Superannuation Investment Choice

HI Everyone

Just after some expert opinions, im currently 34 yrs of age and only have $70K in super which I think is dismal. Its currently invested in Australian sustainable shares 50% and high growth 50%. The sharemarket seems to be loosing me a b it of money wondering if im smarter to switch investment strategies and what would be best. Ive looked at some predictions and the asx is predicted to not vary to much from where its at now but mid 2017 they predict a downward spiral. Im just wondering should I get out now and what would everyone recommend to make some good money. I know its all a gamble but would like tohear peoples opinions and reasonings why to change.

Thanks

 

Hi, Usually it depends on your risk profile, goals and timeline when you need to access super. With the current super rule you won't be able to access your super for another 26 years, so assume that you can handle the market volatility (ie. not selling/ switching to Cash if the market drops) one would tend to choose the aggressive option which is High Growth ( not advice). As long as you don't switch/sell out when there is a downturn, with regular contributions, during the market downturn you would get more units than in a normal market condition.

Just my opinion, not advice

 

You are probably close to 100% invested in shares.
Make sure you understand the different investment options available to you.
Marg

 

So im taking it this is a bad thing I know my other investment options but has anyone got any tips/pointers to what may be best looking at the current downward spiral in the australian economy. I did note a few years back international shares returned 17% which is very very outstanding that would have given my super a good boost.

 

Start to salary sacrifice onto super, rather than relying on the standard contributions from your employer.

 

Who is they ?? If you really think things will be so bad invest in debt collectors such as CLH, or Bursons Auto Parts as people will spend more keeping there old cars going instead of buying new ones. If you cant access your money for 30 years whats it matter what happens next year.

 

Yeah, but which plan within the fund. I think mine has cash, balanced or growth. How do you pick which one?

 

Depends on age. The further away from retirement, the riskier/ more growth you go.

Mine is in growth (not in the riskier 'shares only') because retirement is over 15 years away, and I was a late starter...

 

Always keep it in growth - even when nearing/in retirement as you still need a decent return on your investment.

 

In my fund in the last 2 years, balanced has outperformed growth. Over the long term, I think growth would outperform. I will switch to growth at some point. Just trying to work out when.

 

Oh god... so I've been doing a little market timing lately the past year.

Switched heavily into equities when the ASX hit 4800 earlier in the year and rode it up till about June. Just before Brexit changed to a 45%/55% Aus shares/Fixed Interest split.... so still partly caught the July rally.

On 1 August (market peak?) changed to 25% Aus shares / 75% Fixed Interest.... when equities go up 6% in a month before what looks to be a pretty lacklustre reporting season it's time to take sugar off the table.

Look I understand market timing is a no no... but if I get a basic 3% return on Fixed Interest for the remaining 11 months of the year, after getting near enough to 5% overall for July I'll be quite happy with that.

But yeah I probably will switch back to a growth bias when I feel comfortable.

 

Remember that the risk when switching, you will crystàllise any losses incurred to date.

 

I am retired now and the majority of my money is in growth as I plan living another 20 or more years and current bank deposit rates won't cut it.
I have currently around 3 years of cash requirement in 'conservative' to cover any downturn. For the previous 25 years I have been very heavily into growth.

 

As we age we get more conservative but as @bashworth has done, is to keep 10-15% of funds available should the unexpected happen in the short term but the majority is there for later when it may be required - we don't have to have 20 years of capital tied to low risk investments.

 

If you are making regular contributions then a downward spiral at this stage of your superannuation journey would be a good thing

 

Losing money is never good. I'm assuming I should just leave my options as is. Interesting looking at the Australia super site and the graphs and percentages on each investment option over the last 5 years. On the tv advertisments they claim an average return of 7-9%pa for members yet over the last 5 years the best investment option has only been about 4.9%. with most doing dismall below 1% I have to wonder sometimes whats the point especially if you are a low wage earner like myself.

 

But do you get hit with a buy/sell spread when switching around so much ? Sometime a "no fee" switch is advertised but the fee is hidden inside the spread. Varies with different funds though.

 

Why would losing money be a good thing?

 

• The money you have already got in super is only subject to a short term loss. . . the market has lots of time to recover for long term gain before you retire.
• The contributions you are making now will be cheap compared with their value after the downturn ends

 

Thanks @bashworth