with the new investment options at AustralianSuper. I also joined a year or so back because of the extra investment flexibility over my other super provider ( HealthSuper).

Hey lindsay

So far so good with the new platform...i brought some IMF shares today (5000 @ $1.35) and the process was pretty much exactly as you would experience with an online broker.

The order screen is simple (as an order screen should be) my Limit trade was executed today at my price, and my settlement account debited...the only things missing were a confirmation email and an appropriate order progress type screen.

IMF with a market cap of only 167 million is a good example of the extra freedom to choose investments that the ASX300 offers...with my ABC & SGP positions now in profit (small) hopefully it wont be to long until i can report how my first AustSuper selling experience goes.

Shame GFF spoilt the party.
~

 

[Julia]

IMF with a market cap of only 167 million is a good example of the extra freedom to choose investments that the ASX300 offers...with my ABC & SGP positions now in profit (small) hopefully it wont be to long until i can report how my first AustSuper selling experience goes.

Shame GFF spoilt the party.
~

If those figures are as of today, won't it take only the expected retrace, when the world wakes up to the fact that the announcement yesterday is yet another very temporary band aid, to kill your tiny profit?

 

[So_Cynical]

If those figures are as of today, won't it take only the expected retrace, when the world wakes up to the fact that the announcement yesterday is yet another very temporary band aid, to kill your tiny profit?

The figures are as of 4 hours ago.

Of course my tiny profit and capital is at risk, im comfortable with that...the rally may continue and get me out of my ABC, SGP and or IMF trades with 10 or 15% profit, hell even a break even get out of GFF is possible. or we mite go back to where we were 1, 2, 3 and 4 months ago. :dunno:

What the market does at any One, Twenty, Fifty or Five hundred points in time is of little interest to me...i watch individual stocks that do interest me and seek to enter them at the most advantageous times, then hold until its advantageous for me to sell part or all of that particular holding....its a simple plan.

 

[So_Cynical]

I expect employer, personal and any Govt co-contributions will total somewhere between 5 and 6K annually (currently considering a small salary sacrifice that would boost this by 2.5K annually) ~ fees and charges (less insurance) including those triggered by my activity in the ASX300 investment option should total around $250 to $330 per year...i plan on retiring in 7 to 10 years and will need this fund to be worth at-least 180K by then for my plans to come to fruition...minimum 13% PA growth needed to retire in 10 years.

I ended up deciding on a salary sacrifice of 4K annually...now 8 months down the track and with AustSuper's new platform up and running its become clear that i need to increase my sacrifice (%) significantly to reduce my personal tax liability's and increase my super balance, also becoming clearer is the fact that 180K wont be enough to fund the required annuity ill need...so the new 10yr target is 250K of which at least 110K will be SS.

Last FY and this FY i have/will receive tax bills due to the success of my personal portfolio, all things being equal this trend should continue so i feel the smart thing to do would be to up my sacrifice...so from the new year ill be doubling my SS to just under 8K resulting in a significant lowering of my annual tax bill and allowing me to be more aggressive with my super trading.

 

[namrog]

Interesting thread So cyn, and thanks for sharing a live account.

If you believe those who are supposed to know, then there is a massive dose of inflation on the way, that's if Angels Merkel gives way and we get all this Euro bailout money flooding the market, then there can only be one result.

Have you considered a hedging strategy to defend your portfolio against the ravages of hyperinflation....?

 

[So_Cynical]

Interesting thread So cyn, and thanks for sharing a live account.

Have you considered a hedging strategy to defend your portfolio against the ravages of hyperinflation....?

The gold stocks are over priced at the moment...perhaps an ASX mining ETF? also hyper inflation will help the real estate stocks id imagine as asset prices will run up with inflation. :dunno:

I've been of the opinion for 4 years that the US and EU needs to inflate away the debt...but it just hasn't happened. :dunno:

 

[Julia]

SC, are you saying you believe you can fund your retirement with a base of $250,000?
Will you have any other income from anything?

 

[So_Cynical]

SC, are you saying you believe you can fund your retirement with a base of $250,000?
Will you have any other income from anything?

$250K will be rolled into a 20yr annuity that should give me maybe $1600 AUD per month that will be used as pocket money and basic living expenses etc...hopefully ill have 500 to 600K worth of stocks at that time paying me roughly 6% in dividend yield, so another 30 to 35K annually..then add to that trading profits of 10 to 30K annually.

Living in a low cost country...the above should be enough.

 

[Julia]

$250K will be rolled into a 20yr annuity that should give me maybe $1600 AUD per month that will be used as pocket money

That's assuming your annuity will pay you just under 8%. I'd love to know where you're going to access such an annuity?

Please let me know. I'll be right into it.

 

[So_Cynical]

That's assuming your annuity will pay you just under 8%. I'd love to know where you're going to access such an annuity?

Please let me know. I'll be right into it.

5% ... or is there something im not getting? i must admit that i haven't gone into the nitty gritty just yet and am dealing in ball park figures....as far as i know an annuity works on both principle and interest...in ratios pretty much the same as a principle and interest loan.

http://www.annuity.net.au/calculator
~

 

[Ves]

Assuming the top end of your income spectrum in 20 years time, you'll have 85k per annum (assuming that you obtain the annuity, gain 30k trading income per year etc).

Inflation adjusted this is just under 50k if we assume inflation of 3% over the twenty years. Seems possible to retire on this, but the question remains whether you can consistently achieve trading income and / or obtain the annuity.

I commend you on having goals and knowing what you want. You are certainly not being unrealistic. This is really important. Well done.

 

[nulla nulla]

$250K will be rolled into a 20yr annuity that should give me maybe $1600 AUD per month that will be used as pocket money and basic living expenses etc...hopefully ill have 500 to 600K worth of stocks at that time paying me roughly 6% in dividend yield, so another 30 to 35K annually..then add to that trading profits of 10 to 30K annually.

Living in a low cost country...the above should be enough.

$10k to $30k trading profit on a portfolio value of $500k to $600k sounds a bit conservative, (5% would represent $25k-$30k, 10% = $50k-$60k etc). Particularly given your demonstrated practise of combining dividend stripping with capital gains and your target of outperforming the market.

Then again there is nothing wrong with erring on the side of being conservative in your projections. Good luck.

 

[lindsayf]

Hey lindsay

So far so good with the new platform...i brought some IMF shares today (5000 @ $1.35) and the process was pretty much exactly as you would experience with an online broker.

The order screen is simple (as an order screen should be) my Limit trade was executed today at my price, and my settlement account debited...the only things missing were a confirmation email and an appropriate order progress type screen.

IMF with a market cap of only 167 million is a good example of the extra freedom to choose investments that the ASX300 offers...with my ABC & SGP positions now in profit (small) hopefully it wont be to long until i can report how my first AustSuper selling experience goes.

Shame GFF spoilt the party.
~

Good stuff SC.

I have just registered and having a look at the platform. I can see no provision for stop losses or for buy stop orders - entry appears to be by limit or market orders only. Is this your understanding?

thx

 

[Julia]

5% ... or is there something im not getting? i must admit that i haven't gone into the nitty gritty just yet and am dealing in ball park figures....as far as i know an annuity works on both principle and interest...in ratios pretty much the same as a principle and interest loan.

http://www.annuity.net.au/calculator
~

SC, I was thinking of just the % return on your principal, not the return of your capital in the calculation as happens in a term annuity.

I don't know much about them either, but wonder why you'd sink so much into such a product when you could alternatively just continue investing using that $250K as part of your capital base, almost certainly derive better than 5% as a result, and still have your capital at the end of 20 years?

If you were at age pension age, and had your assets in an allocated pension you wouldn't be paying tax.

I know at one stage complying annuities meant the value of same were not taken into account when being assessed for a government pension but I thought that had changed. Not sure.

I'd be interested to know what attracts you to the term annuity? Maybe the 'set and forget' aspect?

 

[village idiot]

I'm lost, where do the 500k-600k of stocks on top of the 250k come from ?

 

[Wysiwyg]

hopefully ill have 500 to 600K worth of stocks at that time paying me roughly 6% in dividend yield, so another 30 to 35K annually..then add to that trading profits of 10 to 30K annually.

I am surprised you would risk the share market for a hopeful 6% dividend as opposed to guaranteed bank interest of 6% for term deposits.

 

[nulla nulla]

I'm lost, where do the 500k-600k of stocks on top of the 250k come from ?

Hard work, saving and investing in the share market outside of his super fund.

 

[Julia]

$250K will be rolled into a 20yr annuity that should give me maybe $1600 AUD per month that will be used as pocket money and basic living expenses etc...hopefully ill have 500 to 600K worth of stocks at that time paying me roughly 6% in dividend yield, so another 30 to 35K annually..then add to that trading profits of 10 to 30K annually.

Living in a low cost country...the above should be enough.

I'm lost, where do the 500k-600k of stocks on top of the 250k come from ?

I'm also a bit confused here.

SC, if you have approaching $500K-$600K of stocks outside of Super, isn't any gain here going to attract tax at your marginal rate?

Given that your main focus seems to be on providing for your retirement (and good on you for this), I'm a bit puzzled about why you wouldn't have the lot in Super, with tax at just 15% in the accumulation phase.

If you have $250,000 plus around $600,000, it would be extremely tax effective to put it all into a SMSF, the running of which would also be cost effective at around $850K.

Even if the $500K - $600K and/or the $250K is aspirational at this stage, I'm finding it hard to understand why you wouldn't have any assets inside Super.