Information You won’t get from Unlicensed Accountants #49


Along with this raft of legislative change, the Australian Securities and Investments Commission (ASIC) has also introduced new licensing requirements for accountants who work with and advise Self Managed Superannuation Fund (SMSF) Trustees. Only approx. 10% of accountants have complied with these changes to date.


As such if you, as many, consider your accountant would be your 1st port of call for Financial Advice, they will likely advise you, they are unable to provide the information you require & should consult a qualified Financial Adviser / Planner.


This is general advice only and you should seek expert financial advice from a qualified financial adviser before acting on any of the information covered in these topics.


The Importance of Asset Allocation during 2020.


Many investors are overly influenced by short term market ‘noise’, as opposed to investment market fundamentals and their long-term financial goals. The patience and discipline required to create long term wealth is a bit like training for and completing a marathon. There will be uncomfortable moments along the way, as you would expect when competing in such an epic event, but the rewards are sweet.


Short term irrational decisions around your asset allocation are unlikely to be wise strategies in the long run. Once investors have established what their long-term goals are, they can concentrate on how they allocate their investment portfolios between cash, fixed income, property and shares. Vanguard research highlights the fact that asset allocation has the greatest impact on investment portfolio returns over the long term. Individual stock selection, speculation and market timing have a much smaller impact.


The importance of diversification and asset allocation was proven once again in 2020. Investors experienced extreme volatility in the share market. However, the bond market remained stable. Hence investment portfolios that had the appropriate allocation to bonds were cushioned by the most extreme volatility in the share market. When deciding on an appropriate asset allocation, specific investment goals, age and time frame will be amongst the more important factors considered. However, investors should develop an understanding around the fact that volatility and investment returns are inextricably linked. Your investment advisor is the best person to assist you with these concepts.

“You can have a master’s degree in making money, but you will still end up broke if you have a PhD in spending it” – Orrin Woodward.

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