Despite the temptation to “fast track” investment opportunities during market volatility, Australian Unity Investments (AUI) has reminded SMSF investors to develop a strategy that meets long-term savings goals.
Strategy development is particularly critical for SMSF trustees, given that the purpose of a super scheme is to provide for retirement, head of portfolio management at AUI Edward Smith told SMSF Adviser.
While strategies are likely to vary between investors, “the common ground should be that all investors have a strategy”, he said.
“The most important thing is that all investors have some kind of long-term strategy in place that helps them define what their goals are and what kind of investments best suit them,” Mr Smith added.
Investors shouldn’t wait for a “particular point in time” to develop a strategy, such as when markets reach a certain level of stability, he said.
“In financial markets, it’s always ‘interesting times’ one way or another, so there’s no point waiting until things are ‘normal’ before developing and implementing an investment strategy,” he said.
Mr Smith pointed out that investors can be distracted from their long-term strategies by looking to short-term opportunities, such as tax minimisation schemes. This was a common occurrence during the global financial crisis (GFC), he added.
“[It’s important] to avoid knee-jerk reactions according to market volatility,” Mr Smith said. “It’s easy to get sidetracked by what is happening in financial markets, but investors need to make decisions based on where they are, not on where the market is.”
“Indeed, following the GFC, many people abandoned any concept of a diversified approach by putting everything into cash.”
SUBSCRIBE TO THE SMSF ADVISER BULLETIN
- 29 May 2017Lawyer warns on ‘practical difficulty’ with TRIS commutationsBy Miranda Brownlee
- 29 May 2017Medicare levy rise spurs estate planning considerationsBy Miranda Brownlee
- 29 May 2017CFS highlights flaw in housing super saver schemeBy Miranda Brownlee
- 26 May 2017Merged association poised to shake up member servicesBy Katarina Taurian
- 26 May 2017Positive exclusion as LRBA amendments introduced to ParliamentBy Miranda Brownlee
- 26 May 2017Midwinter releases superannuation calculatorsBy Staff Reporter
- view all
- Lawyer warns on ‘practical difficulty’ with TRIS commutations
Commuting a TRIS on 1 July 2017 instead of 30 June could result in an additional technical issue for SMSF clients, according to an industry ...read more
- Medicare levy rise spurs estate planning considerations
In light of the Medicare increase, SMSF practitioners may want to consider whether clients should direct their superannuation benefits to th...read more
- Merged association poised to shake up member services
Under the united banner of SISFA, two newly merged representative bodies are looking to provide “unique” member benefits, including faci...read more
- view all