self funded retirees

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Originally Posted by Greg Ward

I've just changed Super companies. Mine was showing 'super' returns......from their investments in their own investments or something... all secret. Over 15% a year for many years.... looked good...
Suddenly, someone realised that their valuations on their own 'investments' were slippery, to me it seemed to be fraudulent overstatement of returns to get noticed in the market, but of course I was just probably p'...ed off.

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I take it this was a super fund run by an investment company. If they were not providing you with regular reports detailing a. how your super was being invested and b. an accurate run down of returns on at least an annual basis then they're in breach of the law.

If you initiated the fund via a financial advisor then he/she will have been making a nice little income out of the trailing fees. If there is or was an FA involved then go and pay them a visit and start asking them questions. One question you should ask them is exactly what they are doing for you in return for the trailing fees theyre being paid.

What tends to irritate me is the advice you get from media pundits. Ride out the ups and downs in the market they say. The problem is that you can't choose to retire when funds are on the up and up and certainly can't guarantee the markets will drop just as they lower you into the grave.:D
Remember Pyramid. A few mates of mine certainly do.
cheers,
Jim

Nope... It was a big industry fund.
But they had as part of their 'investment' a large part of the fund in a 'target' portfolio of some investments ???? which were never really divulged.
Perhaps they may have been somewhere in their annual report?
But not in the information mailed to me each 6 months.
Glossy, but not informative.
I'm happy to be out as a matter of principal.
Greg

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Originally Posted by Greg Ward

Nope... It was a big industry fund.
But they had as part of their 'investment' a large part of the fund in a 'target' portfolio of some investments ???? which were never really divulged.
Perhaps they may have been somewhere in their annual report?
But not in the information mailed to me each 6 months.
Glossy, but not informative.
I'm happy to be out as a matter of principal.
Greg

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They are required to at least state the nature of the investments..ie stocks, property, bonds etc. Alot of the funds dont bother mailing you hard copies of annual returns any more but therell be an option to request same or have one emailed to you.

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Originally Posted by jimbur

What tends to irritate me is the advice you get from media pundits. Ride out the ups and downs in the market they say. The problem is that you can't choose to retire when funds are on the up and up and certainly can't guarantee the markets will drop just as they lower you into the grave.:D
Remember Pyramid. A few mates of mine certainly do.
cheers,
Jim

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Jim,

If youre close to retirement you should be considering moving at least some of your super into less volatile sectors such as fixed interest etc. I plan to do so when I get to my mid to late 50's.

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Originally Posted by Greg Ward

snip
I would have been better stocking up on VB.
I'm sticking to timber futures...

Regards
Greg

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Nah, I reckon hard metal, as in Lie Nielsen planes are a better option than timber futures.
You get to use them till you need to cash 'em in

A grey haired friend of mine has a saying "Unfortunately some experience has to be bought" Ouch Greg, I have a few war stories as well.

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Originally Posted by kiwigeo

If youre close to retirement you should be considering moving at least some of your super into less volatile sectors such as fixed interest etc. I plan to do so when I get to my mid to late 50's.

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The trouble with that plan is that the so called fixed interest sector got hammered pretty hard during the GFC as well. The prospect of Eurpoean soveriegn debt defaults means the banks that lent them money might fold as well. It was only hard money at bank interest that didn't disappear during the last GFC and the bank interest dropped to something very low. If you had fixed interest in some of the corporates it disappeared. If the banks had folded that money would have disappeared as well.

The stack of cards is pretty large. The debt position of California for instance is at least as bad as Greece. California occasionally has not been able to pay its public servants. The worst debt held by a country looks to be Japan, its debt ratio to GDP is double what Greece owes.

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Originally Posted by Fuzzie

The trouble with that plan is that the so called fixed interest sector got hammered pretty hard during the GFC as well. .

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I said fixed interest _etc_...ie all sectors that exhibit less volatility than the stock market. I also indicated at least some investments should be moved into such sectors..not all.


The choice is basically between market sectors with a potentially high return but high risk or sectors with a lower risk but lower returns. The time frame also needs to be considered...ie how long until retirement and how long do you expect to have to depend on your super to fund your retirement.

Just as a matter of interest my SMSF (60% shares, 20% property, 20% FI etc) took a drop during the GFC but fully recovered and is very much in the black.




Cheers Martin

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Originally Posted by kiwigeo

end on your super to fund your retirement.

Just as a matter of interest my SMSF (60% shares, 20% property, 20% FI etc) took a drop during the GFC but fully recovered and is very much in the black.

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This is true in general re the SMSF approach. But many who are still employed in some industry/ normal managed fund have much just stuck in shares and hence suffer worse.

Unless one can have or run a SMSF or SM Retirement Fund you are at the mercy of the fund managers. The split you have is not that easy with the normal funds.
I moved to a self managed fund simply as all i ever got for the FA was 'sit and wait' and watched the value slowly vanish. After moving to a SM system it improved and like you it was spread over a range with a level of stability.

Most super funds allow you to nominate the risk you want to invest in. You can usually change that by making a phone call.

Some of my friends changed to cash (fixed interest) in their super funds about Mar 2008 and changed back to higher risk (shares) in June 2009 - their super funds when forward all the time - they never lost anything.

Why did they do it - because i told them that it was going to get worse and any interest is better than a loss.

I am not thinking now is a good time to be shoving all your super into shares either - i think 6 months of Term Deposits (cash investment) wont cost you anything.

You should only invest at the risk you are comfortable with - if you are only comfortable with Govt guaranteed bank interest then don't stick it all in Shares - even if your Financial Advisor says so.

Cheers

David

I have been following this out of interest being a receiver of the disability pension but having once been a subscriber to a self funded pension scheme.

I have watched all these schemes grow with not one iota of Government regulation as to those people who spruke and conjole people into being in them the government included.
Economists and financial advisers make squillions even if the market fails the companies still make their profits corp execs their bonuses. They constantly announce the good things well into the future of what they can do.

Not one has ever stood up and said we are about to loose big time and therefore are misleading the public and withholding information if they can see ahead for benefits then with all their years of experience why not the times of hardship ahead.

They should be held accountable.

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Originally Posted by wheelinround

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Not one has ever stood up and said we are about to loose big time and therefore are misleading the public and withholding information if they can see ahead for benefits then with all their years of experience why not the times of hardship ahead.

They should be held accountable.

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One place of my employment (almost the last one) was convinced by Macquarie bank to move $1.1 Million from term deposit into a managed fund (Macquarie bank being the fund manager)

This was in August 2007 - by Feb 2008 they had turned the 1.1 Mill into $840,000 - not a batter of the eyelid, apology or anything they just said you have to ride out the lows.

I told them in Aug 2007, during their spiel on investment, that this was not a good time to move but was assured by the Macquarie people that shares were a solid investment then.

They should have been hung and quartered for their advice but as usual nothing happened.

What did the Auditor General say - what could he it was his advice in the first place that investments couldn't just be term deposits they had to be "as a prudent person" would invest.

extra - the "funny" bit was that another $800,000 would not be released early by the investor (was 12 months into a 24 month term) to add to the Macquarie account so it was still earning 8% during this time. - i left before it finished but think it was added to the Macquarie amount.

cheers

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Originally Posted by wheelinround

Economists and financial advisers make squillions even if the market fails the companies still make their profits corp execs their bonuses. They constantly announce the good things well into the future of what they can do.

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I have a relative who dealt in industrial law. He always said he loved boom and bust times but didn't make so much when things were chugging along nicely in the economy.:D
Cheers,
Jim

A while ago even the Queen asked "If all the Uni trained persons can spend so much time learning when we are to invest and tell us why can't they know when to withdraw our monies before the crashes"?

A wise woman that one.

Macquarie Bank its symbol stolen from the history of a Governor who wanted the best for people. Macquarie Bank's Moto is the name of that Logo's remains "The dump" which was tht which was punched out of the centre creating the hole which the economy falls through.

Sadly its Macbank's small investors who must be hurting most as usual.

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Originally Posted by Calm

I am not thinking now is a good time to be shoving all your super into shares either - i think 6 months of Term Deposits (cash investment) wont cost you anything.

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Interest rates are going up and the tip is we will have somewhere between 4-7 over the next 18 months. Unless Europe crashes and burns. That said there are a lot of oversold shares on the ASX at the moment. In the last big dip we picked up Comm Bank at $26.88 18 months later we doubled our money. There will be value buys as the market dips.

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Originally Posted by Calm

You should only invest at the risk you are comfortable with - if you are only comfortable with Govt guaranteed bank interest then don't stick it all in Shares - even if your Financial Advisor says so

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I completely agree. Just be aware that in your SMSF you will need to document your strategy. There is a lot of research available on different investments. It is not a black art.

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Economists and financial advisers make squillions even if the market fails the companies still make their profits corp execs their bonuses. They constantly announce the good things well into the future of what they can do.

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And the poor suckers who pay the most fees are those stuck in the retail funds. This is where the fees are the highest. Managing your SMSF requires you educate yourself in how the financial world works and the rules of the game are not always fair and transparent. If you pay someone to do it they will charge you. But markets go up and down. Its what they do. We have had an extended period of up, up, up. It was never going to last. Now its time for down, down, down and then cycle, cycle, cycle till some basic economic fundamental changes.

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Not one has ever stood up and said we are about to loose big time and therefore are misleading the public and withholding information if they can see ahead for benefits then with all their years of experience why not the times of hardship ahead.

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In fact they do. They just dont talk about it on the TV news. You need to get into other areas of the financial press and study economics. eg we are in an increasing interest rate phase. This offers opportunities in certain kinds of stocks, and hence some buying opportunities. The commodity boom is levelling as capacity worldwide is increased, this will affect other stocks. When you know what the next part of the cycle will be you will be able to look for the opportunities it presents.

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They should be held accountable

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If they have ripped you off. Otherwise the risk is yours. Its tough, I agree but that is the way it is. As the saying goes "If you cant run with the big dogs stay on the porch" Education is really the key.

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<table border="0" cellpadding="6" cellspacing="0" width="100%"> <tbody><tr> <td class="alt2" style="border: 1px inset;"> Not one has ever stood up and said we are about to loose big time and therefore are misleading the public and withholding information if they can see ahead for benefits then with all their years of experience why not the times of hardship ahead. </td> </tr> </tbody></table>
In fact they do. They just dont talk about it on the TV news. You need to get into other areas of the financial press and study economics. eg we are in an increasing interest rate phase. This offers opportunities in certain kinds of stocks, and hence some buying opportunities. The commodity boom is levelling as capacity worldwide is increased, this will affect other stocks. When you know what the next part of the cycle will be you will be able to look for the opportunities it presents.

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<table border="0" cellpadding="6" cellspacing="0" width="100%"> <tbody><tr> <td class="alt2" style="border: 1px inset;"> They should be held accountable </td> </tr> </tbody></table>
If they have ripped you off. Otherwise the risk is yours. Its tough, I agree but that is the way it is. As the saying goes "If you cant run with the big dogs stay on the porch" Education is really the key.

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Sorry Sab disagree these people are educated you pay them to manage your money, invest and move it with minimal risk (their words often) yet when it looses its your fault for not being educated enough. Crap thats what your paying them for other wise go bet on a horse at least you know its going to go crap at some stage during the day, but from its mess wonderful things grow not just the horses feed.

Has anybody considered the solution of a national superannuation scheme? It might be a bit too new an idea for Australia though, they were introduced in Europe only about 120 years ago. Pity that it would cost a lot, paying the dole for all those thousands of then unemployed middlemen. They would have to be re-employed as public servants.

Something I really do not understand: why are politicians fair game but one can not say here that some bureaucrats did not do their job properly?

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Originally Posted by wheelinround

Sorry Sab disagree these people are educated you pay them to manage your money, invest and move it with minimal risk (their words often) yet when it looses its your fault for not being educated enough. Crap thats what your paying them for other wise go bet on a horse at least you know its going to go crap at some stage during the day, but from its mess wonderful things grow not just the horses feed.

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"Every money investment can go crap at some stage", repeat, "EVERY MONEY INVESTMENT CAN GO CRAP AT SOME STAGE", etc, etc, etc ad nauseum. That is why you always sign a waiver, whether you know it or not you always sign a waiver. Look for words such as "past performance does not indicate future returns" or "independent advice is recommended for all investments" or suchlike. The cant be an iron clad "you will not lose your money" guarantee without a zero or negative rate of return. Investment involves risk. You bank account will make minimal interest because it is guaranteed by the Govt, but apart from that... stuff happens, thats life. Banks go broke too... thats life.

Advisors make mistakes. When you turn wood you know there is a risk of slipping and ruining the wood, your equipment or your flesh. Its a risk you take and you wouldnt dream of trying risky stuff without checking it out with someone who you knew to be a competent turner. The difference with money is that people do take on risks without understanding them. And the investment world is more like a shark pool than a woodturners club. Thats just how it is. So "Every money investment can go crap at some stage". "If you cant run with the big dogs, stay on the porch"

Other points to consider as to how all this has happened and why we can't go back to the good old days when everything was made at home are to do with life expectancy and world population.

In fact when were the good old days when everything was self contained? If you go back to the 1850's and the start of the industrial age the male life expectancy was something like 38 years of age, world population about 1300 million. By the 1950's the world population was starting to rocket up from 2500 million and life expectancy was 66. Today the population is around 6500 million and life expectancy around 75.

File:World-Population-1800-2100.png - Wikipedia, the free encyclopedia

Life Expectancy by Age, 1850–2004 — Infoplease.com

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Originally Posted by Sebastiaan56

"Every money investment can go crap at some stage", repeat, "EVERY MONEY INVESTMENT CAN GO CRAP AT SOME STAGE", etc, etc, etc ad nauseum. That is why you always sign a waiver, whether you know it or not you always sign a waiver. Look for words such as "past performance does not indicate future returns" or "independent advice is recommended for all investments" or suchlike. The cant be an iron clad "you will not lose your money" guarantee without a zero or negative rate of return. Investment involves risk. You bank account will make minimal interest because it is guaranteed by the Govt, but apart from that... stuff happens, thats life. Banks go broke too... thats life.

Advisors make mistakes. When you turn wood you know there is a risk of slipping and ruining the wood, your equipment or your flesh. Its a risk you take and you wouldnt dream of trying risky stuff without checking it out with someone who you knew to be a competent turner. The difference with money is that people do take on risks without understanding them. And the investment world is more like a shark pool than a woodturners club. Thats just how it is. So "Every money investment can go crap at some stage". "If you cant run with the big dogs, stay on the porch"

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Yep thats all so true and something my father taught me when I was about 7 years old.
Now if we have known and learnt the lessons well since the crash of the Great Depression would you agree and by reading what you have stated there should be less risk.
Well it doesn't happen because White Collar crooks don't get caught and we let them use such things as Waiver's be their get out of jail card.

As I said the people we hand our hard earned $$$ to are supposed to be the trained ones at what point do you not see they have to be held accountable, same as a mechanic who says your car is in tip top condition, you drive it away to find it has no breaks. Here we have laws to bring him to court. We see tradies being brought before the courts on lesser matters and fined, loss of licence etc.

So your saying all these people have to accept that bad things happen , its part of life get over it you chose that tradie.:roll:

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Originally Posted by Fuzzie

Other points to consider as to how all this has happened and why we can't go back to the good old days when everything was made at home are to do with life expectancy and world population.

In fact when were the good old days when everything was self contained? If you go back to the 1850's and the start of the industrial age the male life expectancy was something like 38 years of age, world population about 1300 million. By the 1950's the world population was starting to rocket up from 2500 million and life expectancy was 66. Today the population is around 6500 million and life expectancy around 75.

File:World-Population-1800-2100.png - Wikipedia, the free encyclopedia

Life Expectancy by Age, 1850–2004 — Infoplease.com

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WoW and on top of that we have more Politicians we have to keep and more government employee's who retire at younger ages on full pensions which are paid for by consumers which use the companies such as Telstra where the government invest to help pay for these pensions who might just go down the gurgler.

:rolleyes: Hum Paul Keating Bob Hawk mid to late 1980's crash, high interest, loss of many people pensions.:roll: The big move to bring in mandatory self funded pensions. Government pensions were cut back as to many were sitting back enjoying a weeks wage for doing nothing.

'Rant on'
Well at the end of the day 'the people' deserve the Govt they get.This concept of changing Govt cos they have been in too long needs to be looked at. We should only change if they are stuffing up.

But the problem is more fundamental than that. We in the western world have been choosing our leaders for at least the last 150years by a criteria that has got us where we are today.

There was a time when we chose leaders by their integrity and content of character. But we moved away from this to using Charisma as a yard stick. They have foisted upon us the locked down two party system.That prevents good men, if they have any, from doing whats right at the time and what best for the country.
'rant off'