Managed funds are investments that are on our What we WILL NOT invest in list. There are two key reasons for this, and the first is their fees. High fees can substantially eat into your long-term investment returns. Many managed funds can have total annual fees of 2-3% or more of your investment returns. Compare this to investments that we do like, such as index funds (which are like “passiv... »
Intrinsic value is what a stock is really worth, rather than what price it is quoted as on the stockmarket. Buying a stock when it is below its intrinsic value, and that is likely to have a higher forecast intrinsic value is an approach used by value investors, the most famous of who are Warren Buffet and Benjamin Graham. There are a number of different ways to calculate it, and it is important to... »
Although our preference is to use self-managed super funds (SMSFs) as early as possible, there is a cheaper alternative to SMSFs that provides some of the benefits of SMSFs (but not all) and at a much lower cost, and it is worth mentioning as it may be appropriate in some circumstances. To start off with, and to make the comparison more worthwhile, let’s look at the annual costs of running a... »
Margin loan interest rates are generally much higher than for residential and commercial property loans, as such it pays to shop around before picking a margin loan provider. When choosing a margin loan provider you should of course consider things other than just interest rates; such as, what kind of loan-to-valuation (LVR) ratio you can borrow to on different shares, what the minimum loan balanc... »
In our article, Transferring $2M Into Your SMSF, we explained why we are not big fans of borrowing to buy residential property inside a self-managed super fund (SMSF). In this blog post, we explain one exception to this general point of view, that is partly a lifestyle decision and partly a strategic financial decision. Although a SMSF cannot purchase a residential property from a member, there is... »
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