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Positive Expectancy
- Joined
- 24 September 2008
- Posts
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- 133
And more satisfying when you see the performance of your self managed funds consistantly out performing the "professional" funds.
Still cheaper to do it yourself.
Yes, you are right sometimes it is cheaper doing it yourself
That time of the year again. Sit up and watch the tour and do the superannuation return.
I use BGL’s simple fund to do the books. At this stage the books are not audited for 2011/2012 but everything balances.
The fund has two members both in accumulation phase for next 20 odd years. Only a very small amount of contributions/rollovers added this year. The fund is sufficient that we try to minimise contributions.
Even though this is an anonymous forum I’m choosing to keep balance private - to put the returns and strategy into context it should be sufficient to indicate that the fund is in excess of a million dollars. The combination of fund balance and time until access allows for an aggressive risk profile.
Strategy is basically to buy quality businesses at a price that I think makes sense and hold them for as long as the business continues to perform. If I can't find anything to buy at the right price I stay liquid and wait.
Cash & Interest rate securities currently stands at 13% of funds, the rest is invested in 9 Australian listed companies Not a lot of activity this year, one company sold in script offer and replacement is being sold down, some rebalancing of positions that have grown large and some accumulation of a couple of the other holdings.
2011/2012 results.
Gross Investment Return = 19.25%
(2010/2011 = 63.40%; 2009/2010 = 37.45%)
After tax and expense Return = 17.30%
(2010/2011 = 56.54%; 2009/2010 = 30.67%)
Due to unrealised gains there is a difference between tax expense and tax paid. This difference is accounted for as a ‘Deferred Tax Liability’ and is currently an additional $39,000 per Million of Net Assets that is available for investment. This amount is effectively a tax free loan from the tax office until a capital gains event occurs. If that event does not occur until after age 60 the tax office will kindly wave the liability.
Expenses:
Administration expenses including life insurance = .08% [$800 per Million of Net Asset]
Brokerage = .03% [$300 per Million of Net Assets]
Anybody else like to share their SMSF thoughts, strategies or results.
Whilst mark to market valuation jumps around a bit in the short term and includes a negative year in 2009 the income stream is more stable and consistent; to date the income stream has grown at a CAGR of 42.3%.
18 Years left until preservation age
This is the 10th set of financial reports since my wife and I switched our super into a SMSF. So I can now extract 9 years worth of performance figures.
CAGR over those 9 years has been 34.4%. (after tax) The CAGR for the Allords accumulation index over the same period has been 7.9%
100K compounded at the index return over those 9 years would have grown to $197,716 (ignoring tax) whilst 100K in the SMSF has grown to $1,427,500. (after tax)
My focus is investing for future cash flow.
The chart below shows the Income Stream and Net Value [different scales]
View attachment 53108
Whilst mark to market valuation jumps around a bit in the short term and includes a negative year in 2009 the income stream is more stable and consistent; to date the income stream has grown at a CAGR of 42.3%.
18 Years left until preservation age
This is the 10th set of financial reports since my wife and I switched our super into a SMSF. So I can now extract 9 years worth of performance figures.
CAGR over those 9 years has been 34.4%. (after tax) The CAGR for the Allords accumulation index over the same period has been 7.9%
100K compounded at the index return over those 9 years would have grown to $197,716 (ignoring tax) whilst 100K in the SMSF has grown to $1,427,500. (after tax)
My focus is investing for future cash flow.
The chart below shows the Income Stream and Net Value [different scales]
View attachment 53108
Whilst mark to market valuation jumps around a bit in the short term and includes a negative year in 2009 the income stream is more stable and consistent; to date the income stream has grown at a CAGR of 42.3%.
18 Years left until preservation age
Whilst mark to market valuation jumps around a bit in the short term and includes a negative year in 2009 the income stream is more stable and consistent; to date the income stream has grown at a CAGR of 42.3%.
Your posts in the various threads on this forum have helped me immensly in reaching that goal, so thanks.
Whilst I have 37 years (unless it changes, which it likely will) until preservation age, my goal is firmly set to get there MUCH faster. You are an inspiration for me!
Congratualations. I should get you to manage my investments because you are doing a much better job than I am.
Sorry to add to the list of questions, but do you invest in global companies, or just on the ASX?
Very well done Craft. Most impressive is the small drawdown during GFC and the spurt afterwards.
Question please: of the income stream growth, how much of the 42.3% is organic vs increased asset base? Rough estimates will do - don't need to do a co-variance analysis!
Out of interest by "income stream" do you mean dividends/interest received? And what is your investment policy with respect to dividends: direct reinvestment (if available) or accumulate cash?
I haven’t been as disciplined in my reinvestment process as I should have been of late. Mucking around at the edges bringing forward and delaying cash deployment to try and add a bit of value in short term timing and in the process wasting thinking and effort without I feel adding any real value to the long term strategy. I put my increase in activity down to stimulation from forums etc which I was never involved in as I developed my approach.
On that note – I’m trying to not come her to often so sorry if I miss a few posts.
Catch you infrequently.
Hi craft - welcome back, hope you had a great Christmas and New Year period and that your travels were enjoyable.
What software are you using to generate the equity curves? I'm still using MS Excel for mine, and only enter the market data in manually at the end of the month and when I make a purchase (which is mechanially mid-month if there is value on offer). so there are far less data points, anything more is very time consuming.
Thanks for that. It's a shame that it is embedded within the trading / charting software and there is no option for a standalone version! Looks really good, I will have to keep an eye out for similar stand alone software packages with the same functionality.The portfolio manager module on a pretty basic bit of charting software called insight trader. Simple as pressing one button to generate/update the file and then charting it as per any other security.
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