Superannuation 'investment strategies'

GoldenEye said:
mmm....shiney! said:
GoldenEye said:
So what form of cash are people using? My SMSF auditor has frowned on the idea of a SDB full of $100 bills. :(
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Probably because it doesn't "work" for you. It's just sitting there depreciating.
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Nope, I'm allowed to have poorly performing investments and even lose money. They also don't like gold or silver coins, but allow gold and silver bars, and paper PMs such as unallocated.
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They can't stop you having gold or silver coins, you just have to have the requisite insurance to be compliant because they are deemed to be "collectables".
There is also AFAIK no way they can legally stop a SMSF from keeping cash in a SDB. But even if you minuted it properly it would raise a red flag and you'd get the rubber glove treatment.
 
So far, the switch hasn't worked out very well, though only marginally. In the week since I switched, my previous fund has grown a touch, while my new fund has shrunk a little. Not enough to be a drama, but if the sharemarket takes a big tumble at some point and my new fund doesn't hold up, I'll be miffed. I wouldn't necessarily think I'd done the wrong thing, because this is all about security rather than growth, but I'll be cross if I still see falls on poor sharemarket days but don't see gains when things are going good.
 
Elemental said:
It would also depend on if it complies with the investment strategy and I doubt it would - as I assume the strategy doesn't say "I wish to achieve returns of 0% on my investments".
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It's a self managed super fund for a reason, so you get to decide how to invest the money. If your strategy is 100% cash or 100% gold then you simply document that and the reasons you think why. It could be as batshit crazy a reason as you like. You could harp on for 100 pages about the Illuminati, market manipulation, hollow earth aliens invading etc. No one gets to judge your reasons, as long as you document them then you are compliant.
 
SteveS said:
I wonder if super schemes actually have to keep the required amount of cash on deposit, equivalent to members' cash in super?
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I doubt it. If they use a bank to store it then the bank doesn't hold the actual cash due to fractional reserve lending.
I can't imagine super funds being any different.
 
When you switch your super plan from higher risk to lower risk isn't there a penalty as they fund has to sell you out of the riskier investments and buy you into lower risk items?
 
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