Along with this raft of legislative change, the Australian Securities and Investments Commission (ASIC) has also introduced new licensing requirements for accountants who work with and advise Self Managed Superannuation Fund (SMSF) Trustees. Only approx. 10% of accountants have complied with these changes to date.
As such if you, as many, consider your accountant would be your 1st port of call for Financial Advice, they will likely advise you, they are unable to provide the information you require & should consult a qualified Financial Adviser / Planner.
This is general advice only and you should seek expert financial advice from a qualified financial adviser before acting on any of the information covered in these topics.
Dollar Cost Averaging worked well for Investors in 2020.
Most Australians benefit from Dollar Cost Averaging via regular concessional (super guarantee) contributions to their super fund on a monthly or quarterly basis from their employer. Subject to the members selected investment option, these funds are typically invested across a mix of bonds, property and shares at the prevailing market prices at the time the contribution is made.
This form of forced savings creates a disciplined approach to investing that usually results in a lower average cost of investment, as investor emotion and the desire to ‘time markets’ is taken out of the process. Over time, regular contributions, reinvestment of distributions and compounding returns provide a powerful basis for long term wealth creation.
The table below is an example of dollar cost averaging, based on a starting amount of $5,000 and a set weekly contribution over a 10-year period, with an average annual return of 6 per cent including distributions.
“Confidence is preparation. Everything else is beyond your control.” – Richard Kline.
