Can’t say choosing your own portfolio is not a luring proposition, but can Super investors understand all the ramifications of such a position? I know, every now and then, we have this real urge to play the fund managers. Choosing our assets, diversifying as we deem fit, swapping properties for bonds and ETFs for global equities, but can all these not have dangerous consequences at times?
Are trustees informed enough?
Let me put things in perspective. Post the Global Financial Crisis and the steady emergence of the SMSF industry, we have been seeing many investors taking this method of DIY Superannuation investment right into their hands, and the flexibility on offer, one has to say, is really amazing. In many cases, investors still do use the services of professionals, but the feeling of overall control is unprecedented. But the crux question is: are the SMSF trustees ready and informed enough to make their own decisions? Can’t say they are adequately informed in all cases.
The emotional angle of DIY investment
First of all, the emotionality of a purely financial thing comes into the picture. Let us see how. These are retirement savings we are discussing and it is good to tamper with them for the sake of making them even bigger. This said, it is one thing to go through annual data and quite another thing to keep going through the minute-to-minute volatility sheets. Soon, before you know it, it will hit you emotionally and there are times you’d think, “Am I going to blow it all off and end up a pauper?”
While at it, it is important to delve on the subject of risk-benefit analysis. In the SMSF game where relatively high volatility shifts the dynamics of risks and benefits like quicksilver, are investors really ready to go the DIY Super investment way?
Have you faced any difficulty handling your own SMSF investments?