{"id":1604,"date":"2023-06-30T05:17:01","date_gmt":"2023-06-30T05:17:01","guid":{"rendered":"https:\/\/actinvest.com.au\/?p=1604"},"modified":"2023-06-30T05:17:01","modified_gmt":"2023-06-30T05:17:01","slug":"high-interest-and-inflation-can-pay-dividends-for-smsfs","status":"publish","type":"post","link":"https:\/\/actinvest.com.au\/index.php\/high-interest-and-inflation-can-pay-dividends-for-smsfs\/","title":{"rendered":"High interest and inflation can pay dividends for SMSFs"},"content":{"rendered":"

While much of investors\u2019 attention is naturally aimed towards the impact on mortgage repayments, higher rates are opening massive opportunities for retirees in term deposits, bonds and lower-risk assets, says the director of a leading wealth management firm.<\/strong><\/p>\n

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Jamie Nemtsas, managing director of Wattle Partners, said although there will always be economic headwinds facing investors, the current situation is somewhat unique.<\/p>\n

\u201cInflation aside, higher interest rates have changed the game,\u201d he said.<\/p>\n

\u201cThose expecting 10 per cent per annum every year will be disappointed. More than ever, it is about resilience and true diversification, across country, style, and asset class.\u201d<\/p>\n

\u201cA lot of younger people establishing an SMSF have a purpose in mind and that is how their journey starts \u2013 it is less likely to be about the outcome,\u201d he said. \u201cTypically, younger trustees want assets \u2013 usually real estate \u2013 but superannuation is supposed to be for retirement and to produce an income stream from multiple sources.<\/p>\n

\u201cSo their journey doesn\u2019t necessarily start correctly.\u201d<\/p>\n

Mr Nemtsas said it is best to avoid \u201csimple rules\u201d when it comes to building portfolios.<\/p>\n

\u201cRather it\u2019s about finding something you are comfortable with, but also is appropriate for your objectives,\u201d he said.<\/p>\n

\u201cOne big thing for us is the \u2018sleep at night\u2019 money \u2013 which is finding your number of how much you need in cash to be comfortable in your retirement.\u201d<\/p>\n

Mr Nemtsas said that the portfolios of the younger demographic of SMSF trustees tend to be concentrated in one thing like property trusts, and not on building a diversified portfolio.<\/p>\n

\u201cFinancial literacy is still very low,\u201d he said.<\/p>\n

\u201cPeople don\u2019t understand they have to manage every cent of their SMSF and they don\u2019t understand the need for diversification.\u201d<\/p>\n

Trustees have an obligation to increase their financial literacy said Mr Nemtsas, not just around compliance issues but also in regard to investment decisions.<\/p>\n

He said he believes that there should be in an investment portfolio a regular process of rebalancing allocations to ensure the SMSF is gaining as much as it can from the investments it has made.<\/p>\n

\u201cLet\u2019s say you\u2019re a 40-year-old executive, and you\u2019re going to work for the next 20 years, you want your capital to grow so you invest in more equities, more real estate,\u201d he said.<\/p>\n

\u201cBut when it comes to retirement, income is more important so how do you rebalance your portfolio to do that?<\/p>\n

\u201cI encourage clients to have an investment policy statement where they write down the rules of their investment strategy \u2013 things like don\u2019t buy speculative assets, don\u2019t buy too many shares in the same sector, don\u2019t be overconfident, but also not to be scared when there is blood on the streets.<\/p>\n

\u201cYou want to avoid making mistakes as they are the biggest thing that set you back from reaching your retirement goals.<\/p>\n

\u201cIf you contribute your $27,500 throughout your working life, you will have it set, but it is the mistakes like buying too much crypto that can ruin your retirement goals, so learn from mistakes and minimise them by constantly reviewing and monitoring your investment portfolio.\u201d<\/p>\n

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\n
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Keeli Cambourne<\/div>\n<\/div>\n<\/div>\n
\n
26 June 2023<\/div>\n
smsfadviser.com<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

While much of investors\u2019 attention is naturally aimed towards the impact on mortgage repayments, higher rates are opening massive opportunities for retirees in term deposits, bonds and lower-risk assets, says the director of a leading wealth management firm.<\/strong><\/p>\n","protected":false},"author":1,"featured_media":1605,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts\/1604"}],"collection":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/comments?post=1604"}],"version-history":[{"count":1,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts\/1604\/revisions"}],"predecessor-version":[{"id":1606,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts\/1604\/revisions\/1606"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/media\/1605"}],"wp:attachment":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/media?parent=1604"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/categories?post=1604"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/tags?post=1604"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}