Question: Monadelphous was a stellar stock for so long but now is in the doldrums. What do you think of its potential, long term, in a, SMSF?
Answer (By Paul Rickard): I am not sure that Monadelphous would be a integral stock in my SMSF portfolio. The performance was stellar and management has a pretty strong reputation, although it was largely earned in a booming resources market. It is now under pressure, as construction activity wanes and margins fall.
It is clearly out of favour with the brokers, who have a consensus target price of $15.95, and sentiment of -0.5 (-1.0 most negative, +1.0 most positive).
I think you are going to need to be patient holding this stock. Market expectation is that there is more bad news to come (and of course, it is priced for this).
Question 2: Good article on estate planning Tony. Thank you. For me the issue is that I am the only member in a fund that has my son and myself as individual trustees. I have a Death Benefit Agreement in place. What does my son need to do should I ‘move on’?
Answer 2 (By Tony Negline): This will depend on who the death benefit is payable to, and if the binding nomination is valid according to your trust deed.
If your son is happy to pay the death benefit to the nominated beneficiaries, then the process should happen pretty smoothly. However, if he wants to ignore your wishes and pay it out some other way, then litigation might follow.
I suggest a frank and open discussion with your son and to check your fund’s trust deed.
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:
- Margaret Lomas –Â My SMSF – Property guru Margaret Lomas
- Penny Pryor –Â ASIC promises equal scrutiny
- Charlie Aitken –Â Australian banks still on hold
- Staff Reporter –Â Buy, Sell, Hold – what the brokers say
- Ron Bewley –Â What not to buy
- Tony Negline –Â Changes to superannuation assessment and you
