SMSF Strategies

[Fraxinus]

This is my first post. I manage an SMSF with share market investments. I was using a financial adviser until 18 months ago but he lost me heaps so I took it over, read everything I could get my hands on about the share market and my particular shares and now use an online broker.
I am now becoming more confident and my portfolio is doing quite well (thanks to a fair wind on the market) I also subscribe to one of the investment newsletters.
I mostly buy and hold as I am accumulating for my retirement and I’m too busy working to spend time glued to the screen looking for trades. I also like to sleep at night.
My biggest dilemma is deciding when to sell.
I also have an ethical bias to my portfolio which excludes me from fossil fuels, gambling stocks and companies with a questionable environmental or social record, so I have difficulty in particular choosing resource stocks, although I think I’m doing OK with Portmans.
I’d be interested to know if anyone else on the forum has experience managing an SMSF and if there are any experiences, tips or tricks they could share with me.

 

[clowboy]

Well I have experience managing a SMSF but I can't really say that I have any tips etc to share.

 

[RichKid]

I also subscribe to one of the investment newsletters.

I think I’m doing OK with Portmans.
I’d be interested to know if anyone else on the forum has experience managing an SMSF and if there are any experiences, tips or tricks they could share with me.

First of all, Welcome!!

Which newsletter do you subscribe to if you don't mind me asking? just out of interest, see the newsletters thread if you've got time and post something if possible as I'd be keen to discuss things, I use a lot of free tips sheets (newspapers and mags).
Portman looks like it's a takeover play, you must feel fortunate, might go North this week at high speed!!

Sorry I don't have anything to offer on SMSF but I'm looking into setting one up as my trades are doing better than my super manager and even cash rate returns are good for me as the management fees etc really kill my super. I can't believe they get away with such poor performance.

 

[Fraxinus]

First of all, Welcome!!

Which newsletter do you subscribe to if you don't mind me asking? just out of interest, see the newsletters thread if you've got time and post something if possible as I'd be keen to discuss things, I use a lot of free tips sheets (newspapers and mags).
Portman looks like it's a takeover play, you must feel fortunate, might go North this week at high speed!!

Sorry I don't have anything to offer on SMSF but I'm looking into setting one up as my trades are doing better than my super manager and even cash rate returns are good for me as the management fees etc really kill my super. I can't believe they get away with such poor performance.

I subscribe to FatProphets although I haven't used many of their recommendations yet. I have also joined the Australian Investors Association.

The Portman offer has just been announced at $3.40. Good one!

I sympathise with you on management fees. I think they should be linked more directly with performance.

I feel more in control now I'm managing my own super. The only drawbacks are the auditing fees (money for accountants) and every few years the trust deed has to be rewritten (money for lawyers).

 

[RichKid]

I subscribe to FatProphets although I haven't used many of their recommendations yet. I have also joined the Australian Investors Association.

The Portman offer has just been announced at $3.40. Good one!

I sympathise with you on management fees. I think they should be linked more directly with performance.

I feel more in control now I'm managing my own super. The only drawbacks are the auditing fees (money for accountants) and every few years the trust deed has to be rewritten (money for lawyers).

Hi Fraxinus,
Well done on Portman, Fat prophets seem ok I like them, you can find their old reports via google and their annual reports are free on their site. Tipsheets often cover the same stocks but FP seem a bit better than the rest. I also keep an eye out in the papers for broker picks but make up my own mind.

Are there any good books that you found useful when going out on your own with your fund? Any you can recommend for someone like me who's considering a similar path (maybe next year)? Let's hope the super choice changes will make things fairer, might take awhile though.

 

[Fraxinus]

Regarding books and other reading materials... I did dip into one of the Warren Buffett books which had some sage advice. I also read a number of the ASX on-line tutorials. I bought investment mags for a while and I now also subscribe to Fairfax digital's newstore which sends me a note whenever there's a story about one of my stocks.

The E-trade site has been educational as well. They provide a lot of background info on companies as well as recommendations and stock selectors that you can use to choose stocks that fit your criteria.

I recently started reading the online mag Aireview which summarises what brokers are recommending.

I also like to read the personal investment section in the Sun-Herald.

 

[drmb]

This is my first post. I manage an SMSF with share market investments. I was using a financial adviser until 18 months ago but he lost me heaps so I took it over.......

I can empathise with that! My f/a was taking management fees of close to 45k p/a and 70% of my portfolio was reported quarterly with brackets around the amounts in the growth column. He kept saying we're buying on the market as it goes down but that's all his picks ever did! Go down. For that amount of money I set up my own smsf and made a few mistakes initially, but recovered from that. I am vey interested to hear how other smsf owners diversify?

 

[Little1]

We have our own SMSF and have used a F/A since it was started 6 years ago. Everything is done through Assetchoice and they produce a report the accountant digests to spit out a tax return. Cost of manageing $400k, $5,300 + $1900 accounting and audit. How does this compare with others?

I did find an accountant in Melbourne who would do the books for about $700.

I was also going to ask if anyone has any strategies for SMSFs in a bear market as my understanding is SMSF can not take short positions or use derivatives.

Any books on subject?

Thanks guys

 

[tech/a]

Your question was when to sell.
A very intelligent and more important question LONGTERM than when to buy.
It will have MORE impact on SMSF profit performance than when to buy!

SELLING

(1) The portfolio. In total.
(2) Individual components of the portfolio.

(1) This is a long term investment so look long term.
(2) Again you need to look long term.
I would simply be holding stock which is in an OBVIOUS uptrend.
Selling stock which Has moved from a LONGTERM up trend to a down trend.
Moving held stock trading in a range over a longterm (say 6 mths) and doing very little to stocks which are in an OBVIOUS uptrend.

WEIGHTING
I would shift amount of stock held from this appearing to enter a DOWNTREND to those still in an OBVIOUS uptrend (So hold more $$s in the uptrending and less in the not so sure.
Same with those in consolidation--lighten those and go heavier Trending.

SIMPLE AS THAT.

Long term thinking.

Little There will always be trending stock even in bear markets---to the long side.

Longterm thinking.

I have my own managed superfund,Am a Licienced Builder not a financial planner---thank GOD.

Remember---"most Financial Planners are striving to BECOME as wealthy as their clients!!!"

 

[money tree]

Remember---"most Financial Planners are striving to BECOME as wealthy as their clients!!!"

Golly, theres a shock. Are you suggesting there are some FP's who are not yet rich and trying to get poorer?
Or that FP's will continue to work for low pay once they become a millionaire? Poor people usually have no need for a FP, so why would it be a shock that many of a FP's clients are wealthy?

Your statement is constantly repeated as though its some phophetic ingenius wisdom, when in fact its an ignorant misleading generalisation designed to scare people away from getting advice when they may be in trouble without it.

I guess you better not go to the doctor, cos he is trying to be as healthy as his patients!

what about your teachers at school? Did they all win the nobel prize?

Should we ignore the advice of all experts unless they can prove they are the worlds most successful in their field?

Its hilarious!

 

[Kimosabi]

The Financial Planner I went and saw a few weeks ago ADVISED me that I should Borrow money to invest in a managed fund so I could get some 'LEVERAGE'.

He told me all my existing investments were effectively crap, and that my money is better off being looked after by an 'EXPERT', "Wouldn't that be great", he said.

Anyway he rang me about a week an a half ago and asked me if I wanted to pursue the investment strategy he'd recommended.

I said to him that I was 'DEFINITELY' not borrowing any money to invest and that my research indicated that now is probably a really bad time to be investing and that I was more open to putting money into things like managed funds during the bottom of the Market (Not the top of a Bubble D1ckhead). ****, I still remember seeing negatives on my Super Statements a few years ago.

I asked him if he new anything about the downturn in property in the US, which he knew a little about, "BUT HE DIDN'T KNOW ANYTHING ABOUT THE US SUBPRIME MORTGAGE MARKET SELF-IMPLODING IN ON ITSELF". Seems I'm more informed than my financial adviser.

Anyway, he was starting to get a bit sh1tty with me by then so we agreed that he should give me a call after the World's Financial Markets have crashed. hahaha, He might be giving him a call in a year or so if last week's little speed bump get's some momentum.

Now I have serious trust issues with any of these Financial Advisers(Investment Brokers) because I was in Westpoint when the Receivers/ASIC moved in, and I have seen these supposed 'Wealth Consultants' in action and I didn't like what I saw.

 

[tech/a]

Tree we have been here before.

Get advice by all means but get advice from people who are living their advice (In the financial arena) not just professing it.

In the Finanicial arena if I wish to learn something BEYOND generalisations I'll seek out a RADGE whos Traded on the floor of CBOT.If I wish to discuss RISK I'll search out One of the other reefers who was Risk manager for Currencies with ABN AMRO Tokyo.

Property
I'm certainly not going to listen to a Planner who.
(a) Doesnt have a home of his own.
(b) Doenst have an investment property.
Start talking subdivisions,Community title developements and you get really dumb responses---ignorance abounds!

Business.
I'm not going to listen to an Advisor who has either no staff or perhaps a secretary.Netting $150k a year if he's lucky.
I run up to 20 which if you've never had 20 staff you wouldnt have a clue of the issues that generates.Nor would you have any idea of infrastructure needs as I move into 1 million $ projects interstate.
For this I search out mentors who have been there before me.You'd be suprised how much you can learn from people who have been there!
Talk to the majority of advisors---glum dumb looks

Call it Ignorant,Arrogant,Egotistical,Selfserving whatever you like.
If I'm investing what most would see as substantial sums I'm not going to entrust it with a novice.

No more than I would entrust Heart Surgery to my local GP.
Or My son would learn Optic Fibre and Laser Physics from his High School Teachers.

Tree beyond "GENERAL" advice the Financial Planning profession in my view is SADLY lacking,simply Managed fund salesmen in the larger majority of cases.

I had a Financial Planner who looked at my "Needs" and suggested I place $80k a year into Super.
Hell with that 80K I could grab $1 mill from my financiers and do a 4 apartment developement netting $350K---what will my Super return me?

Dumb look mainly as he knew I had done 2 such developements.

 

[yonnie]

I was also going to ask if anyone has any strategies for SMSFs in a bear market as my understanding is SMSF can not take short positions or use derivatives. Any books on subject? Thanks guys

no, that is not right.

you can trade derivatives like options, futures, cfd`s and warrants in a SMSF and take short positions as long as you dont sell them on margin.

 

[Jimminy]

a friend in finance told me that he has heard of people doing this.

Buy shares in your own name in a stock with low volume and then have your superfund buy them at a, say, a 10% increase on what you bought your original shares at.

So in otherwords they have transferred wealth from their superfund to their private broking account. Very ddogy I thought, but it got me thinking.....

I guess if the shares the superfund has bought still appreciate you win/win. But he seemed to think plenty of young people with quite a bit tied up in super are more than happy to do this for some quick change.

has anyone ever done this or heard of it happening.

 

[Prospector]

You have to buy shares at market rate, not an inflated one; so that strategy is definately not legal!

 

[yonnie]

jimminy,

could be done with low value shares like MBI.
quotes 0.5-0.6 cents

those shares are trading at both prices quite often.
personally you can buy them at 0.5 and sell to SMSF for 0.6 on a day that the 0.6 price is on the board.

Be cautious though what people tell you: you may not hear from them when ATO has a nosey and declares the SMSF non-complying and will have to pay tax in the SMSF at the marginal rate.
Some people are too clever for their own good.

 

[Jimminy]

You have to buy shares at market rate, not an inflated one; so that strategy is definately not legal!

But you are still buying them on market - hence the reason you would need a low volume or tightly held share where there is a gap from buy to sell.

 

[CFD]

As I understand it an SMSF can borrow money, they just can not use SMSF assets to secure the borrowing.

 

[Prospector]

But you are still buying them on market - hence the reason you would need a low volume or tightly held share where there is a gap from buy to sell.

When your SMSF buys shares from your personal account they are done through off market trades.

 

[yonnie]

As I understand it an SMSF can borrow money, they just can not use SMSF assets to secure the borrowing.

a SMSF cant borrow at all: thats a big no no

and besides: where would you borrow money without security apart from $ 20 from the corner shop?