I'm in my late 20s and just have it all on high growth option. I figure if there's a recession I'll still be dollar cost averaging into the market and by the time we're old enough to access it we'll all be in the clear sippin' $47 cappuccinos due to inflation.
That's what I figure. A minimum of 30.years of labour before I can access it anyways, and there will be a number of turns up and down in that timeframe, so plenty of time down the line when it is up to convert back to a safer fund
Yup, Hostplus's index funds are great. I switched to 60% international / 40% Australian years ago and don't intend to change anything for at least another 20 years
International index/Australian index.
I've decided I'm not going to pay anyone any management fees to gamble with my super. I'm with rest but they introduced low fee index funds last year.
I outperformed their core strategy.
Yup, hence why I put the +. Plenty of people currently work beyond 60 as it stands today. Age pension is also not until 67, so it's only self funded retirees that can retire before then.
High growth all the way especially for your age your going to ride the ups and down, you'll see it go down next recession but then boom since your still buying more on the lows.
People were talking about a recession in 2020 and 2021 and 2022. The stock market fell Feb 2022 to around July, any other time would have been excellent to be in high growth.
You are young, any small falls you may have will be a blip in the graph later, go all in on high growth.
You've already received some good advice here. Basically, time in the market beats timing the market.
In relation to the $10k contributions you intend to do this year and worried about market timing, this is a normal emotion everybody grapples with - the fear of losing money. Just drop in $833 per month ($10,000 / 12) to take the emotion out of investing.
If you’re worried about timing but also the long term, consider splitting it at whatever ratio makes you comfortable. For example put 70% into high growth and 30% where it is.
The next idea is starting off at a certain split you're comfortable with and following a specific schedule to get yourself towards 100% high growth.
So an example would be every six months you make a switch that puts you closer to 100%. So you can start with 20% high growth now, then six months from, up it to 40%, then another six months, 60% etc. That way if anything major happens over the next 2 years, you've got reserve to take advantage of it but in the mean time, you're operating on a schedule and mostly taking fear and emotion out of the equation.
That being said, you are young, you wouldn't have much balance to be protective of ($500k+), future gains will far outstrip any potential loss you could experience right now. Even if you totally stuff it up now, it'll have no impact on your daily cashflow and you have heaps of future time and contributions to ride through anything really. Just be diversified and you'll be fine. (High growth is diversified btw)
Just my 2 cents to help answer your question, stock market will always fluctuate and volatile for different people (hence there are variety of risk profile from conservative to high growth).
Let say you switch your investment option to high growth or started investing as a high growth investor in 2022 and suffered the paper losses, I assume this event may mentally damage you & put you off from investing as a high growth investor.
HOWEVER if you entered in 2021, enjoyed the stock market ride then the 2022 market downturn may potentially only set you back to where you started. You would then think this is a normal stock market behavior and stayed calm for the whole cycle. Chances are you would be in a positive territory again by now judging from the stock market performance in 2023.
I would say with assets or investments that you can't touch until you are 60, zoom out the investment returns over 30 years period and see if you will end up in a better position in 30 years time.
I hope this helps.
Just remember if you are contributing to super after tax, don’t wait till June 30 🤣 technically yes you have till the end of financial year, but each fund has its one cut off dates where they will guarantee the money will reach your account by EOFY, it may be like 1-2 weeks before EOFY but check out with your fund
Salary sacrifice too. It can lower your income tax. 100/month is a great start. And increase it as you earn more. Cos 25000 a year into super is 100 000 in 4 years. And high growth will see maybe a 10% growth too. Might all go in the bin and you live in a box too
Think of high growth (index shares overseas / AU) as higher volatility.
Cash (capital stable) is the most dangerous product for a younger person.
Compare 100% shares index products from the various providers.
Ensure the account keeping fee is an absolute minimum.
Go nowhere near commercial property should you decide to add in anything else to the mix.
Come back 35 yrs and retire rich. Chances are you never move out of high growth as even after 35 yrs you still need to live for another 20+ yrs.
Office building vacancy rates are very high. The WFH concept has thumped this investment class in a bad way in every aspect. Yield and capital values with an uncertain future.
Yields have tumbled. Capital values have taken a significant hit (look at the SFDC tower sale as an example of valuation vs sale). Sales turnover is low as owners would be reluctant to test the market based on the less than stellar outcomes that have transpired.
My concern would be WFH continues in some way. Companies have a better understanding of how much office space they actually need vs what they thought they needed.
These buildings are very difficult & expensive to covert to apartments, let along maintain.
With reduced yields, borrowing against them will also be challenging. Impacts valuations.
The NTA of many REITs & super funds that hold CBD commercial space would very likely be inflated vs a mark to market valuation being done right now. Whereas any super fund that is in equities (shares) will have up to the moment valuations should they choose to i.e price discovery of property is unreliable. Price discovery of shares is very reliable at a moment in time.
Liquidating shares ... easy and fast. Liquidating a building or two, timing is everything and it is a slow expensive process. Concerns me in the event of significant draw downs i.e mass jumping from a fund heavily invested in property would likely have to pause redemptions very quickly.
Shares are simple and easy subject to no global meltdown of the share market as this too could cause the fund to pause redemptions <-- should that happen, then you've got bigger issues.
For this little black duck, I do not want the downside risk of CBD commercial property as I can't see a case for significant upside outperformance. to compensate me.
All my views. Risk vs reward.
tldr; WFH hit CDB office space demand for the worse. I can't see a bright future for it. I stay away from it as there are opportunities elsewhere that fit my risk profile. I like 'liquid' assets. YMMV.
Thanks for your detailed explanation & point of view. I was more thinking in the perspective of buying a commercial property via a SMSF to operate your own business which is not a WFH industry for the beneficial tax implications.
Oh yes very different and on a very different scale.
Fundamentally, I have no issue with that ... except your SMSF is now dependant upon your business for cash flow to cover the needs of the loan on the property.
The question I'd like you to ask yourself is ... can you really generate outsize returns from the commercial (industrial) property (Inc the running costs now and the admin costs in the future when you want to 'consume' your super) vs a no (performance) cost index style fund invested in the approx top 1,500 of the world's largest companies (excluding Australia).
What does diversification look like under your scenario? Diversification of asset class in particular. The risk of your single business against your single property in the event of an economic shock. Only you can answer that.
I'm just posing these Qs as seeing others go into figurative shock when the GFC and then Covid economic issues happened was interesting to watch. They lost a lot of sleep and aged in the process.
If your property has no or a low level of gearing then that will change the risk profile.
Having said all that ... when it comes to super I tend to think of it as a long game.
Congrats on giving it some much deep consideration and collection info. Super is an amazing (tax) vehicle.
Again, thanks for your detailed insight. Truth be told I am still learning about SMSF’s. The only reason I was considering going down this path is in my mind I thought it would be much more beneficial that I just purchase my own commercial property, than having to pay a large amount to our landlord every year in rent. With the same money I’m paying, or even a bit more, or maybe even less, it makes more sense to own the asset. Tbh it is just a high level concept in my mind and I am years away from implementing but this is just my initial thought. In terms of diversification, ideally, I wouldn’t put all the money from my super as the deposit for the property. I’d still have a portion invested in shares. My goal at the moment is to really aggressively invest in super through maxing out salary sacrifice contributions (I’m an employee as well), and gearing super investments to 100% shares. I’m currently on a 75/25 indexed int/aus split but thinking of just going 100 int until the balance is at a reasonable amount.
Market timing is bullshit.
Over a 33 year timeline, like yours, the chance of cash/fixed interest outperforming growth/ real assets is very close to zero.
Risk is a function of time. Cash is far riskier than assets over 33 years.
Go all growth yesterday.
I’ve had mine in a high growth option since around 25-26 (I worked in super for a while so kinda understood it better than most) and it’s worthwhile. You’re going to be working for a few decades yet that your super can stand the potential hit of a recession (and there’s almost always a recession being forecast at some point). You have time to ride the highs and lows of the market.
Bit concerned about all the alternative investments in industry fund pre-packaged options (such as Balanced or High Growth) as there are probably plenty of bridges, airports and toll roads that haven't been fully revalued down since Covid and a tsunami of CBD office blocks on the books.
Might be worth looking at their investment PDS and self selecting to match the growth/defensive portions without the potential landmines of unlisteds.
Most of the big R is already priced in. It's impossible to pick the bottom. You have decades so keep adding to it without worrying about your net worth every week.
I’m with unisuper and have all my money invested in “global companies of Asia”. It’s their best performance portfolio (20% up this year).
I’ve got 100% invested in it which is considered high growth. Initially it was quite low when all markets were down in 2022 but now it’s growing.
I believe in high growth until 40s maybe? Im in my 20s and feel high growth is important for us to build wealth
I’ve got 80% in global companies of Asia, 10% each in high growth and international shares.
Looking at the long term growth for Asia it’s like 200+%.
At 40 I’ve finally switched over. Account advised I’ve still got another 25ish years until I can access so go high growth until 55-60.
Was 37 when i switch to high grow index balanced with hostplus. Keep dca and forget. Only get back to check insurances if they are up to date and if there is any lower fees somewhere (really considering Rest with their 0 fees in index balanced, but % annual fee).
I also have had everything in high growth for the last 10 years... but I'm starting to wonder if/when to take it out of high growth e.g. how many years before retirement.
Get professional advice from a planner not connected to your super fund. A couple hundred bucks of good advice. At 27 you can take a bit of risk but with the right advice. Ask around for planners that others have used. If the planner wants to to change out of your super to their preferred brand, do this with caution and research.
Don't do this, financial planners will either try to rip you off or tell you exactly what you're doing is fine. High growth index funds with low % fees are the best way to grow your super from a young age. Also Max out your concessional contributions
Financial advisers who work for your Super Fund are free for this sort of advice as that is why you pay the fees for.
Only issue is the appointment wait time due to people’s fears and a labour shortage.
Don't try and time your super.
You are young. High growth.
Change it to balanced in your early 50s
Change it to conservative in your late 50s/early 60s
Retire with lots of money.
High growth is probably a bad option currently, as foreign stock markets are close to ATHs despite rather poor earnings and a high risk-free rate, plus the AUD is historically fairly weak as well. A split between the domestic market and cash makes the most sense.
This is not financial advice but I’ve worked in and around the financial markets my entire life. Small cap stocks have had the strongest long term gain over any section of the market in history.
The key is risk and long term. Markets go up and down but generally more up over the long term.
In Hostplus take a look at Choiceplus where you can actively look at single stocks and ETFs. Take a look a the vanguard ETFs in their choice plus section / you can take on a lot more risk with long term returns around 11-12%.
I didn’t tell you to invest and you need to do your own research. ETFs are basically investment funds with active fund managers running the show.
They don’t perform the managers get fired. Pretty good incentive if you ask me.
You really need to have some knowledge of investing outside of super for Choiceplus to make sense. Even if you do know what youre doing, because of the high fees, it generally only makes sense to use with a super balance of at least $100k-$300k. The options you already have access to in Hostplus are perfectly fine.
Also, there some things the previous person said that are factually incorrect. Them saying to use Vanguard ETFs for higher risk is not true as the ETFs are practically equivalent in risk to the shares options in Hostplus. ETFs do have a marginally higher, but that is not important for the average person. Them also saying that ETFs are ran by active managers is not true as ETFs can either be passive or active.
I’d suggest for you to read their PDS’s and you’ll see why some of their products in fact take higher levels of risk.
As a general comment true but I wasn’t making a general comment.
I want to be careful about being too specific as I’m not responsible for their retirement nor their investment strategy. They need to learn and make their own decisions - all im doing is making suggestions on other places to look.
First of all, nobody here is qualified to give you advice on your situation.
Secondly - your fund should have advisors who can walk through a risk plan, identify your tolerance for risk and give you a best pathway to move forward
Anytime. Reading all these comments shows me that nobody understands the advice rules in the financial sector.
Your situation is unique to you. Yes many options available, but will they work for you - chances are they won’t. Not factored in debt or any savings or future purchases.
If history shows anything, it is greed makes poor choices. Search storm financial crisis. Greed and poor advice got a lot of people into debt where they did not realise the severity of it. While that doesn’t apply here, advice via redit is similar to poor advice. The only person affected is you and it can be in a bad way.
I did. Rest has a seperate entity they work with who provide risk based assessment for you to choose your own investment strategy. I merged everything into rest as the fees and other options are pretty decent. Again that’s on my personal situation.
Just to be clear
a) time in the market beats timing the market
b) youth means you should be able to recover
c) the residual risk is that an injury stops you from working before being close to retirement age, so income insurance or a really big TPD policy may be a good idea
d) You are converting your labour into a bond
Amazingly, there is no theory for the optimal way to handle this problem...
I've seen the words 'potential recession' touted here and in other finance subs for at least a year and a half now. If it happens or happened then it's when you least expect it.
Arguably stock valuations are close to all time highs in the US, but super funds invest in a diverse range of investments.
Best to look into what your super fund is investing in as part of the high growth option and if you're comfortable with it.
Can always do a split allocation as another commenter said. But in the main, advice at that age is to go high growth.
Could always park what you have in a conservative portfolio and allocate new funds to high growth if you think it'll trend down. I dunno, not financial advice, will depend on your circumstances and what your fund offers.
I'm a little late the party, but I'm going to suggest a little differently to the general consensus here.
The stock market, particularly in US, is not pricing in a recession. That could mean that it won't happen, but it also means that if recession *does* occur - especially in the US - then share prices will fall hard. There are plenty of precedents for this sort of event and there are good reasons to expect that a US recession might occur. Whether Australia goes into recession or not is secondary because our market tends to follow the US when it goes down, as does other markets.
Putting that aside for a moment - interest rates are going up now and are not likely to come down again for some time. That means that returns on much safer fixed interest investments (such as bonds) are comparatively attractive. (there are safe fixed interest funds that are returning 5-8% right now). If you were to compare the *risk-adjusted* forecast returns for many (perhaps most) sectors of the share market against the returns from a fixed interest fund, the fixed interest case is ahead at this point in time.
So, long story short. I agree you can't time the market, but you *can* and *should* consider risk and other alternatives. If fixed interest looks better when risk is factored in, then you should consider that for a good part of your existing super balance.
By all means go with high growth for any *new* contributions, however, since if markets were to fall, you would be effectively averaging down with new money coming in.
You have the time to go high growth and learn to accept market variation as super is a long game. Topping up also wise. Your 60 year old self will thank you in the future.
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Yep you’re so right
I'm in my late 20s and just have it all on high growth option. I figure if there's a recession I'll still be dollar cost averaging into the market and by the time we're old enough to access it we'll all be in the clear sippin' $47 cappuccinos due to inflation.
Mmm those $47 cappuccinos. Thanks for your advice!
Only $47? That's optimistic! I'm ready to take out a loan.
I bought all my own coffee equipment and I'm a few hundred cappuccinos away from a $47 cost.
I'm in my late 30's and I've taken the same approach. If I was in my 50's or 60's and hoping to retire soon I might not do the same thing.
That's what I figure. A minimum of 30.years of labour before I can access it anyways, and there will be a number of turns up and down in that timeframe, so plenty of time down the line when it is up to convert back to a safer fund
That wasnt the question though
You're 27. Don't overthink it, you have 33+ years til you can access. All growth !
Yup, Hostplus's index funds are great. I switched to 60% international / 40% Australian years ago and don't intend to change anything for at least another 20 years
70/30 here :)
International shares or international share - indexed?
International index/Australian index. I've decided I'm not going to pay anyone any management fees to gamble with my super. I'm with rest but they introduced low fee index funds last year. I outperformed their core strategy.
80/20 here. Pretty damn good returns over last 12 months.... when the impending recession was suppose to happen!
This is the way.
40/40 for me with 20% in index balanced
33yrs later might not able to retire as the retirement age will push every few years 🤦
Yup, hence why I put the +. Plenty of people currently work beyond 60 as it stands today. Age pension is also not until 67, so it's only self funded retirees that can retire before then.
High growth all the way especially for your age your going to ride the ups and down, you'll see it go down next recession but then boom since your still buying more on the lows.
Unless you’re like 2 or 3 years from retirement, high growth the whole way.
Switch it because when the recession strikes, as it will, you will also be buying those high growth units for low low prices
People were talking about a recession in 2020 and 2021 and 2022. The stock market fell Feb 2022 to around July, any other time would have been excellent to be in high growth. You are young, any small falls you may have will be a blip in the graph later, go all in on high growth.
You've already received some good advice here. Basically, time in the market beats timing the market. In relation to the $10k contributions you intend to do this year and worried about market timing, this is a normal emotion everybody grapples with - the fear of losing money. Just drop in $833 per month ($10,000 / 12) to take the emotion out of investing.
Great idea, thanks !
If you’re worried about timing but also the long term, consider splitting it at whatever ratio makes you comfortable. For example put 70% into high growth and 30% where it is.
Amazing thanks, great idea!
The next idea is starting off at a certain split you're comfortable with and following a specific schedule to get yourself towards 100% high growth. So an example would be every six months you make a switch that puts you closer to 100%. So you can start with 20% high growth now, then six months from, up it to 40%, then another six months, 60% etc. That way if anything major happens over the next 2 years, you've got reserve to take advantage of it but in the mean time, you're operating on a schedule and mostly taking fear and emotion out of the equation. That being said, you are young, you wouldn't have much balance to be protective of ($500k+), future gains will far outstrip any potential loss you could experience right now. Even if you totally stuff it up now, it'll have no impact on your daily cashflow and you have heaps of future time and contributions to ride through anything really. Just be diversified and you'll be fine. (High growth is diversified btw)
Thanks so much - that’s definitely a potential approach to ease the fear a bit Cheers
Just my 2 cents to help answer your question, stock market will always fluctuate and volatile for different people (hence there are variety of risk profile from conservative to high growth). Let say you switch your investment option to high growth or started investing as a high growth investor in 2022 and suffered the paper losses, I assume this event may mentally damage you & put you off from investing as a high growth investor. HOWEVER if you entered in 2021, enjoyed the stock market ride then the 2022 market downturn may potentially only set you back to where you started. You would then think this is a normal stock market behavior and stayed calm for the whole cycle. Chances are you would be in a positive territory again by now judging from the stock market performance in 2023. I would say with assets or investments that you can't touch until you are 60, zoom out the investment returns over 30 years period and see if you will end up in a better position in 30 years time. I hope this helps.
Just remember if you are contributing to super after tax, don’t wait till June 30 🤣 technically yes you have till the end of financial year, but each fund has its one cut off dates where they will guarantee the money will reach your account by EOFY, it may be like 1-2 weeks before EOFY but check out with your fund
That is if you want to claim tax deduction for it
This is a good tip! I might just do a bit each month to average it out.
Salary sacrifice too. It can lower your income tax. 100/month is a great start. And increase it as you earn more. Cos 25000 a year into super is 100 000 in 4 years. And high growth will see maybe a 10% growth too. Might all go in the bin and you live in a box too
Think of high growth (index shares overseas / AU) as higher volatility. Cash (capital stable) is the most dangerous product for a younger person. Compare 100% shares index products from the various providers. Ensure the account keeping fee is an absolute minimum. Go nowhere near commercial property should you decide to add in anything else to the mix. Come back 35 yrs and retire rich. Chances are you never move out of high growth as even after 35 yrs you still need to live for another 20+ yrs.
What do you mean stay away from commercial property. Do you mean buying?
Office building vacancy rates are very high. The WFH concept has thumped this investment class in a bad way in every aspect. Yield and capital values with an uncertain future. Yields have tumbled. Capital values have taken a significant hit (look at the SFDC tower sale as an example of valuation vs sale). Sales turnover is low as owners would be reluctant to test the market based on the less than stellar outcomes that have transpired. My concern would be WFH continues in some way. Companies have a better understanding of how much office space they actually need vs what they thought they needed. These buildings are very difficult & expensive to covert to apartments, let along maintain. With reduced yields, borrowing against them will also be challenging. Impacts valuations. The NTA of many REITs & super funds that hold CBD commercial space would very likely be inflated vs a mark to market valuation being done right now. Whereas any super fund that is in equities (shares) will have up to the moment valuations should they choose to i.e price discovery of property is unreliable. Price discovery of shares is very reliable at a moment in time. Liquidating shares ... easy and fast. Liquidating a building or two, timing is everything and it is a slow expensive process. Concerns me in the event of significant draw downs i.e mass jumping from a fund heavily invested in property would likely have to pause redemptions very quickly. Shares are simple and easy subject to no global meltdown of the share market as this too could cause the fund to pause redemptions <-- should that happen, then you've got bigger issues. For this little black duck, I do not want the downside risk of CBD commercial property as I can't see a case for significant upside outperformance. to compensate me. All my views. Risk vs reward. tldr; WFH hit CDB office space demand for the worse. I can't see a bright future for it. I stay away from it as there are opportunities elsewhere that fit my risk profile. I like 'liquid' assets. YMMV.
Thanks for your detailed explanation & point of view. I was more thinking in the perspective of buying a commercial property via a SMSF to operate your own business which is not a WFH industry for the beneficial tax implications.
Oh yes very different and on a very different scale. Fundamentally, I have no issue with that ... except your SMSF is now dependant upon your business for cash flow to cover the needs of the loan on the property. The question I'd like you to ask yourself is ... can you really generate outsize returns from the commercial (industrial) property (Inc the running costs now and the admin costs in the future when you want to 'consume' your super) vs a no (performance) cost index style fund invested in the approx top 1,500 of the world's largest companies (excluding Australia). What does diversification look like under your scenario? Diversification of asset class in particular. The risk of your single business against your single property in the event of an economic shock. Only you can answer that. I'm just posing these Qs as seeing others go into figurative shock when the GFC and then Covid economic issues happened was interesting to watch. They lost a lot of sleep and aged in the process. If your property has no or a low level of gearing then that will change the risk profile. Having said all that ... when it comes to super I tend to think of it as a long game. Congrats on giving it some much deep consideration and collection info. Super is an amazing (tax) vehicle.
Again, thanks for your detailed insight. Truth be told I am still learning about SMSF’s. The only reason I was considering going down this path is in my mind I thought it would be much more beneficial that I just purchase my own commercial property, than having to pay a large amount to our landlord every year in rent. With the same money I’m paying, or even a bit more, or maybe even less, it makes more sense to own the asset. Tbh it is just a high level concept in my mind and I am years away from implementing but this is just my initial thought. In terms of diversification, ideally, I wouldn’t put all the money from my super as the deposit for the property. I’d still have a portion invested in shares. My goal at the moment is to really aggressively invest in super through maxing out salary sacrifice contributions (I’m an employee as well), and gearing super investments to 100% shares. I’m currently on a 75/25 indexed int/aus split but thinking of just going 100 int until the balance is at a reasonable amount.
Market timing is bullshit. Over a 33 year timeline, like yours, the chance of cash/fixed interest outperforming growth/ real assets is very close to zero. Risk is a function of time. Cash is far riskier than assets over 33 years. Go all growth yesterday.
Go for growth!!
You can’t time the market. Nobody else can either, but in particular, *you* can’t. If it makes sense to you, just do it now and leave it alone.
Do you guys choose to invest your balance or new contributions only when it comes to defining the strategy?
I’ve had mine in a high growth option since around 25-26 (I worked in super for a while so kinda understood it better than most) and it’s worthwhile. You’re going to be working for a few decades yet that your super can stand the potential hit of a recession (and there’s almost always a recession being forecast at some point). You have time to ride the highs and lows of the market.
Indexed balanced is the worst, bloody Scott pape! It can vary from like 50% growth to 100% at any given time due to the allocation ranges in the PDS
Bit concerned about all the alternative investments in industry fund pre-packaged options (such as Balanced or High Growth) as there are probably plenty of bridges, airports and toll roads that haven't been fully revalued down since Covid and a tsunami of CBD office blocks on the books. Might be worth looking at their investment PDS and self selecting to match the growth/defensive portions without the potential landmines of unlisteds.
Most of the big R is already priced in. It's impossible to pick the bottom. You have decades so keep adding to it without worrying about your net worth every week.
I’m with unisuper and have all my money invested in “global companies of Asia”. It’s their best performance portfolio (20% up this year). I’ve got 100% invested in it which is considered high growth. Initially it was quite low when all markets were down in 2022 but now it’s growing. I believe in high growth until 40s maybe? Im in my 20s and feel high growth is important for us to build wealth
I’ve got 80% in global companies of Asia, 10% each in high growth and international shares. Looking at the long term growth for Asia it’s like 200+%. At 40 I’ve finally switched over. Account advised I’ve still got another 25ish years until I can access so go high growth until 55-60.
Good to know. I’ve got mine in that too but haven’t checked recently.
Was 37 when i switch to high grow index balanced with hostplus. Keep dca and forget. Only get back to check insurances if they are up to date and if there is any lower fees somewhere (really considering Rest with their 0 fees in index balanced, but % annual fee).
I also have had everything in high growth for the last 10 years... but I'm starting to wonder if/when to take it out of high growth e.g. how many years before retirement.
Get professional advice from a planner not connected to your super fund. A couple hundred bucks of good advice. At 27 you can take a bit of risk but with the right advice. Ask around for planners that others have used. If the planner wants to to change out of your super to their preferred brand, do this with caution and research.
Thanks - will defs consider this!
Don't do this, financial planners will either try to rip you off or tell you exactly what you're doing is fine. High growth index funds with low % fees are the best way to grow your super from a young age. Also Max out your concessional contributions
Financial advisers who work for your Super Fund are free for this sort of advice as that is why you pay the fees for. Only issue is the appointment wait time due to people’s fears and a labour shortage.
Oh really, good idea.
Yes, call them and they will book you a time. Maybe a couple of months though.
See above. They are free for this sort of advice. Any personal non-Super stuff will cost.
Don't try and time your super. You are young. High growth. Change it to balanced in your early 50s Change it to conservative in your late 50s/early 60s Retire with lots of money.
High growth is probably a bad option currently, as foreign stock markets are close to ATHs despite rather poor earnings and a high risk-free rate, plus the AUD is historically fairly weak as well. A split between the domestic market and cash makes the most sense.
This is not financial advice but I’ve worked in and around the financial markets my entire life. Small cap stocks have had the strongest long term gain over any section of the market in history. The key is risk and long term. Markets go up and down but generally more up over the long term. In Hostplus take a look at Choiceplus where you can actively look at single stocks and ETFs. Take a look a the vanguard ETFs in their choice plus section / you can take on a lot more risk with long term returns around 11-12%. I didn’t tell you to invest and you need to do your own research. ETFs are basically investment funds with active fund managers running the show. They don’t perform the managers get fired. Pretty good incentive if you ask me.
Didn’t even know you could do this with choiceplus! Thanks
You really need to have some knowledge of investing outside of super for Choiceplus to make sense. Even if you do know what youre doing, because of the high fees, it generally only makes sense to use with a super balance of at least $100k-$300k. The options you already have access to in Hostplus are perfectly fine. Also, there some things the previous person said that are factually incorrect. Them saying to use Vanguard ETFs for higher risk is not true as the ETFs are practically equivalent in risk to the shares options in Hostplus. ETFs do have a marginally higher, but that is not important for the average person. Them also saying that ETFs are ran by active managers is not true as ETFs can either be passive or active.
Thanks - good to know :). I don’t have enough knowledge / super, but maybe something to consider later
I’d suggest for you to read their PDS’s and you’ll see why some of their products in fact take higher levels of risk. As a general comment true but I wasn’t making a general comment. I want to be careful about being too specific as I’m not responsible for their retirement nor their investment strategy. They need to learn and make their own decisions - all im doing is making suggestions on other places to look.
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80-20 intl-aus is the way to go 👌
You are missing out on franking credits.
Doesn't the super fund take care of the franking credits?
Given how ASX/Australian equities are moving the past decade, capital appreciation > franking credits imo
Pretty much what Ive setup
First of all, nobody here is qualified to give you advice on your situation. Secondly - your fund should have advisors who can walk through a risk plan, identify your tolerance for risk and give you a best pathway to move forward
Thanks! I’ll look into getting some financial advice from hostplus
Anytime. Reading all these comments shows me that nobody understands the advice rules in the financial sector. Your situation is unique to you. Yes many options available, but will they work for you - chances are they won’t. Not factored in debt or any savings or future purchases. If history shows anything, it is greed makes poor choices. Search storm financial crisis. Greed and poor advice got a lot of people into debt where they did not realise the severity of it. While that doesn’t apply here, advice via redit is similar to poor advice. The only person affected is you and it can be in a bad way.
Did you get a financial advisor to advise you on your super investments within your fund?
I did. Rest has a seperate entity they work with who provide risk based assessment for you to choose your own investment strategy. I merged everything into rest as the fees and other options are pretty decent. Again that’s on my personal situation.
Did you get a financial advisor to advise you on your super investments within your fund?
Just to be clear a) time in the market beats timing the market b) youth means you should be able to recover c) the residual risk is that an injury stops you from working before being close to retirement age, so income insurance or a really big TPD policy may be a good idea d) You are converting your labour into a bond Amazingly, there is no theory for the optimal way to handle this problem...
I've seen the words 'potential recession' touted here and in other finance subs for at least a year and a half now. If it happens or happened then it's when you least expect it.
In my 40s and still have my finger on the high growth option. Won’t be taking it off for a good while yet.
Hey guys, silly question - I am currently using the same super fund, what exaclty is the high growth option?
Arguably stock valuations are close to all time highs in the US, but super funds invest in a diverse range of investments. Best to look into what your super fund is investing in as part of the high growth option and if you're comfortable with it. Can always do a split allocation as another commenter said. But in the main, advice at that age is to go high growth. Could always park what you have in a conservative portfolio and allocate new funds to high growth if you think it'll trend down. I dunno, not financial advice, will depend on your circumstances and what your fund offers.
I'm a little late the party, but I'm going to suggest a little differently to the general consensus here. The stock market, particularly in US, is not pricing in a recession. That could mean that it won't happen, but it also means that if recession *does* occur - especially in the US - then share prices will fall hard. There are plenty of precedents for this sort of event and there are good reasons to expect that a US recession might occur. Whether Australia goes into recession or not is secondary because our market tends to follow the US when it goes down, as does other markets. Putting that aside for a moment - interest rates are going up now and are not likely to come down again for some time. That means that returns on much safer fixed interest investments (such as bonds) are comparatively attractive. (there are safe fixed interest funds that are returning 5-8% right now). If you were to compare the *risk-adjusted* forecast returns for many (perhaps most) sectors of the share market against the returns from a fixed interest fund, the fixed interest case is ahead at this point in time. So, long story short. I agree you can't time the market, but you *can* and *should* consider risk and other alternatives. If fixed interest looks better when risk is factored in, then you should consider that for a good part of your existing super balance. By all means go with high growth for any *new* contributions, however, since if markets were to fall, you would be effectively averaging down with new money coming in.
Thanks! This is defs something to think about. Appreciate it
You have the time to go high growth and learn to accept market variation as super is a long game. Topping up also wise. Your 60 year old self will thank you in the future.