Take control of your super
By setting up an SMSF places you in control of the investing. You must set out your goals and choose the best investments to help you achieve them to invest successfully. The ability to build a portfolio to suit your current lifestyle needs, short- and long-term goals, changing circumstances and market conditions is a key SMSF investment advantage.
You can choose from a broad range of asset classes to invest in, which include:
Australian and international shares (listed and unlisted)
residential or commercial property
cash and term deposits
fixed income products
The three steps to SMSF investing
These three areas are important to include in your investment considerations despite every SMSF trustee having different investment goals:
1. Capital growth (building wealth)
Capital growth is an increase of the value of an investment over time in the market. If you are wanting long-term investments or managing your life savings for an inheritance asset for your beneficiaries this area is important. Typically, they provide a greater return than defensive assets i.e. cash, but you need be prepared for higher volatility and potential capital loss.
2. Income generation (earning regular payments)
If you are wanting to fund lifestyle expenses with your super and investment returns you invest in assets that provide stable income or regular payments (such as interest or dividends). Generally Income assets have little or no growth but provide a steady cash flow and are vital to diversification strategies.
3. Capital preservation (protecting wealth)
Some investors main goal is to protect their hard earned savings and in doing so will accept lower returns in exchange for lower risk (like bonds and term deposits). Preserving capital is important for people who have limited time to recover from market losses or rely on their SMSF to fund living expenses in retirement.
Experience investment control and flexibility
With an SMSF you choose where, when and how much to invest as opposed to Retail and industry funds who make decisions to benefit all members. This provides you with greater control and flexibility and provide a higher level of transparency, allowing exposure to certain industries, asset classes or ethical investing opportunities.