How to Review Your SMSF Investment Strategy By Jacqueline Hodges
Whether you are investing for short-term growth or preparing for the longer-term, you should make time to regularly review your investment strategy. Your investment strategy helps you in making investment decisions based on your goals, risk tolerance, and future needs. The investment strategy may focus on capital growth and rapid growth, or it may follow a low-risk strategy with a focus on wealth protection. In this article I focus on an Investment Strategy for SMSF Trustees.
Australian Superannuation law states your strategy must consider the following specific factors in regard to the whole circumstances of your fund: The risks involved in making, holding and realising, and the likely return from your fund’s investments regarding its objectives and cash flow requirements; composition of your fund’s investments including the extent to which they are diverse and the risks of inadequate diversification; liquidity of the fund’s assets; fund’s ability to pay benefits and other costs it incurs; and whether to hold insurance cover for each member of your SMSF.
This is a fairly heavy set of factors to comprehend. So, let’s try breaking them up into something a little less complex.
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