For those who entered our share game at the YP Field Days in September and who can't remember what shares they selected, we have attached the "full list" as at January 25th.
Good luck in the game! It runs through to the end on March.
YP Field Days Share Game.pdf
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Recently I was talking to a farmer about his super fund. He described how several years ago his accountant had recommended that he transfer some of his farming land into super.
“I regret doing it” he said. “See how super funds have performed. I have lost a lot of money!”
I tried to explain to him that he still owned the same piece of land, albeit in the name of his super fund rather than personally. The fact that mainstream super funds had performed poorly was hardly relevant to him.
He, like many others had got caught up in the negative sentiment at the time of the GFC. Investment markets were on the nose and super fund returns were in the spot light.
He, like many others was confused about how superannuation works.
Most super funds now have a wide range of investment choices. These can cater for conservative investors (cash or term deposit options) right through to more aggressive investors (shares and geared funds). Too often, I see people with their funds invested in the ‘default’ option, which is then never reviewed.
Peoples’ tolerance to risk generally does change as they get older. Accordingly, investments should be reviewed regularly and should move in line with their risk tolerance. You may borrow to buy an investment property when you are in your 30s, but would you do it in your 60s? Perhaps not. Super is no different. The default ‘Balanced’ option may be too conservative in your 20s and 30s but may be too risky in your 60s.
Alternatively, as my farmer client had found, a self managed super fund provided him with the opportunity to invest in assets that he was familiar with and understood, his own farm land.
When was the last time you reviewed your super investment choices?
Super retains its position as the most effective place for your retirement funds to be placed. Tax and Centrelink concessions can be significant, and can more than offset investment market fluctuations. A decision as to how superannuation can help you save for retirement should have nothing to do with investment markets.
As always, in relation to financial matters, seek professional advice. Don’t just do something because a family member or your mate at the BBQ thinks it’s a good idea!
Scott Keeley
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While the severity of recent global stockmarket events cannot be understated, it is important to retain some rationality. “Billions Wiped Off Sharemarkets”, “Stocks Plunge On Fears Of Global Turmoil” and even “Bloodbath” are among headlines seen in recent weeks. The standard photo of a Wall Street trader with his head in his hands pops on the front pages of various publications. When markets inevitably rally a few days later, I always look to see the “Billions Added to Sharemarkets” headline, but alas, I’ve never seen it. It obviously lacks the drama!
A decision to join the many shareholders who sell their shares during these panic-driven frenzies should not be made lightly. Humans are impulsive, and people’s best laid plans are in danger of being thrown out the window if they act at the first sign of sharemarket weakness.
US Recession, US Ratings Downgrade, European Debt – whatever the reason, it is important to remember that the market corrections associated with these events, like the dotcom bubble of the early 2000s, September 11 and the 1987 stockmarket crash, are likely to be only temporary and in each case, global stockmarkets recovered and achieved new highs.
With current events following on from the Global Financial Crisis, it seems that this “bear market” has lasted for longer than usual, with months (or even years) where it feels like the market has gone nowhere.
Most investors hold shares, or have shares in their super fund, as part of a long term investment strategy. These events provide distractions to this strategy, but should not fundamentally alter it. I don’t completely advocate a “do nothing, ride it out” strategy, however if you hold quality Australian Shares in companies that are continuing to grow and pay strong dividends, it may pay to consider your overall position carefully before joining the “panic sellers”.
I can help you review your shares and investments and ensure they are suitable for you. Please contact me on (08) 8333 2488.
Scott Keeley
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