Prior to Investing your Super Benefit, it is a requirement under current Super Law that an SMSF formulate and give effect to an Investment Strategy. An Investment Strategy is simply a plan for making, holding and realising SMSF Investments that reflects the SMSF's Objectives (eg increasing the value of Member Benefits). In establishing an Investment Strategy the following steps should be taken into account.
Step 1: Develop Investment Objectives.
Step 2: Develop a Strategy to achieve the Investment Objectives.
Step 3: Monitor the Objective and Strategy with a periodic Investment Review.
Most clients establishing an SMSF assume that an Investment Strategy is a Financial Plan for their SMSF and proceed to draft a document that details the specific Investments they want to make for the SMSF. For example clients when drafting their Investment Strategy will provide specific details of the assets they wish to acquire (eg shares or cash) and the respective percentage allocation to each asset class. This is NOT an Investment Strategy required under current Super Laws, but a Financial Plan. This level of detail is NOT required when formulating your SMSF Investment Strategy. For more information on the Investment Strategy, please click here.