Array Financial Services July Newsletter
The investment outlook – it’s not all that bad! Here are nine reasons why
The past few weeks have been messy with Brexit, the Australian election, another terrorist attack in France and an attempted coup in Turkey. In fact, the last 12 months have been – starting with the latest Greek tantrum and China share market plunge a year ago. It’s almost as if someone has listened to Taylor Swift’s song “Shake It Off” and decided to try and shake up investment markets. This has all seen a rough ride in investment markets with most share markets falling into bear market territory at some point over the last year and bond yields plunging to record lows. This note reviews the worry list from the last 12 months, the impact on returns and looks at the outlook going forward.
Weekly Market Update
It has been “risk on” again over the last week in investment markets helped by a combination of good economic data in the US and China, good US earnings news and firming expectations of more policy stimulus in Japan.
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Borrow to make larger investments
Your SMSF could make a larger investment in assets such as shares and property by using cash in your fund and borrow the rest.
With SMSFs you can take greater control over the timing of tax events such as starting a pension without triggering capital gains tax when your superannuation assets move into pension phase. You may also have the option of transferring assets that you own into your SMSF.
Greater estate planning certainty and flexibility
You can nominate who you would like to receive your super when you pass away without having to meet some of the constraints that apply to other super funds.
While an SMSF can offer greater opportunities to take control of your retirement savings, there are some potential disadvantages you should also consider.
Higher costs for lower balances
SMSFs generally only become cost-effective if the fund has $200,000 or more invested. This is particularly true where you outsource and pay for most or all of the fund administration.
When you set up an SMSF, you and any other fund members will generally need to be trustees (or directors of the corporate trustee) and will be responsible for meeting a range of legal and other obligations.
*Source MLC/NAB Media