That is what it may feel for some of us over the next twelve months according to sources at UBS. With the amount of deleveraging (big word for not being able to refinance debt) in the markets overseas, it will obviously cause a lot of jitters globally. What it means to you and I is the markets are more volatile over the coming year.
What are you doing to counter this? Well it seems over four hundred thousand Australians have decided the managing their own future through self managed super funds (SMSF) is the way to go. This may in part come from the belief that if anyone is going to lose your money it may as well be you! Not an entirely unfair statement considering that SMSF’s outperformed the major funds by 3% last year.
It may be worth recalling exactly what the different super funds are available and quite simply you have three options:
1. Retail Funds/Master Trusts
These types of superannuation funds are owned by Banks and major fund managers. They have more investment options with less exposure to alternative assets. Alternative assets are direct property, infrastructure etc. The benefit of more choice is that the individual can tailor an investment strategy aimed at achieving their long term goals. Colonial First Choice as an example, has a choice of 106 options.
2. Industry Funds
These super funds are generally not for profit funds established for the benefit of the members. They have limited investment options. For example, AustSafe has 9 choices.
3. Self Managed Super Funds (SMSF)
As the title states these are super funds where the individual makes the investment decisions in line with government legislation. Generally the individual feels they have control and can achieve a better outcome than the so called professional.
What is best for me?
There are enough options to make Super and preparing for the future a confusing situation. However, more and more people are paying attention to this particularly due to the ups and downs we have experienced over the past eighteen months and the likelihood of more volatility to come.
The super fund that best suits you will depend on issues such as age, your acceptance or understanding of volatility, your investment strategy and also time to retirement. As with many things in life there is not a one size fits all option. We strongly suggest you review your current arrangements sooner rather than later as Super will affect many aspects of your financial future.
If you need help with superannuation or if you are thinking of setting up your own self managed super fund, speak to one of the financial planners at Intellichoice today on +61 7 3624 1900.
