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What should my SMSF investment plan be?

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I have a SMSF with about $300,000 in the fund. I am wondering what my investment plan should be. I am thinking $150,000 in local shares, 100,000 in a fixed deposit and $30,000 in a bond fund and $20,000 cash? I am 45 and my kids have left home and my wife and I just want to build up our super as we have paid off our home. Am I on the right track?

I reckon 50 per cent in shares and 33 per cent in a fixed deposit tells me that you are reasonably balanced investors with a conservative inclination. You own your home, so you have property exposure but you have to understand that if you get say six per cent on your fixed deposit and your shares return, say, 10 per cent made up of dividends and share price growth, then it will bring down your overall return.

A quick calculation tells me that you could get total return of around seven to eight per cent on this kind of portfolio and if you wanted more you would have to ramp up your stocks exposure.

Make sure you select stocks that have a good history of paying dividends and this should provide a solid foundation if share prices fall. And remember to buy companies that have great underlying businesses.

I know an adviser probably could create a more professional portfolio of assets for your SMSF but I think you are on an OK track.

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Monday, March 26, 2012

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