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Do you have a sound Investment Strategy?

 


Generally, professional and retail investors find it extremely difficult to beat the market. As a SMSF investor, you'll still be selecting from the same underlying range of investment assets: shares, property, bonds and cash.

Diversify, it's wise to avoid risking all your retirement savings in one or a few investments. You'll still have to deal with the ups and downs of investment markets.

Investing successfully takes time, effort and discipline

You will have to sit down and think about your own investment philosophy and guidelines. After that, you have to choose your investments. This will mean reading and understanding all the prospectuses and product disclosure statements. Which investments do you look at? Which investments do you research?

Where do you find all investment types? Do you have an in dependent research body? It also means knowing your own risk tolerance and you will have to invest accordingly. Finally you'll need to monitor whether you've succeeded or failed and this will be an ongoing exercise.

Investment philosophy

How will you spread your money to manage risk? How long do you give an investment to prove itself: three months or three years? For example, suppose you buy an investment property today that proves hard to rent out. Do you hang on or sell out?

Choosing investments

What's an acceptable rate of return? How much risk are you willing to take with your retirement savings? Does the risk change for all of the investment or a portion of the investment? Every investor faces these questions, and must find answers that suit their own needs and circumstances.

Monitoring your own performance

Is your SMSF fund performing, or at least doing just as well as other funds after all your effort ? What about the taxation strategies? What about the up to date legislation changes? What are the restrictions?

You may be better off leaving it to professionals.

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