August 8, 2025 • 16 mins
Ready to finally take control of your take control of your retirement savings and stop leaving your future in someone else’s hands? Book your free call with our team today to find out more: https://www.bcsmsf.com.au/contact-us/
In this episode of SMSF Insider, host Troy delves into the important topic of managing your investment portfolio during economic downturns. He emphasizes the risks of selling assets in a crash and highlights the advantages of using a self-managed super fund (SMSF) for property investment and leveraging opportunities. Troy discusses the implications of market collapses, including the potential decrease in asset values such as shares and property. Listeners will learn about the significance of diversification, as well as the dangers of over- and under-diversification. The episode also covers strategies to protect your portfolio through defensive assets and the importance of seeking professional advice for proper asset allocation.
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Please note: The information provided in this recording is for coaching and educational purposes only. It should not be considered personal financial advice. Everyone’s situation is different, so before acting on any of the content discussed, please seek independent financial advice tailored to your specific circumstances
Timestamps:
00:00:00 - 00:00:00: Introduction
00:01:04 - Understanding Economic Downturns and Asset Protection
00:02:30 - The Importance of Diversification in Your Portfolio
00:04:25 - The Role of Property in SMSF Wealth Creation
00:05:54 - Division 296: Tax Implications for SMSFs
00:08:05 - Historical Context and Future Implications of Superannuation Tax
00:09:40 - Defensive Assets and Their Importance During a Crash
00:10:43 - Comparing SMSF and Industry Funds in Economic Downturns
00:11:59 - What Not to Do During a Market Crash
00:12:54 - Currency Risk in Overseas Investments
00:13:36 - Navigating the Current Housing Market Crisis
00:15:22 - Leveraging Property Investments in SMSF
00:16:05 - The Importance of Time in the Market
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Don't sell your assets in the event of a crash and revert to
cash. This is possibly the worst strategy you can do.
Property in your SMSF is a great strategy that a lot of our clients
use to create wealth and also the ability to have leverage inside
your fund as well. What I mean by that is, if you want to purchase property, you
don't need to pay cash. You can actually borrow using your SMSF.
(00:20):
Industry fund versus SMSF in an
economic downturn. Which one is going to fare better? Well,
the answer is welcome to SMSF Insider, where
we help busy professionals to gain financial independence using
an SMSF. Hi, I'm Troy, founder of Blue Chip SMSF Services.
Now, over the last 20 years, I've helped thousands of Aussies manage the
(00:42):
complexities of self-managed super funds. And in this podcast, I'll
answer your questions, break down the myths, so you can take charge of your
financial freedom. Let's get into it. Hi, guys, and welcome back to
episode two, where we will be touching on your
investment portfolio and how that may be affected in
the event of a downturn, talking a little bit about diversification, over-diversification,
(01:04):
and under-diversification, and how having
advice can help making sure you've
got the right asset allocation. So let's jump right
in. Will your SMSF survive the next downturn? What
does a collapse actually look like? Well, in a recession, asset
prices typically reduce in value, so
(01:27):
Australian shares, international shares, property
in some sectors will also reduce in value. So,
what can you do to protect your portfolio in the event of
this happening? The answer is mostly defensive assets
and cash obviously being king. If you're in cash, that
gives you the ability to then purchase some of these assets at
(01:50):
reduced pricing. So, when the international pricing crashes
or shares crash or Australian share prices crash, having
cash gives you the ability to then purchase these assets at
a discount. It's like buying a pair of shoes or a pair of jeans on sale. It's
no different when you're talking about asset prices. So it's the perfect
time to be buying assets is when it crashes. Don't
(02:12):
be scared about jumping in. Although
it will feel like the world is ending because the media will make
it feel like it is. But that is the best time to be purchasing
assets is during a crash. So don't have all your
eggs in one basket if you can avoid it. Have some diversification and
make sure you're keeping cash. An example of having all your eggs in
(02:33):
one basket might be having your fund invested in
one particular stock or in
one particular asset or all in international assets
or equities, all in Australian equities. Diversification is
a simple term for having a spread. So having
a little bit of everything is always a good idea when you're investing.
(02:56):
That could mean anything from Australian shares, international shares,
property, fixed interest, and of course cash. When we
talk about property, obviously there's different
subsectors of the property market. There's residential, there's commercial, industrial.
If you are heading into space, you need to decide which part
of this subsector is right for you, whether it's resi, commercial, or
(03:19):
industrial. Stay aware of
what's happening in the market in general. That's
always a good idea when you are invested because
it gives you the chance to not predict, but it
keeps you involved and keeps you more engaged
with your investments and your
(03:40):
SMSF specifically. At the time of
a crash, it's going to feel like the world is ending and
that it's going to last forever, basically. The media
is going to make things sound a lot worse than they are. But when you go back and
have a look at crashes over the last 50 years, those
crashes typically only last around 18 months. sometimes
(04:03):
more, sometimes less, but it's going to feel like forever. And
the key to the crash is going to be stay your
course, don't jump into cash because you'll miss the bounce and
stay invested. And that comes around, that all comes down
to your psychology when you're investing and
making sure you're prepared in the event of a downturn. Property
(04:25):
in your SMSF, so having property in
your SMSF is a great strategy that a
lot of our clients use to
create wealth and that can be anything from residential property, commercial
or industrial property. The reason it does so well, this
particular strategy, is Most of those strategies have
(04:47):
gearing or have a loan involved which
gives the fund more leverage. So you've got
more money working for you as opposed to the
$300,000 for example that you initially put in. So instead of
getting returns of 7 or 8 or 9% on $300,000 or $400,000, you're now getting those
returns on $800,000, $900,000 or $1 million. So
(05:12):
that compounded over the long term will can
make a huge difference to your tier end game property over
3 million is About to be taxed
whether you've sold those assets or not and that's called division 296 pretty
hot topic at the moment and what that is is the
ATO collecting money off SMSFs or super
(05:35):
funds in general that have more than three million in their super fund. Now,
it doesn't matter whether you've sold those assets or not, the government or
the ATO is going to take that money from you. We're going to put the
handout for that money regardless of where that
money is invested, whether you've got that money or not, you will
owe that money and you will need to pay it. Although it's three million and it
(05:56):
might seem like it's not, that's not going to affect you at the moment, and
maybe it doesn't, but as time goes on, that 3 million
isn't indexed. So what that means is that as time goes
on, and you will eventually have 3 million, hopefully,
but certainly the younger generation, as time goes on, that
will come through and everyone will be paying Division 296. So
(06:19):
although it's not affecting a huge percentage of the population at
the moment, as time goes on, it will affect a
huge majority moving forward. An example of this, of how
Division 296 is going to affect assets over
$3 million is a prime example of this might be a farmer that has
his farm, put his farm in his SMSF that is now
(06:39):
worth a lot more than 3 million. Where does
that money come from? A lot of these farmers depend on rainfall
and some of the circumstances are outside of
their control. Weather is certainly being
the main one. So, where does this money come from if the
farmer doesn't sell his cattle or doesn't sell his stock?
(07:03):
Where does this money come from? Well, no one really knows at this point
and it doesn't seem like anyone really cares as
long as the money is paid. Not a great way to look after
some of our old retirees that have worked their
whole life and paid their whole taxes. It doesn't seem fair, but it's
a huge disincentive for people to continue to grow their
(07:25):
wealth inside a super. Just quickly, guys, if you're a busy professional
fed up with traditional super funds and overwhelmed by the setup of your
SMSF, we can help. Book in a call with my team using the link
in the show notes and let's build your future on your terms. Now,
back to the episode. Although the tax, the Division 296 is
set or about to be, the bill is for, the
(07:47):
benchmark is $3 million, the Greens do want this lowered
to $2 million, which will affect obviously a lot more people. So
the legislation has yet to be passed, but it's going
to be, my understanding is there is going to be a
challenge, a constitutional challenge. So everyone
is looking in this space to see what happens next. Back
(08:09):
in 2007, the government had an incentive to
contribute, sell your home and invest that money into your super fund. Those
that did that sold their home, their family home, invested that
into super and then maxed out their
contributions every year. Those people that were doing as
they were supposed to do or as they were allowed to do are now sitting on
(08:32):
portfolios of around $3 million and
all these guys are going to be taxed on assets that they haven't even
sold yet. In 2007, the Howard government made and
gave everyone an incentive to contribute more money to super, contribute
up to $1 million into super. If you had invested that million into super
and then maxed out your concessional and non-concessional contributions, you
(08:54):
could easily have $3 million in super at the moment. Now, they've turned around
the current government and are going to tax all of these older
clients that have worked their whole life, made contributions, sacrificed
their family home and sold it to contribute to super, and now they're being taxed
on assets they haven't even sold yet. I think this is a very unfair tax,
as do most people. The issue is that what is
(09:16):
next? What assets are they going to come for next? Family
trust? Is it unit trust? Is it all assets outside of
super? Is it the family home? Who knows. Time will tell. But
at this point in time, I don't know anyone that's thinking this tax is a
great idea. A well-structured SMSF can thrive during
a collapse if it has enough cash and
(09:38):
defensive assets. So things like, when I say defensive
assets, things like gold, fixed interest, property, these
are more defensive assets that can be sold during a
downturn to dollar cost average and buy more
of their growth assets like shares, Australian shares and
international shares. Probably not so much property but certainly cash. These
(10:01):
are going to be your saviour in the event of a crash. These
are the things that are going to help you get through a crash and these are the things that, this
is the asset that's going to help you buy more of your growth
assets while they're on sale. Nobody rings a bell and says there's
about to be a crash. Well, no one rings a bell and says, we're
at the bottom. Now's the time to buy. But having cash in
(10:22):
your SMSF or in your overall investment strategy
is going to help you when the crash eventually happens.
As I said, no one really knows when that's going to be. No
one rings a bell. So stay prepared, have cash available,
and be ready to pounce. Industry fund versus SMSF
(10:42):
in an economic downturn. which one is going to
fare better? Well, the answer is it depends where
your money is invested. If you're invested in
cash, which no
one really is, then you're going to do well. But
if most, like most industry funds, you're in a conservative,
(11:04):
balanced growth or high growth fund, it's very rarely
you see a mixture of these portfolios. So,
those portfolios are going to be affected, especially the
high growth funds are going to be affected more
than the conservative portfolios. With
an SMSF, it's the same thing. It depends where you're invested. Most
(11:27):
SMSFs will have liquidity or should be holding liquidity, should
be holding cash. So, your ability to purchase
more in dollar cost average potentially is higher
because you are holding a little bit more in cash, typically with an
SMSF or should be. So, in the event of a downturn, an
SMSF should realistically do better than
(11:49):
an industry fund. So what not to do in a crash? Don't
sell your assets in the event of a crash and revert to cash.
This is possibly the worst strategy you can do. When
the market has crashed, it's too late to be reverting to cash. You need to
stake your course and you need to stay committed to your overall
investment strategy. If you do revert to cash in an economic crisis,
(12:11):
what will happen is you're sitting on cash, being fearful that
you're going to lose everything. We've seen it time and time again. What happens
is the market recovers, The client is still in cash,
all of those gains have been, the market is back to where it was before it crashed
and you're still sitting in cash. So you've actually missed the bounce. Now,
you're going to have to wait longer for your
(12:33):
portfolio to recover. So being in cash is
okay if you're in cash before it crashed, but
if you revert to cash during the crash, you're in
for a very long recovery. So when you are investing in overseas markets,
you do have what's called currency risk. We have seen the Australian dollar fall
against some of the major currencies. Probably not a great time
(12:55):
to be hedging. Probably should have been hedged before this, but no one saw it
coming. No one saw the tariffs coming. So it's very hard
to predict some of these things. But when you are invested in overseas markets,
you do have currency risk. After the currency has fallen against
the country you invested in, Probably,
as I mentioned, it's probably too late to be starting to hedge. Probably want
(13:17):
to stay unhedged. But it is something to be mindful of.
You are investing in overseas markets. You do have currency risk. And
it's definitely something to be mindful of. So when we talk about diversification,
we talk about not having all your eggs in one basket. So having a
range of different asset classes in your portfolio. It's
important to get advice around this, but it's also important not
(13:39):
to be over-diversified. Don't be under-diversified, don't
be over-diversified. It is important to get advice when you're
talking about diversification and not having all your
eggs in one basket. So at the moment, there is a massive
property or housing crisis. So there is looking
like a continual upward pressure in housing prices. It's
(14:01):
been ongoing for as long as I can remember. Housing affordability
has been a hot topic since I started investing
20 years ago. So, nothing's changed since then.
Vacancy rates are super low, rents are high, there is a housing
shortfall. So, long term, it does look like property
does have a pretty good future for at least
(14:24):
the medium term, as far as we can see. But
interest rates are finished
their upward cycle and are cycling down now,
even though The RBA are watching inflation
very closely. But with rates coming down, it
(14:44):
is going to spur the market on and get people excited
about jumping back into the property market. We've seen clearance rates already start
to jump in every major capital city with
growth in every major capital city last quarter.
So I think that space is, it
(15:05):
does look quite positive. And so having some
exposure in there is not
a bad idea with rates coming down and property prices continuing to
rise, vacancy rates low, and also the ability
to have leverage inside your fund as well just gives
you that ability to purchase some of these
(15:25):
assets. So what I mean by that is you don't need to pay
cash for if you want to purchase property, you don't need to pay cash.
You can actually borrow using your SMSF, using
what's called a limited recourse borrowing arrangement, which is
a fancy name for a loan. Obviously, seek advice before making any investment
decisions. When is the right time to invest? Yesterday
(15:48):
is typically the right time to invest. It's time in the
market, not timing the market, waiting for a downturn. So
the longer you're invested, the better off you're going to be. And
that applies to shares, it applies to property, it applies
to almost every single asset class. So it's important that
you get invested as soon as you possibly can and not
(16:08):
sit around waiting for a crash. When the crash happens, maybe
have some cash to deploy to purchase more of that asset, but
certainly don't wait around for a crash. It's time in
the market, not timing the market. So that's a really important
one. So that's a wrap guys. Thanks for listening. If you've got any comments
or there's something you'd like us to talk about, feel free to drop
(16:30):
a comment or in the comment section below
and look forward to catching up on the next episode of
SMSF Insider. Thanks for tuning in to this episode of SMSF
Insider. If you got value from this, make sure you subscribe so
you never miss the strategies we share to help you take control of your financial
future. Find us on socials at bluechipSMSF or
Don't sell your assets in the event of a crash and revert to
cash. This is possibly the worst strategy you can do.
Property in your SMSF is a great strategy that a lot of our clients
use to create wealth and also the ability to have leverage inside
your fund as well. What I mean by that is, if you want to purchase property, you
don't need to pay cash. You can actually borrow using your SMSF.
(00:20):
Industry fund versus SMSF in an
economic downturn. Which one is going to fare better? Well,
the answer is welcome to SMSF Insider, where
we help busy professionals to gain financial independence using
an SMSF. Hi, I'm Troy, founder of Blue Chip SMSF Services.
Now, over the last 20 years, I've helped thousands of Aussies manage the
(00:42):
complexities of self-managed super funds. And in this podcast, I'll
answer your questions, break down the myths, so you can take charge of your
financial freedom. Let's get into it. Hi, guys, and welcome back to
episode two, where we will be touching on your
investment portfolio and how that may be affected in
the event of a downturn, talking a little bit about diversification, over-diversification,
(01:04):
and under-diversification, and how having
advice can help making sure you've
got the right asset allocation. So let's jump right
in. Will your SMSF survive the next downturn? What
does a collapse actually look like? Well, in a recession, asset
prices typically reduce in value, so
(01:27):
Australian shares, international shares, property
in some sectors will also reduce in value. So,
what can you do to protect your portfolio in the event of
this happening? The answer is mostly defensive assets
and cash obviously being king. If you're in cash, that
gives you the ability to then purchase some of these assets at
(01:50):
reduced pricing. So, when the international pricing crashes
or shares crash or Australian share prices crash, having
cash gives you the ability to then purchase these assets at
a discount. It's like buying a pair of shoes or a pair of jeans on sale. It's
no different when you're talking about asset prices. So it's the perfect
time to be buying assets is when it crashes. Don't
(02:12):
be scared about jumping in. Although
it will feel like the world is ending because the media will make
it feel like it is. But that is the best time to be purchasing
assets is during a crash. So don't have all your
eggs in one basket if you can avoid it. Have some diversification and
make sure you're keeping cash. An example of having all your eggs in
(02:33):
one basket might be having your fund invested in
one particular stock or in
one particular asset or all in international assets
or equities, all in Australian equities. Diversification is
a simple term for having a spread. So having
a little bit of everything is always a good idea when you're investing.
(02:56):
That could mean anything from Australian shares, international shares,
property, fixed interest, and of course cash. When we
talk about property, obviously there's different
subsectors of the property market. There's residential, there's commercial, industrial.
If you are heading into space, you need to decide which part
of this subsector is right for you, whether it's resi, commercial, or
(03:19):
industrial. Stay aware of
what's happening in the market in general. That's
always a good idea when you are invested because
it gives you the chance to not predict, but it
keeps you involved and keeps you more engaged
with your investments and your
(03:40):
SMSF specifically. At the time of
a crash, it's going to feel like the world is ending and
that it's going to last forever, basically. The media
is going to make things sound a lot worse than they are. But when you go back and
have a look at crashes over the last 50 years, those
crashes typically only last around 18 months. sometimes
(04:03):
more, sometimes less, but it's going to feel like forever. And
the key to the crash is going to be stay your
course, don't jump into cash because you'll miss the bounce and
stay invested. And that comes around, that all comes down
to your psychology when you're investing and
making sure you're prepared in the event of a downturn. Property
(04:25):
in your SMSF, so having property in
your SMSF is a great strategy that a
lot of our clients use to
create wealth and that can be anything from residential property, commercial
or industrial property. The reason it does so well, this
particular strategy, is Most of those strategies have
(04:47):
gearing or have a loan involved which
gives the fund more leverage. So you've got
more money working for you as opposed to the
$300,000 for example that you initially put in. So instead of
getting returns of 7 or 8 or 9% on $300,000 or $400,000, you're now getting those
returns on $800,000, $900,000 or $1 million. So
(05:12):
that compounded over the long term will can
make a huge difference to your tier end game property over
3 million is About to be taxed
whether you've sold those assets or not and that's called division 296 pretty
hot topic at the moment and what that is is the
ATO collecting money off SMSFs or super
(05:35):
funds in general that have more than three million in their super fund. Now,
it doesn't matter whether you've sold those assets or not, the government or
the ATO is going to take that money from you. We're going to put the
handout for that money regardless of where that
money is invested, whether you've got that money or not, you will
owe that money and you will need to pay it. Although it's three million and it
(05:56):
might seem like it's not, that's not going to affect you at the moment, and
maybe it doesn't, but as time goes on, that 3 million
isn't indexed. So what that means is that as time goes
on, and you will eventually have 3 million, hopefully,
but certainly the younger generation, as time goes on, that
will come through and everyone will be paying Division 296. So
(06:19):
although it's not affecting a huge percentage of the population at
the moment, as time goes on, it will affect a
huge majority moving forward. An example of this, of how
Division 296 is going to affect assets over
$3 million is a prime example of this might be a farmer that has
his farm, put his farm in his SMSF that is now
(06:39):
worth a lot more than 3 million. Where does
that money come from? A lot of these farmers depend on rainfall
and some of the circumstances are outside of
their control. Weather is certainly being
the main one. So, where does this money come from if the
farmer doesn't sell his cattle or doesn't sell his stock?
(07:03):
Where does this money come from? Well, no one really knows at this point
and it doesn't seem like anyone really cares as
long as the money is paid. Not a great way to look after
some of our old retirees that have worked their
whole life and paid their whole taxes. It doesn't seem fair, but it's
a huge disincentive for people to continue to grow their
(07:25):
wealth inside a super. Just quickly, guys, if you're a busy professional
fed up with traditional super funds and overwhelmed by the setup of your
SMSF, we can help. Book in a call with my team using the link
in the show notes and let's build your future on your terms. Now,
back to the episode. Although the tax, the Division 296 is
set or about to be, the bill is for, the
(07:47):
benchmark is $3 million, the Greens do want this lowered
to $2 million, which will affect obviously a lot more people. So
the legislation has yet to be passed, but it's going
to be, my understanding is there is going to be a
challenge, a constitutional challenge. So everyone
is looking in this space to see what happens next. Back
(08:09):
in 2007, the government had an incentive to
contribute, sell your home and invest that money into your super fund. Those
that did that sold their home, their family home, invested that
into super and then maxed out their
contributions every year. Those people that were doing as
they were supposed to do or as they were allowed to do are now sitting on
(08:32):
portfolios of around $3 million and
all these guys are going to be taxed on assets that they haven't even
sold yet. In 2007, the Howard government made and
gave everyone an incentive to contribute more money to super, contribute
up to $1 million into super. If you had invested that million into super
and then maxed out your concessional and non-concessional contributions, you
(08:54):
could easily have $3 million in super at the moment. Now, they've turned around
the current government and are going to tax all of these older
clients that have worked their whole life, made contributions, sacrificed
their family home and sold it to contribute to super, and now they're being taxed
on assets they haven't even sold yet. I think this is a very unfair tax,
as do most people. The issue is that what is
(09:16):
next? What assets are they going to come for next? Family
trust? Is it unit trust? Is it all assets outside of
super? Is it the family home? Who knows. Time will tell. But
at this point in time, I don't know anyone that's thinking this tax is a
great idea. A well-structured SMSF can thrive during
a collapse if it has enough cash and
(09:38):
defensive assets. So things like, when I say defensive
assets, things like gold, fixed interest, property, these
are more defensive assets that can be sold during a
downturn to dollar cost average and buy more
of their growth assets like shares, Australian shares and
international shares. Probably not so much property but certainly cash. These
(10:01):
are going to be your saviour in the event of a crash. These
are the things that are going to help you get through a crash and these are the things that, this
is the asset that's going to help you buy more of your growth
assets while they're on sale. Nobody rings a bell and says there's
about to be a crash. Well, no one rings a bell and says, we're
at the bottom. Now's the time to buy. But having cash in
(10:22):
your SMSF or in your overall investment strategy
is going to help you when the crash eventually happens.
As I said, no one really knows when that's going to be. No
one rings a bell. So stay prepared, have cash available,
and be ready to pounce. Industry fund versus SMSF
(10:42):
in an economic downturn. which one is going to
fare better? Well, the answer is it depends where
your money is invested. If you're invested in
cash, which no
one really is, then you're going to do well. But
if most, like most industry funds, you're in a conservative,
(11:04):
balanced growth or high growth fund, it's very rarely
you see a mixture of these portfolios. So,
those portfolios are going to be affected, especially the
high growth funds are going to be affected more
than the conservative portfolios. With
an SMSF, it's the same thing. It depends where you're invested. Most
(11:27):
SMSFs will have liquidity or should be holding liquidity, should
be holding cash. So, your ability to purchase
more in dollar cost average potentially is higher
because you are holding a little bit more in cash, typically with an
SMSF or should be. So, in the event of a downturn, an
SMSF should realistically do better than
(11:49):
an industry fund. So what not to do in a crash? Don't
sell your assets in the event of a crash and revert to cash.
This is possibly the worst strategy you can do. When
the market has crashed, it's too late to be reverting to cash. You need to
stake your course and you need to stay committed to your overall
investment strategy. If you do revert to cash in an economic crisis,
(12:11):
what will happen is you're sitting on cash, being fearful that
you're going to lose everything. We've seen it time and time again. What happens
is the market recovers, The client is still in cash,
all of those gains have been, the market is back to where it was before it crashed
and you're still sitting in cash. So you've actually missed the bounce. Now,
you're going to have to wait longer for your
(12:33):
portfolio to recover. So being in cash is
okay if you're in cash before it crashed, but
if you revert to cash during the crash, you're in
for a very long recovery. So when you are investing in overseas markets,
you do have what's called currency risk. We have seen the Australian dollar fall
against some of the major currencies. Probably not a great time
(12:55):
to be hedging. Probably should have been hedged before this, but no one saw it
coming. No one saw the tariffs coming. So it's very hard
to predict some of these things. But when you are invested in overseas markets,
you do have currency risk. After the currency has fallen against
the country you invested in, Probably,
as I mentioned, it's probably too late to be starting to hedge. Probably want
(13:17):
to stay unhedged. But it is something to be mindful of.
You are investing in overseas markets. You do have currency risk. And
it's definitely something to be mindful of. So when we talk about diversification,
we talk about not having all your eggs in one basket. So having a
range of different asset classes in your portfolio. It's
important to get advice around this, but it's also important not
(13:39):
to be over-diversified. Don't be under-diversified, don't
be over-diversified. It is important to get advice when you're
talking about diversification and not having all your
eggs in one basket. So at the moment, there is a massive
property or housing crisis. So there is looking
like a continual upward pressure in housing prices. It's
(14:01):
been ongoing for as long as I can remember. Housing affordability
has been a hot topic since I started investing
20 years ago. So, nothing's changed since then.
Vacancy rates are super low, rents are high, there is a housing
shortfall. So, long term, it does look like property
does have a pretty good future for at least
(14:24):
the medium term, as far as we can see. But
interest rates are finished
their upward cycle and are cycling down now,
even though The RBA are watching inflation
very closely. But with rates coming down, it
(14:44):
is going to spur the market on and get people excited
about jumping back into the property market. We've seen clearance rates already start
to jump in every major capital city with
growth in every major capital city last quarter.
So I think that space is, it
(15:05):
does look quite positive. And so having some
exposure in there is not
a bad idea with rates coming down and property prices continuing to
rise, vacancy rates low, and also the ability
to have leverage inside your fund as well just gives
you that ability to purchase some of these
(15:25):
assets. So what I mean by that is you don't need to pay
cash for if you want to purchase property, you don't need to pay cash.
You can actually borrow using your SMSF, using
what's called a limited recourse borrowing arrangement, which is
a fancy name for a loan. Obviously, seek advice before making any investment
decisions. When is the right time to invest? Yesterday
(15:48):
is typically the right time to invest. It's time in the
market, not timing the market, waiting for a downturn. So
the longer you're invested, the better off you're going to be. And
that applies to shares, it applies to property, it applies
to almost every single asset class. So it's important that
you get invested as soon as you possibly can and not
(16:08):
sit around waiting for a crash. When the crash happens, maybe
have some cash to deploy to purchase more of that asset, but
certainly don't wait around for a crash. It's time in
the market, not timing the market. So that's a really important
one. So that's a wrap guys. Thanks for listening. If you've got any comments
or there's something you'd like us to talk about, feel free to drop
(16:30):
a comment or in the comment section below
and look forward to catching up on the next episode of
SMSF Insider. Thanks for tuning in to this episode of SMSF
Insider. If you got value from this, make sure you subscribe so
you never miss the strategies we share to help you take control of your financial
future. Find us on socials at bluechipSMSF or
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