Friday, 10 May 2013

My SMSF account balance passes half-million dollar mark

The value of my account balance within our self-managed superannuation fund surpassed $500,000 for the first time yesterday. After the set-backs caused by the GFC and EFC (that are apparent in the chart below), the recent strength of the Australian stockmarket, and slight dip in the strong Aussie dollar (which boosts the value of our international stock investments in AUD terms), has pushed up our SMSF by more than 10% since the start of 2013. My account balance is moving in the right direction, with the lowest 'expected' rate of return (4% pa) line now looking within reach again. The middle 'expected' rate of return (7.5% pa) [which I considered the 'most likely' long-term outcome when I initially setup our SMSF in mid-2007!] still looks difficult to reach by the time I plan to retire (around 2027), and the 'stretch target' of 10% average rate of return is looking rather silly now, although if I'd taken a couple of years to 'dollar cost average' my rolled-over superannuation out of cash and into market-linked investments, rather than just six months, I might have even achieved that target. Goes to show how big an impact 'market timing' can have, and also how impossible it is to 'time the market' deliberately, rather than just by dumb luck.

Our SMSF is invested in a high-yield bank account (4%), ASX200 CFDs (6.4%), and Vanguard LifeStrategy HighGrowth Index Fund (89.6%). The current overall asset allocation is roughly:
4.0 % cash in SMSF bank account
3.6 % Aus fixed interest
5.4 % Int fixed interest (hedged)
45.7 % Aus shares
32.3 % Int shares
4.5 % Aus property securities
4.5 % Int property securities (hedged)

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