Name: Penny Pryor
Age: 43
Other members of the SMSF: None
How long have you had your SMSF?
I don’t have one yet but I’m seriously considering establishing one in the next 12 months now my balance is approaching the level that many say is cost effective.
Why would you start it up?
Having written about them for so long, I hope I have an understanding of how the industry works and a working knowledge of investment markets and factors such as diversification. I also think the practical knowledge that having my own SMSF would give me would be invaluable in further understanding this sector.
How big is it?
I would set one up at $200,000.
Do you think it will be difficult to manage?
I believe it will be time consuming but quite possibly not as onerous as I anticipate.
Do you think you will enjoy managing it?
I think I would enjoy managing it, and that’s part of the reason I would do it. If anything, it would force an even more constant diligence of investment markets (obviously something I do at the moment).
What about performance?
If I could keep costs down, I believe I could probably do slightly better than where it is now, in a well-performing industry fund.
What is your asset allocation?
I would have a reasonably conservative asset allocation, with the majority in 20 stocks that were allocated across the sectors in line with their respective asset allocations in the ASX 200. I still have a while to retirement, so I would also have an additional four or five small cap stocks. And I do think it’s important to have international exposure – however I would probably do this through one of the international ETFs listed on the ASX, as it is still pretty expensive to buy international shares and I’m not sure I’ve got the time to manage currency risk.
I’ve got an investment property so I would consider an unlisted property trust if I could find one that had a small enough minimum investment (probably unlikely), so I might invest in a listed real estate trust for property exposure.
What are your favourite investments/stocks and why?
I like companies that are exposed to demographic trends such as ageing like Ingenia [1] and first movers like companies making 3D printers. I was fascinated to read about Stratasys [2] earlier this year.
NEXTDC [3] is also a company that is making inroads into new technology.
What are your least favourite investment stocks and why?
It’s not completely rational but there are a lot of the big bluechips I don’t like, like Qantas and Telstra. As Paul Rickard said on Monday [4], just because something is a national icon doesn’t make it a good investment, although I would be silly to exclude Telstra due to its superior yield. As a company I also believe the telco has made massive improvements over the past five years.
What investments do you have outside of superannuation?
An investment property.
Do you use an advisor or any kind of service provider?
I would use an administration platform and possibly a low-touch financial advice service if it didn’t eat too much into the costs of running the fund.
Important: 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. Consider the appropriateness of the information in regards to your circumstances.
Also in the Switzer Super Report:
- Charlie Aitken: Picks for 2014 part 1 – rotate into cylicals [5]
- Ron Bewley: Big miners BHP, Fortescue pay off for investors [6]
- Penny Pryor: Buy, Sell, Hold – what the brokers say [7]
- Tony Negline: What deeming changes will mean for your pension [8]
- Questions of the week: Property options and what to do with Telstra [9]