Self Managed Super

[brianwh]

Thanks Pixel for taking the trouble to make these comments. At the moment I am dealing with the legacy of my time with an FP - most of the stocks I'm in were chosen by him. At this stage I will be getting rid of several stocks - TLS and QBE are high on the list - and will work towards a portfolio of stocks based on a plan or set of rules that I have chosen.

PS: Your negativity towards market commentary I find a little intriguing. I regularly flick over to the Business Channel and find a high degree of concensus on certain stocks (including some of my underperformers!!! - maybe that is telling me something) which is what I was meaning by positive market commentary

 

[pixel]

... Your negativity towards market commentary I find a little intriguing. I regularly flick over to the Business Channel and find a high degree of concensus on certain stocks...

Sure, I too flick over channels, read comments by (very few) market commentators I know. Sometimes, it can even kick my thoughts into a new direction - the Germans call it "Denkanstoss". But mostly that's background noise and scenery.

If I have formed my opinion of a stock and decided to buy or sell, it doesn't matter what Huntleys or Thompsons report as "Broker Consensus". The most reliable consensus is for how much is the Market prepared to buy and sell a particular share. I see that in a daily chart far better than by following someone's opinion that's published in the media. If the current trading consensus drops outside the range that I feel satisfied whth, I always have a Plan B.

Yes, I do have reservations towards the bulk of the Advisory Industry, even more so towards certain specific spruikers and talking heads that try to find an explanation for last night's market jitters. I treat that separate from stock-specific recommendations by analysts I know and trust.
Critical: yes. Cautious: definitely - and from some costly personal experience. But not totally negative

 

[Julia]

Brian, I'm starting to feel like a broken record on this discussion with you.

It sounds to me as though you're still feeling very unsure of yourself and without a firm direction or target. Hence the dilemma of listening to commentators and then being disappointed when their predictions don't make you money.

Yes, everyone says QBE is a very well managed company. No doubt it is.
But this does not necessarily translate into a rising share price


I'll not say it again after this, but I believe that until you make the effort to get a basic appreciation of how price action works, and base your choices of stocks on the chart along with your fundamental understanding, you'll continue to fall short of what you could reasonably expect to achieve.

I recall your saying quite a while ago, following my suggestion that you learn a bit about charts, that "maybe some time in the future when you really know what you're doing with the fundamentals". Sorry, but that's just not reasonable. One doesn't follow the other.

I don't know how many dollars you've actually lost, but surely spending another $30 to buy "How to Profit in Bull and Bear Markets" by Stan Weinstein just could be worth the investment. It's written in a very straightforward and uncomplicated way.

If you buy it (and no, I don't get any commission on sales of the book) and do not find your whole approach becomes clearer, then I will happily send you the cost of the book.

I don't mean to be rude, but you've been essentially wallowing around going nowhere for a pretty long time now. Surely it's reasonable to try something different?

Best wishes and apologies if I'm being too outspoken.

 

[bunyip]

Thanks Pixel for taking the trouble to make these comments. At the moment I am dealing with the legacy of my time with an FP - most of the stocks I'm in were chosen by him. At this stage I will be getting rid of several stocks - TLS and QBE are high on the list - and will work towards a portfolio of stocks based on a plan or set of rules that I have chosen.

PS: Your negativity towards market commentary I find a little intriguing. I regularly flick over to the Business Channel and find a high degree of concensus on certain stocks (including some of my underperformers!!! - maybe that is telling me something) which is what I was meaning by positive market commentary

Brian

Julia gave you some excellent advice in suggesting you buy 'Secrets For Profiting In Bull And Bear Markets' by Stan Weinstein.

Weinstein's approach can be summarised as 'buy the strongest stocks in the strongest sectors, dump them when they stop performing strongly'.

If you follow this approach you'll find it almost impossible not to outperform both the general market and your financial planner.

If you feel you need a little help rather than doing it all yourself, Australian Alan Hull offers a realistically priced service to help you invest in stocks by using a similar approach to Weinstein's. I've never used this service myself but I know people who have, and I've heard only good reports about it.
Google 'Alan Hull' and see what you come up with.

 

[brianwh]

Thanks Bunyip. Have ordered Weinstein's book. Had quick look at Alan Hull's website and it looks interesting. Worth further investigation.

Cheers

 

[ghotib]

Hi Brian,

We've spent the last 5 years ending salaried employment, selling our house, moving out of Sydney, establishing our SMSF, and looking for a new house. We've made so many big decisions in the dark... errr, based on incomplete information... over that time that we get confused about which one to second guess. I probably have a bit more sympathy for your uncertainties than other people have expressed, but I do agree with the general feeling that you're giving yourself a lot of unnecessary grief.

The job of commentators is to comment, always regardless of whether they have anything to say and often regardless of what they've said before. You might find you're better off ignoring them completely while you sort out a plan for yourself and focus on implementing and refining that.

At the moment you seem to be finding flexibility more of a threat than an opportunity, so why not put some constraints on yourself. What about spelling out your investment/trading plan, and the conditions for changing it, in your SMSF strategy. You seem to be wanting some kind of external accountability: the ATO is definitely external This could be a way to help yourself through these early and uncertain stages until you develop more confidence. You might well generalise the strategy document later, but seeing as you have to have one why not make it work for you.

Good luck. I gotta go check out another mortgage fun... no wait... I mean, I gotta look at a house <sigh>

Ghoti

 

[awg]

I took particular note of this comment when this thread was active a month or so ago. Since then I have done the calculations for the components of my SMSF for the March Quarter and find that the Australian Share component was -1.44% while the S&P 200 Index rose a bit over 1%. This dismal result was largely due to QBE (-16.5%), TLS (-12%) and TOL (-14.5%) although there were several disappointing results such as ARG (-5.5%) and SHL(-7%).

I would be very interested in what others think would be an appropriate response to this situation:

1. Do nothing. This is the first Q that I have had full reponsibility for my SMSF - previously I was using an FP - so I probably need a longer period of data to make a judgement.

2. Sell the underperformers. The problem I have with this is that market commentary on these stocks (leaving TLS out of the discussion - what a "dog"!) is generally very positive.

3. Sell all my Australian equities and move the money into an Index fund or a managed fund.


Any thoughts would be greatly appreciated

Cheers

Another possibility is to consider a core and satellite approach.

for instance, with regard to Oz equity place most in STW, then concentrate your research on just a few high conviction stocks.

Continue to monitor quarterly.

If your stock picks fail to outperform STW over a period of time, time for a big rethink.

I agree Weinstein is a good book, and simplifies the process but you still need to make buy & sell decisions, there are isues of buying at the peak, not being in the market etc.

What decision making process do you use for asset allocation within your SMSF?

If I perform exactly to match the index with STW alone, I still save a bundle on management fees.


btw TLS has majority buy recos from the analysts atm fwiw, although I wont be buying any, in the shorter/medium term I dont think it will underperform, seeing as you already have it.

I think a lot of potential bad news is already factored in, and eventually that asshat Conroy will realise a sensible negotiated solution will unlock value for both sides

 

[Julia]

Thanks Bunyip. Have ordered Weinstein's book. Had quick look at Alan Hull's website and it looks interesting. Worth further investigation.

Cheers

Gee whiz, Bunyip. You must have that magical something!
I've been trying to get brianwh to acquire the Weinstein book for months.
You come on and endorse that suggestion, and voila, it works!

At the moment you seem to be finding flexibility more of a threat than an opportunity, so why not put some constraints on yourself. What about spelling out your investment/trading plan, and the conditions for changing it, in your SMSF strategy. You seem to be wanting some kind of external accountability: the ATO is definitely external This could be a way to help yourself through these early and uncertain stages until you develop more confidence. You might well generalise the strategy document later, but seeing as you have to have one why not make it work for you.

Sensible suggestion ghoti.
Brian, what does your SMSF Investment Strategy say? When did you last update it?

 

[brianwh]

Thanks for the considered (and considerate) thoughts everyone.

I'm coming to the idea that my situation is somewhat different to many/most of the people who post on here. As I pointed out in an earlier post on this thread, the share portfolio that I have in my SMSF is made up shares selected on the advice of a FP. About 6 months ago I severed ties with this FP but of course still have the share portfolio.

So...

The dilemma I now have is that this portfolio is not matching (in the short time I have been monitoring it) benchmarks like the ASX 200. I regularly read on ASF threads "if I couldn't beat the XJO I'd give the game away" type comments and would like to think that, in time, I could do the same.

Thanks again. Sorry if I'm hijacking this thread and monopolising it for my own benefit.

PS: Julia, you may be pleased to know, I had ordered Weinstein's book before Bunyip posted and it was at your urging! Cheers

 

[bunyip]

Thanks Bunyip. Have ordered Weinstein's book. Had quick look at Alan Hull's website and it looks interesting. Worth further investigation.

Cheers

Brian

Apart from being a very simple and effective strategy for consistently outperforming the market, a big benefit of the Weinstein system is that it requires only one hour of your time each weekend.

The following link could be of interest to you.

http://www.youtube.com/watch?v=wEypGm5ahCI

 

[Julia]

Thanks for the considered (and considerate) thoughts everyone.

I'm coming to the idea that my situation is somewhat different to many/most of the people who post on here. As I pointed out in an earlier post on this thread, the share portfolio that I have in my SMSF is made up shares selected on the advice of a FP. About 6 months ago I severed ties with this FP but of course still have the share portfolio.

So...

The dilemma I now have is that this portfolio is not matching (in the short time I have been monitoring it) benchmarks like the ASX 200. I regularly read on ASF threads "if I couldn't beat the XJO I'd give the game away" type comments and would like to think that, in time, I could do the same.

Brian, I think some while ago when we were discussing benchmarks (maybe in another thread) I said that I don't measure the performance of my p/f against any external benchmark. Rather, I have a % return I need to get from my capital to give me enough to live on, plus cover inflation and make some addition to capital each year. To this end, there are times when I'll be all in cash, i.e. during the GFC.

Do you think you might be focusing too much on what other people's expectations are for themselves? As long as you can fund what you need to, what does it matter if you're doing better or worse than anyone else?

If however, you're not feeling satisfied with what your investments are doing for your own sake, then it would seem a bit of a change of direction might be helpful. That's all I've been saying, and I'm very sorry if I was sounding impatient.

If you consider the SMSF Investment Strategy, the prime objective has to be to provide retirement funds to members. Only you can determine what level these need to be at, and how this can best be achieved.

We will all have our own strategies, but imo when one is no longer participating in the work force, capital preservation and growth should be the main focus.

Thanks again. Sorry if I'm hijacking this thread and monopolising it for my own benefit.

You are not at all monopolising it, Brian. We can all learn from one another.

PS: Julia, you may be pleased to know, I had ordered Weinstein's book before Bunyip posted and it was at your urging! Cheers

Ah, hope you realised my comment was very much tongue in cheek, Brian.
I'll be very surprised if you don't find a new outlook from reading it, and it will also be really helpful in your deciding which of your existing shares to flick off.
Hope you'll let us know how you go when the book arrives.
And, I'm absolutely serious about reimbursing you the cost if you don't find it helpful!

 

[Muschu]

Hi Brian

You and I have communicated as you will recall.

Bunyip and Julia offer experienced quality advice. I guess the bottom line is that we all need to find an investing path that suits our personal situation -- and here we will vary from one another. But I do consider it important to have a strategic path -- even if it is one that changes.

As I have told you I use a professional analyst with whom I am comfortable. I do not have the expertise to operate without some guidance and am happy to pay reasonable fees to a good strategist.

I've also been in cash more than once during the GFC but am in the market now [since March 2009] - to the tune of about 75% - and also ready to leave again if need be.

I have had a quick look at Alan Hull's website [thanks Bunyip] and will check it further.

And these recent posts have caused me to take Weinstein's book off the shelf again for another read.

I think the most important thing I have learned is that I will not win on my investments every time. If I have to sell at a loss I will. But this past year in particular the win:loss ratio is strongly in my favour.



Cheers

Rick

 

[harks11]

This is my first post, so first off I would like to say thanks all those who give their rich experience to the mugs like me out there who are thoroughly fed up with the feeling of being ripped off by commissions. I have a fairly healthy super account with a retail company. and it has not generated enough to reinvest one dollar. It all goes on costs. I was going to move it into and Industry Fund but with a some work I see the smsf being so much better in many ways.

From reading the many posts it is important to "monitor" the stock reasonably closely.

Q1 Can you suggest or point me to where there is some advice (or opinion) on the best cost effective program for that.

At this stage my plan is to wait for the fin year to be over, move my money to an industry fund in cash then move most out to my smsf.

I am over 50 so still getting contributions from work and the Industry fund will provide a simple cost effective vehicle for contributions and insurance

Q2 Does this make sense ?

 

[Julia]

Why go through an industry fund before setting up your SMSF?

 

[harks11]

Why go through an industry fund before setting up your SMSF?

After reading through the posts. It looked like an easier way to transition. Will the employer have any issue with depositing to a smsf.

 

[sails]

After reading through the posts. It looked like an easier way to transition. Will the employer have any issue with depositing to a smsf.

I don't think it should be a problem unless it's employer specific. Once your smsf is set up, you supply them with the details as you would for any other super fund of your choice.

 

[Mavis]

Providing you are not a Government employee your employer can deposit funds directly into your SMSF. With regards to Insurance before you roll the funds over you may want to check if you are required to leave a balance in your exisitng fund to keep your current insurance. I would recommend keeping your existing insurance until you have found alternative insurance to ensure there is no period in which you are not covered. You can hold life and TPD insurance in your SMSF.

 

[vincent191]

Before your Employer can contribute to your SMSF they wil need a letter from ATO that it is a complying fund. Quite easy to get.

 

[Mavis]

Your accountant will suppy the complying fund letter once the ABN and TFN have been issued.

 

[harks11]

Thank you all , great feedback. I am growing in confidence every day that this is the right thing to do. Its just new.

Any thoughts on my second question on software. I had a look at the software section and can not believe the range.