Most DIY super investors are in stocks for the long-term, so we have the benefit of using history to help us determine a proven investment strategy.
When it comes to investing, especially in a self-managed super fund (SMSF), you need to have an investment strategy you can stick to. For me that meant that across 2008 and 2009 I stuck to my strategy of buying great quality companies that paid dividends, which meant that I dollar-cost averaged the holding price of many of my stocks; this is exactly what will do going forward.
I know there will be some dud days, weeks and months, but history is on my side.
Historical trends
History shows that seven out of every 10 years are good for stocks and we are now giving history a nudge as we move into the fourth year since the global financial crisis (GFC) started in October 2007. Of course, the 2009/10 and 2010/11 financial years have seen shares actually rise between 5-6%, and when you add in dividends, a good portfolio with a bias towards income would have returned 10-12%.
Another fun fact: Vanguard has shown that if you invested $10,000 in shares in 1975 and let it roll over, reinvesting the dividends, by 2009 the value of your investment would have been around $453,000!
There are more reasons why history shows that stocks provide solid returns over the long term and I and a host of other experts, talk about those, plus other super investment strategies, every week in the Switzer Super Report, Australia’s leading investment newsletter for DIY super trustees.
If you’re interested in receiving the latest investment advice for your super fund, sign up for a no obligation 21-day free trial of the Switzer Super Report.
The Switzer Super Report will be emailed to you twice a week and will:
- Tell you which shares to buy, hold or sell.
- Find you the best fixed interest rates.
- Update you on ATO rulings and what they mean for your fund.
- Road test products for your SMSF.
- Analyse alternative investments – from artwork to property.
- Guide you through strategies to use in your SMSF.
- Provide advice on share buybacks and other corporate actions.
- Help you maximise your SMSF’s after tax investment returns.
- Answer your questions in Ask & Tell.
Important information:Â This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Anyone should, before acting, consider the appropriateness of the information in regards to their objectives, financial situation and needs and, if necessary, seek professional advice.
